There is a fundamental difference between freelancing and working for a foreign company. Freelancing means having many clients and one-off projects. Here, we are talking about ongoing cooperation with one company, full-time employment, and regular payment, meaning that it is essentially a job, but arranged differently. We will start with the arrangement itself, since both your income and your rights depend on it.

Three Models and the Difference Between Them

The first model is an independent contractor, meaning that you register entrepreneurial activity, enter into a contract with the company, and invoice it for your services. This is the most common option for Ukrainians. The company pays you under the contract, while you pay all taxes independently in Ukraine. The second model is arrangement through an intermediary, which is called a record employer. There are specialized services, with the best known being Deel, Remote.com, and Rippling. It works as follows. The company does not have a legal entity in your country, so it hires you through an intermediary, which officially employs you as an employee and takes responsibility for taxes, contributions, and HR administration. For you, this is closer to regular employment, meaning that paid vacation and other elements of the social benefits package appear. The third model concerns the Ukrainian jurisdiction, meaning a gig contract within the special regime for technology companies, and it is suitable when the company has an appropriate structure here.

How a Contractor Differs from an Employee

This is the most important section, since this is where people make mistakes when evaluating an offer. In the contractor model, you do not have paid vacation, paid sick leave, paid public holidays, or severance pay upon termination of the contract. The contract usually provides for a short notice period for termination, meaning that cooperation can end quickly and without compensation.

In addition, you independently pay all taxes and the fixed social contribution, keep records, and are responsible for reporting. All of this means that a contractor's rate should be higher than the equivalent salary, rather than equal to it.

How to Calculate Your Rate

A simple way to estimate how much you actually receive looks like this. The absence of paid vacation of approximately twenty-four days corresponds to approximately ten percent of annual income. The absence of paid public holidays adds another approximately four percent. The absence of paid sick leave adds a certain percentage depending on how often you get sick. Taxes and the social contribution, which an employer pays for an ordinary employee, fall on you here. In total, in order for a contractor to reach the same actual level as an employee with the same salary, their rate should be approximately twenty to thirty percent higher. Therefore, an offer with the same figure in different models means different real conditions, and this should be taken into account when comparing them.

What Is Needed for the Arrangement

The practical minimum based on the experience of those who work under direct contracts looks like this. Registered entrepreneurial activity, and for working with foreign clients, the third group of the simplified taxation system with a five percent single tax rate is usually chosen. An open foreign-currency entrepreneur account, since without it it is impossible to receive payment in foreign currency.

A contract with the client, preferably in two languages, meaning English and Ukrainian, since the Ukrainian copy is required for the bank. Invoices, meaning bills for each period, since they are the basis for crediting funds. A qualified electronic signature for signing documents remotely. Everything else, meaning the hourly rate, number of vacation days, and other conditions, is agreed upon through correspondence before signing the contract.

Payment and Currency Control

Funds are received either directly into the entrepreneur's foreign-currency account or through payment services such as Wise or Payoneer, followed by a transfer to a Ukrainian account. There are two rules here that are worth knowing in advance. Foreign-currency revenue must be transferred to a Ukrainian account within the established period, and currently it is one hundred and eighty days. Income is recorded at the National Bank's exchange rate on the date the funds are credited to your account. For an individual without registered entrepreneurial activity, there are restrictions on receiving funds of an entrepreneurial nature, so the scheme of transfers to a personal card is not only a violation but also practically unreliable.

Taxes

The mechanics here are the same as in freelancing, since this is the same regime. A single tax at a rate of five percent, a military levy at a rate of one percent, and a fixed monthly social contribution. The key detail that people most often get wrong is that income is declared in the full accrued amount, rather than the amount that arrived after payment service fees. I wrote more about this in the material about freelancing, including the form for confirming tax residency, which makes it possible to avoid tax withholding on the United States side.

Where to Look

International platforms are the main channel. LinkedIn remains the main platform, and this is where most initial contacts take place. Specialized remote job boards, including We Work Remotely, Remotive, and Himalayas, are convenient because there are no office positions there, and on some of them salaries are listed transparently. General aggregators such as Indeed and Glassdoor also work, with the latter also being useful for employer reviews. Ukrainian resources are also worth using, since some foreign companies post vacancies specifically there to look for specialists from our market. These include DOU with a remote-position filter, Djinni, UATalents, and Happy Monday. It is worth taking into account a practical observation from materials about job searching, according to which mass resume submissions work worse than a targeted approach, meaning detailed work on a smaller number of positions with the resume adapted to each one.

Practical Obstacles to Know About in Advance

Time zones are the first real limitation. For European companies, the difference is minimal, while for American ones it can mean a working day shifted into the evening and night. This should be clarified before, rather than after, signing the contract. Language is the second filter. For most positions, you need not just technical English, but the ability to conduct meetings, explain things, and argue.

Competition is the third factor, since for a remote position you compete not with people from your city, but with specialists from dozens of countries. The absence of official employment in the Ukrainian sense means the absence of an employment record book and corresponding employment history, although the entrepreneur's social contribution does form employment history. Separately, companies are often interested in the stability of your availability, and this question should be thought through and formulated in advance, rather than during the interview.

Red Flags

The absence of a written contract and an offer to work on trust. A request to move the communication to a private messenger immediately after the first contact. Payment to a personal card instead of the entrepreneur's account. A requirement to pay for training, equipment, or registration. Vague responsibility for the result and the absence of a clear description of duties. A refusal to provide information about the employer's legal entity. An unrealistically high rate with low qualification requirements. I wrote in detail about the mechanics of such schemes in the material about earning money online, since fake vacancies are one of the most common areas of fraud.

What to Check Before Signing

What exact arrangement model is being offered. Who is the party to the contract, meaning the company itself or an intermediary. What is the notice period for termination of cooperation. Whether paid days of absence are provided. Who pays the fees for transferring funds. In what currency and how frequently payment is made. Who owns the rights to the results of your work. Whether there are restrictions on working for other clients.


Sources

DOU materials based on the experience of Ukrainian specialists under direct contracts, legal reviews of cross-border remote work, publications by PSM7 and Ukraine Pulse regarding the search for remote vacancies