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Getting your first client is always exciting, but getting a client that is not in the same country as you is not just exciting, but it can also be a bit scary.
Here are some Top Tips to help you get started, and get paid when you are working with a client in a different country to you.
What currency should you charge in? If you are going to charge in your home currency (Pounds Sterling if you are based in the UK) you will know how much you will be paid. But your client will run the risk of currency fluctuations.
If you want to charge in another currency – for example US Dollars, you will need a way to be paid in that currency and you will run the risk of exchange rate fluctuations. You will need to measure the benefits of who takes the risk against the bank charges and fluctuations. When you first get going sticking to your home currency makes things easier if your client is happy to pay you that way.
It can be tempting to set yourself up to be paid by PayPal, which has the advantage of handling the exchange rates from one currency to another. PayPal have a habit of refunding customers without giving you the opportunity to explain. This can mean you do all the work, and then don’t get the money! The charges can also mount up if this is a regular gig.
3. Bank codes
Paying money into direct into your bank will mean you need to get your Swift Code or equivalent code from your bank. Your normal sort code will not work for overseas transactions. You can find or check your bank code here.
4. Multi-currency options
If your client is not paying you in the same currency as your bank account is in, you may have to open a separate bank account in that currency (or in multiple ones depending on what option your bank offers).
Your bank does not always offer the best rate of exchange and you may be better off setting yourself up with a global method of receiving and sending money. A free account with Revolut can be ag reat way to get started. Other people prefer Transferwise. A lot depends on where you are going to trade, in what currency.
5. Getting paid
It can be tough enough getting paid if you and your client are in the same country, but if you are not, then getting your hands on your money can be even trickier.
You have to decide whether you are going to work on a ‘cash up front’ basis, or if you are going to offer credit, how long for and what you will do if you are not paid on time (or at all).
Many first time global traders go for a cash up front option as a way of putting a ‘toe in the water’.
Jurisdiction is about which country’s law (juris) gets to say what’s what (diction). For anyone based in the UK the preferred jurisdiction will usually be the UK. But if things go wrong not all UK judgements can be enforced overseas.
As long as the UK is in the EU this is not an issue for EU based transactions but you will need to review this post Brexit.
There is limited mutual enforcement of judgements between the USA and the UK, whereas between the UK and Australia things are much more straight forward.
No-one takes on a client thinking we will have to sue them or that they will sue you), but you do need to factor in how that works when you are thinking about how to get paid and what could go wrong.
7. Professional Indemnity Insurance
Your Professional Indemnity Insurance will normally assume that all your work is done in the country you are based in.
You will need to notify your insurers if you are trading with overseas customers and this may result in an increase in your premiums.
Your insurers may be keener to insure you if you continue with a UK jurisdiction.
Moving to a USA one may increase your premiums as they are famous for being more prone to sue people, having larger awards, and of course, the cost of defending such a claim is likely to be higher than a local one.
You may have to provide forms to your client to show that you are paying tax in the UK. Particularly if your client is in the USA you will need to do so.
Have a chat to your accountant and make sure, whatever country you are invoicing, you have completed the right paperwork since you will not always be able to reclaim any overpaid tax or offset it against UK tax.
9. Communication and delays
Remember that your client will not be in the same time zone as you. This means that they will not reply to your queries when you are at work. Nor will you always be available to speak to them when they are at work.
Depending on how far apart you are they may also have different rest days. For example a client in Dubai will not usually work on Friday but will expect you to be available on Sunday.
A client in the USA or Australia will not only be in a different time zone but have different public holidays. You will both need to plan ahead to make sure you factor in these issues.
The EU’s data privacy rules appy to anyone accessing or using data on any EU Citizen. The UK plans to follow the same rules (and reach) post Brexit for UK Citizens. You will need to contract properly for data privacy and have proper data processing instructions.
This can be tricky if your client is outside the EU/UK but handles data on people within it. You will want to set up a system for the secure and appropriate handling of personal data wherever your client is.
It takes time and practise to learn how to run a global business but it can be worth the effort. Don’t forget to tell us your top tips from what you have learned.
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