The 4 Best Countries to be a Contractor

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With a certain world sporting event currently in progress, and we’re a mere few weeks away from knowing who the best football team in the world is, at ClearSky HQ we wondered: where is the best place to contract around the world?

One of the best aspects of being an independent contractor is you can take your profession anywhere you want, you get a degree of flexibility you do not get in a permanent 9 to 5. So, to celebrate a month where the footballing prowess of countries from all continents will be under the spotlight, we have looked at the four best countries to work in as a contractor.

The Criteria for Defining the 'Best'

It can be tricky to define ‘best’, as this is completely subjective to the contractor. However, we believe that there is some universal criteria which the majority of contractors can agree on. We have used the World Economic Forum’s Global Competitive Report for 2017-18 in order to get data on the following criteria:

Total Tax Rate

This takes into account both income and corporation taxes, in order to find the lowest tax rates for contractors.

Number of procedures to start a business

How much bureaucracy is in place in order to start a business? This metric works out how easy it is for a contractor to start a business within the country.

Strength of auditing and reporting standards

One of the most important aspects of being a contractor is ensuring you get paid. By taking into account the auditing and reporting standards of that country, we can work out how likely you are as a contractor to get paid for your work. The tighter the rules, the better assurances contractors have that you will get paid.

Opportunities for talented people within that country

When you are a contractor you will need to have assurances that there are opportunities for work for skilled workers and professionals within that country.

Quality of life

Work-life balance is massively important in any job, not just contracting. Therefore, it’s important to measure quality of life within that country. To do this, we have combined the scores of infrastructure, health, and education in the Global Competitiveness Report.

Using these metrics, as well as the overall ranking from the report, we have compiled the best four countries to contract in from the 137 countries ranked. Our 'Group A', if you will. 

Switzerland

Metric Ranking
Total tax rate 31st
No. of procedures to start a business 53rd
Strength of auditing 7th
Countrys capacity to attract talent 1st
Quality of life 1st
Overall ranking 1st

Whilst Switzerland have never been fantastic on the sporting stage (outside a certain tennis player of course), it has topped the World Economic Forum’s Global Competitiveness Report for five years straight. It is also one of the top countries to be a contractor in due to it’s high quality of life, it’s capacity to attract talent and the strength of auditing within the country.

The setbacks for contracting in Switzerland is the tax-rate and the procedures to start a business, which can be lengthy. Whilst the tax rate (tax varies from each province, but averages around 12% for most people) is lower than most countries around Europe, it still is high in comparison to the gulf states and similar tax havens around the world.

Germany

Metric Ranking
Total tax rate 105th
No. of procedures to start a business 104th
Strength of auditing 24th
Countrys capacity to attract talent 13th
Quality of life 11th
Overall ranking 5th

Germany is quite middling when it comes to it’s tax rate (average income tax rate is around 20%) for contractors and the ease of starting a business. However, the real strength of contracting in Germany is it’s strength of auditing, the size of its economy and its quality of life.

Germany is the largest economy in Europe, which means that it has opportunities for contractors to work for one of the numerous large organisations which are based there. Furthermore, the quality of life within Germany is one of the best in Europe.

The tax rate is an issue however, with Germany being the 105th worst country from 135 countries for tax rate according to the World Economic Forum's panel of experts and research.

Sweden

Metric Ranking
Total tax rate 108th
No. of procedures to start a business 7th
Strength of auditing 14th
Countrys capacity to attract talent 26th
Quality of life 8th
Overall ranking 8th

Sweden have always remained competitive in sporting events, even hosting a World Cup and an Olympics in the past. They remain the same when it comes to business, as they consistently rank high on the procedures to start a business, and their strength in auditing.

Swedes are also noted to be one of the happiest nations on earth, which is reflected in their high quality of life. However, the standard of education, infrastructure and healthcare come at a cost, with the tax rate in Sweden being exceptionally high.

United Kingdom

Metric Ranking
Total tax rate 41st
No. of procedures to start a business 4th
Strength of auditing 12th
Countrys capacity to attract talent 3rd
Quality of life 23rd
Overall ranking 7th

It’s coming home. Well, perhaps when it comes to best places to contract in the world. The UK in the overall World Competitiveness report ranks at 8th, however, it has some of the best conditions for contractors in the world.

Whilst the level of taxation is 41st in the report and the highest, the level of taxation for when you set up as a limited company is significantly lower. Starting a business is relatively straightforward too, especially if you hire a dedicated accountant.

The strength of auditing is strong within the United Kingdom, ensuring that contractors will get paid and if the situation comes across that they don’t, the law is set up strongly to protect contractors.

Contracting Advice from ClearSky

If you're a contractor needing advice within the UK or beyond, look no further. At ClearSky Accounting, we realise making the decision to start as a contractor can be daunting, no matter what country you are in. This is why we are here to help.

If you'd like to talk to us further, give our Best Advice team a call on 0800 464 0381.

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