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Freelancing with Companies in Other Countries?

Posted by Cliff on from the working-overseas dept.

DutchSter asks: "I've been doing PHP web development for a few years now, including a few small jobs for a client in the UK (I'm currently in the US). The jobs have been so small I've never worried about a contract or anything. I was recently offered to do some long-term projects (about 6 months of full-time work). Does anyone have experience doing freelance work for another country, and if so, how did you handle contractual issues? Basically, I'm looking to minimize the risk of me being ripped off, and second, eliminate problems caused by miscommunication due to the lack of a written agreement."

2 of 24 comments (clear)

  1. Re:Retainer by HyperbolicParabaloid · · Score: 3, Interesting

    Alternatively, define milestones (writing the spec; delivering a prototype, delivering feature A, delivering feature B, etc.) with agreed-upon payments for each deliverable.

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    A person of moderate zeal
  2. Hedge your FX risk by b_pretender · · Score: 5, Interesting
    You may want to give some thought to hedging any foreign exchange rate risk.


    For example if the company wants to pay you 30k Euros up front and 30k Euros upon completion (in 6 Months), then you should minimize the risk that something will happen to the currency in 6 Months that will make your final payment worthless. Although Euros seem like a stable currency, it is new, and other currencies, such as Rubles or Yen are not as stable. It's cheap and easy to hedge your currency.

    All you have to do is go to the bank and lock in a 6M forward exchange rate. These are cheap instruments and they are easy to obtain. For the Euro example, today the Euro trades at 1.1 Euro to the dollar. It's reasonable that you could walk into a bank and purchase a forward exchange agreement for 1.07 Euro to the dollar in 6 Months. Now you have *locked* in US Dollar amount of your contract for the small price of less than 3%. It's a small price to pay for insurance that your contract isn't worthless in 6M.

    If you are uncomfortable setting up a forward contract through a bank, then you can synthetically create such an agreement via options on interest rates and the inflation index. This is a little too complicated for one Slashdot comment, but feel free to read Hull's Options and Derivatives book if you are interested in more info.