Contracting Abroad

How does an umbrella company work?

As an umbrella company contractor, you are employed by your umbrella company.

An umbrella company is essentially the middle man between the contractor and their client; the umbrella employs a temporary worker on behalf of an employment agency and the agency will then provide the services of the worker to their clients.

A contractor will still need to find their own work – it’s not up to the umbrella company to find the clients, just to deal with the admin side of things.

Read our Benefits of using an Umbrella Company page for more information on the advantages that come with the umbrella route.

How do you get paid through an umbrella company?

The umbrella company will provide you with a payslip – they will pay you for the work you complete for an employment agency’s client and will deduct any income tax or National Insurance Contributions (NICs) due, as well as administration costs.

Your payslip will include your contract pay, the number of hours you’ve worked and the amount of deductions.

I’ve found work abroad, what is the 183-day rule and how does it affect me?

If you’re given the opportunity to work abroad then, as an umbrella company contractor, the 183-day rule will apply to you.

This means that those carrying out work in a foreign country for less than 183 days won’t need to become tax residents and therefore won’t need to pay any of the taxes of that country.

So, by taking on an overseas contract within this timeframe, your pay will be subject to UK Income tax and National Insurance.

It is worth remembering that taking on a contract abroad will affect the amount that you are paid due to exchange rate fluctuations – your pay will be automatically exchanged into GBP by your umbrella company.

International Umbrella

International contracts are becoming far more popular, and they can often result in a higher level of pay. However, it’s common for an international company not to allow you to use a UK based Umbrella company. In this situation we advise you work with our in-country partner, Gibson Watts Global.

Gibson Watts Global offer services specifically for contractors working overseas. A PEO, Professional Employer Organisation, is a third party that acts as an employer of record on behalf of their clients that then covers functions such as payroll, risk, management and retention. They offer a swift way to start contracting overseas, taking advantage of pre-existing entities that have already taken care of legislation and red tape that can lead to delay in commencing a contract.

They pride themselves on a human approach which is efficient and tailored to your unique needs. Using advanced technology with years of industry experience, ensuring fast, impactful solutions that align with your business goals. Offering personalised support with cutting-edge research methods, Gison-Watts Global deliver results that empower your organisation to expand confidently, retain top talent and drive sustainable growth.

International Umbrella FAQ’s

What sets this EOR service apart from others?

Gibson-Watts Global take a highly personalised approach that centres on the satisfaction of your employees and provides seamless support for your organisation’s growth. Each client has a dedicated consultant as their primary contact from start to finish, ensuring transparency and smooth communication at every step. We share your goals, acting as an extension of your team to simplify and support your international expansion efforts.

How does an EOR help with compliance in foreign markets?

An EOR manages local employment responsibilities on your behalf, including compliance with local labor laws, tax regulations, and benefits requirements. Gibson-Watts Global stay updated on all relevant legislative changes to keep your business compliant, minimizing risks as you expand into new markets. This allows you to focus on your core business activities while we handle regulatory complexities.

How are employees supported in understanding new cultural and legal environments?

They provide comprehensive support that extends beyond legal compliance. Your dedicated consultant not only oversees employment logistics but also offers resources on cultural practices and workplace expectations in your new market. This ensures employees feel valued, informed, and confident, which makes it easier for them to integrate smoothly into their roles and environments.

Will I maintain control over the daily activities of my international team?

Absolutely. While Gibson-Watts Global manage the administrative and compliance-related aspects, you retain full control over your team’s daily tasks and performance management. Their role is to act as a bridge between your company and the local workforce, handling employment logistics so you can focus on leading your team and driving business goals.

What kind of support can I expect after successfully entering a new market?

Their support continues well beyond initial entry into a new market, offering ongoing assistance, monitoring regulatory changes, updating employment contracts as needed and providing cultural insights. Your dedicated consultant remains available to answer questions and provide solutions as your organisation and workforce grow, ensuring employee satisfaction and the long-term success of your expansion.

Find out how Gibson-Watts Global can help you as your in-country partner:
https://global.gibsonwatts.com/contractor-umbrella/

Choosing the best umbrella company

You need to know that you’re in the right hands when it comes to your umbrella company – ensuring that you are given the correct legal advice on all areas (such as the 183-day rule).

There are a lot of factors to take into consideration when choosing a good umbrella company and so it’s vital to do you research.

Here are a few things to look out for:

• Do they have good reviews and testimonials?
  Look at reviews to get an idea of what people really think of the umbrella company you’re thinking of working through.
• Do they provide a personal service?
  Having a go-to person who deals with all of your work is so important for a hassle-free umbrella experience.
• Have they been in business for a long time?
  Experience is key with any business, giving you peace of mind that they know what they’re doing.
• Do they have any awards?
  Recognition for the work they do is always a comforting factor when it comes to choosing the best umbrella company – make sure that their awards are fairly recent too.

For more information choosing an umbrella company, read our Best Umbrella Company page.

If you’d like to sign up or need any further information on working through an umbrella company, please call one our friendly experts on 01206 591 000 or email Jaime at jaime.thorpe@contractorumbrella.com.