Disclaimer: This article is not a substitute for legal nor accounting advice. Look for professional advice before you take action.
Are you about to make a move? Are you tired of the traditional business model? You are searching for overseas opportunities but do not want to leave the beautiful Brazilian beaches and rich culture? Well, did you know Brazil represents the nerve center for many startup companies seeking technological talent?
Brazil has a thriving and popular tech scene, most software developers speak English and the time zone is not that different from that of the US. This makes Brazil the perfect place for US-based companies to hire remote workers, especially for software engineering and other technical roles.
More companies are beginning to adopt remote work. American companies, in particular, are not only adopting telecommuting as a means to deal with COVID-19 but also to get an edge over their competitors by bringing on the best international talent.
In this article, we’ll teach you how to set yourself up as an independent contractor in Brazil so you can start working remotely for a US company by hashing out the details of remote visa requirements, how to receive payments, and information on taxes you must pay.
Will I need a Work Visa to be hired by a US Company as a Remote Contractor?
You have probably heard (true) rumors about the tight visa restrictions for foreign workers in the US. As a Brazilian remote worker searching for work at a US company, the visa requirement is probably one of your main concerns. Rest assured, work permits are mandatory for those working within the US territory. Being a remote contractor makes you exempt from this requirement.
If you are a remote contractor working from Brazil you will be classified as an “nonresident alien”. This means that the services you perform for the US company will result in foreign source income. Because of this, neither you nor the company that hires you will have to report or pay U.S federal income tax. So, what does this mean for you? It means it will be easier for the company to hire you as a full-time employee. Basically, good news! This eliminates an entry barrier to the US company of your dreams.
Foreign labor certification programs’ objective is to protect locals and ensure them job opportunities and good working conditions. So, according to the Department of Labor, as long as you are outside of the US you are not a threat to Americans’ job opportunities.
As a Non-U.S. citizen or ‘nonresident alien’ working from abroad, you are not liable to pay U.S. income taxes. This is simply because the US authorities impose these taxes only on those working within the US territory. If at some point your situation changes and you start working for the company while being physically present in the U.S. you will have to pay them. Bear in mind that not paying U.S. taxes does not mean you pay no taxes at all. You are still legally obligated to pay your taxes as required by Brazilian law.
Which taxes will I need to pay as a remote contractor working from Brazil?
If you become a remote contractor working from Brazil and earning more than 10.000BRL in a year you will need to register as an independent contractor. This will make your earnings legal and will allow you to defend yourself legally in the event of a problem with your contract.
You can register as an individual or as an entity. As an individual, you can register as a self-employed individual (trabalhador autonomo). As an entity:
- If you earn up to R $ 81 000 you can register as an Individual Micro Entrepreneur(MEI).
- If you have an annual billing of up to R $360 000 you can register as a Microenterprise (EI).
- If you earn more you can register as an Individual Limited Liability Company (EIRELI), but this is a bit more complex and you will need an accountant.
Being a self-employed individual will require you to enroll for tax and social security purposes with the Federal Revenue Service and sometimes may require an additional municipal taxpayer registration. It will be your responsibility to remit taxes to Brazilian authorities (IRFF). You will be liable to pay federal income tax which in Brazil is a progressive tax ranging from 7.5% to 27.5%. This tax is paid annually and must be filed electronically to the Brazilian IRS (Receita Federal) by April 30th. Some expenses may be deductible, such as social security, pension contributions, tuition expenses, and medical expenses.
As an individual micro entrepreneur (MEI)
You will be liable for monthly payments of Simples Nacional for the provision of services. The value is calculated as a percentage of the monthly wage limit (usually 5%) and an additional R $ 5.00 (five reais) as an ISS taxpayer of this tax. If you are a contributor of the tax, ICMS, the additional value is R $ 1.00 (one real).
Registering as an individual micro entrepreneur (MEI) entitles you to:
- Social Security coverage
- Maternity allowance
- Paid leave due to health problems
- Exemption from federal taxes (income tax, PIS Cofins, IPI, and CSLL)
- Open a bank account to have access to credit with cheaper interest rates
As an Individual Entrepreneur (EI)
You and your business will be legally considered the same. So your assets, liabilities, and income are connected and therefore you will be liable for any debts your business may have.
Getting Paid: How To Receive International Payments When Working Remotely from Brazil
Remote working contracts can present some difficulties for companies especially when establishing how to pay the contractor. Getting paid in Brazil is not a difficult task, you just need to choose the method that best suits you. Remember to take into account Brazil’s currency fluctuations when establishing how much you will get paid.
Here are a few examples of ways through which you could receive payment for your services:
Through a bank transfer using SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunications) is a secure network that financial institutions use to transfer money worldwide. It is very secure and used by several banks around the world. SWIFT payments are routed across multiple banks which results in several fee deductions. Your bank will also likely add a conversion markup of 3% to 6% plus an extra fee for receiving a SWIFT payment.
Through companies that transfer money
Husky and Remessa Online are the most commonly used platforms in Brazil. They offer relatively low fees and competitive exchange rates. They help remote contractors better manage their payments. These platforms feature inbuilt invoicing tools to help you streamline your billing process and offer prepaid Mastercard or Visa cards to make accessing your funds easier.
You can also check out these other platforms that have similar services:
The downside is some do not allow business transactions and only allow personal transactions. In addition, they tend to charge additional fees and sometimes may require you to withdraw money from the money transfer provider paying a withdrawal fee.
Through a local exchange brokers
You or the company will need to find an exchange broker in Brazil that can facilitate the money transfer.
The easiest way to avoid currency fluctuation problems is through cryptocurrencies. This will require you to set up a crypto account in order to receive the payments. Review the tax compliance regulations for cryptocurrencies in Brazil with an experienced tax professional before setting up this option.
Become A Remote Contractor At The Best US Companies Today
If you’re a senior or semi-senior developer in Brazil, that means you’re in luck, as there has never been a better time to seek out a new, exciting remote contract job at a US company. At Nexton, we pride ourselves on helping American companies find talent in Brazil and helping senior LATAM engineers find their dream jobs.
We accompany developers throughout the hiring process up until they receive an offer from a particular company. Our team of recruiters also offers administrative support to engineers regarding the roles they are applying for. Finally, once an offer has been accepted, we let the employer and new hire hash out the way they want to handle their payments.
We specialize in connecting top engineers from Latin America with the most rewarding remote worker jobs at the best companies in the US. Our experienced team of recruiters has a solid understanding of the needs of remote contractors and developers living in South America, and we pride ourselves on helping each candidate find the right position.
For more tips on how to prepare for a remote contractor job, check out our recent articles on interviewing, salary expectations, and finding the right company culture. Also, remember to bookmark our blog for more articles like this.