Contractors’ Questions: Is a job in Sri Lanka as simple as the ad says?

Contractor’s Question: I’ve been shortlisted for a one-month tech job in Sri Lanka. I applied as a bit of a punt but it’s come through, and now I need to get a grasp of the compliance situation -- which the advert is very light on in terms of detail.

It does say that I can ‘simply maintain my freelance business’ (they don’t actually know if I’m a PSC or sole trader), while working in a provided, luxury apartment in east Sri Lanka. Is it really that straightforward?

Expert’s Answer: Firstly, congratulations on the prospect of an exotic job! Tax and compliance in Sri Lanka can be a relatively complex landscape and although the project is only short, there are a few things you need to be aware of. 

Most importantly, if you are going to work in Sri Lanka, you will require a work permit. In order to obtain this, you must first have a local sponsor that will act as your employer for the duration of your contract. Once your work permit is in place, you will be paid as an employee in Sri Lanka by the company that sponsored your permit, with taxes deducted at source. In terms of how much this will likely be, total deductions from your income in relation to taxes will be around 33%.

It's important to be aware that working in Sri Lanka without a valid visa can be risky and can lead to deportation. We would strongly recommend that you speak with the company offering you the contract to find out whether they are able to assist with the work permit application and taxes in country.

The expert was Michelle Reilly, CEO of 6CATS International, which advises contractors on overseas contracting compliance.