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How can I hire subcontractors outside Estonia?

Última actualización: October 08, 2024

If you need to hire somebody based outside Estonia, your Estonian company is a suitable model for hiring independent freelancers or subcontractors across the globe. There are two methods for paying freelancers/subcontractors:

  1. Signing a service contract because a private person cannot issue an invoice according to Estonian law. Your company pays the freelancer a sum agreed upon, and the freelancer is responsible for declaring and paying the relevant income and social taxes, in the country where he/she operates.

    Xolo has a solution available for you to easily prepare the collaboration contract by following the steps below:
  • Login to Xolo self-service.
  • Under ‘Collaborations’ select ‘Add contract’.
  • Fill in the service terms agreed with your freelancer and click ‘Save and preview’.
  • If the contract preview is correct click ‘Request signature’ to send the contract draft directly to the freelancer. The freelancer receives an email and needs to complete a short sign-up process to provide their details and sign the contract.
  • After the freelancer has signed the contract you'll see a notification in Xolo self-service about a contract waiting for your signature.

  1. The freelancer issues your company an invoice for his/her services in the name of his/her legal entity. The invoice must also reflect the legal entity's registration code. Ensure that an agreement is established with the counterparty, either through the 'Collaboration' feature or as a separate agreement.

The Collaborations feature can be used both for freelancers and companies. After the contract has been signed by both parties it is considered an accounting base document for categorizing payments to the freelancer. For companies, an invoice is still required besides the signed contract.

If you already have a separate agreement signed with your freelancer or business partner and would like to upload a customer contract for the first time, please let us know at support@xolo.io, so we can activate the feature. But make sure the contract includes both parties' details, such as name, address, registration code, etc.

In contrast to cooperating with independent freelancers across the globe, your company cannot hire anybody working outside Estonia on a permanent basis as an official employee on your company’s payroll. This triggers the need to register your company as a non-resident employer in his/her location and comply with local rules and regulations.

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