Top 4 overseas contracting hotspots of 2014
Strong demand for IT contractors won’t just be found in the UK this year, as four overseas locations are shaping up to become ‘hotspots’ for such temporary professionals in 2014, writes Matt Walters of Capital Consulting.
But before we take a closer look at this promising quartet, let’s review the year that was. In the first quarter of 2013, we predicted to ContractorUK that conditions for UK IT contractors would be most fertile in Brazil, Norway, Switzerland, the Netherlands and Romania.
It is only the latter country that didn’t live up to expectations. Indeed, while Romania continues to generate a lot of interest from various industries, the large projects seem to continually get pushed back.
Romania wasn’t helped by its rivals’ comparative strength. Brazil saw continual growth and investment in multiple industries in 2013, with power generation taking the lead. Switzerland, likewise, enjoyed a good year, especially thanks to the pharmaceutical and IT industries pouring more money into new projects. And Norway and the Netherlands also excelled last year as destinations for contractors. In fact, the only reason for not including these two in our latest list of contracting hotspots, below, is to allow some space for newly developing contractor-friendly locations to feature.
So for 2014, here are the overseas destinations that we expect to be ‘hot’ for contractors:
Switzerland may be in the news recently for a vote aimed towards reducing immigration but is still ‘business as usual’ for IT and other contractors looking to come to the country. Offering a large number of opportunities in the pharmaceutical, technology and banking industries, Switzerland is expected to be a strong location for contractors in 2014.
South Africa is the gateway to Africa. It can boast of a focused economic policy on controlled inflation and has seen steady recovery since the 2009 financial crisis. With industries ranging from oil and gas to mining and telecoms, we expect the requirement for skilled workers to increase throughout 2014. Local tax and social charges are not excessive, which results in South Africa being an exciting and developing location for international contractors.
Brazil continues to produce a large amount of interest across a variety of industries, lead by the energy sector, and telecoms interest in the largest South American country continues to grow. Contractors can benefit from a tax free period of 183 days and then will be taxed in the region of 26% with no deductions for Social Security. This results in financially attractive opportunities in a new and developing market.
Poland has the largest economy in Eastern Europe and the contractor market has slowly been building across all industries. While recent years were very modest for IT projects in the commercial sector, the nation’s IT spending is now forecast to grow by 10% until 2016.
So we are expecting 2014 to be the year when Poland widely opens its doors to international contractors, encouraged, no doubt, by its movement up the World Bank’s Doing Business rankings – it notched up last year by 19 places. That improvement is partly thanks to Poland making it easier and less time-consuming to enforce commercial contracts.
Poland’s progress as a business location has been noticed by tech giants, including Google, which has set up a laboratory to exploit the country’s strength in producing good computer programmers. Contract opportunities won’t just come from outside or Western investors though -- the Financial Times recently reported that Poland is “flooded with money aimed at start-ups from the Polish government and the EU.”
From a UK’s contractor point of view, Poland’s tax and social system has the reputation of being complex, but with the right assistance it is certainly manageable and can be an attractive location for contractors, both financially and culturally.
Editor's Note: Capital Consulting is an international payroll and compliance company, providing expert services and advice to contractors working across Europe, Latin America and Africa.