Contractors' Questions: How to invoice a client overseas?

Contractor’s Question: I'm a French national who has lived in England for a few months. A company near my home town in France would like to work with me as a freelance, in a ‘direct-to-client’ arrangement. But now I’m living in the UK, how do I go about invoicing companies in other countries; what are the legal requirements of my invoice, for example, if I’m invoicing a Paris-based business? Is it similar to invoicing in the UK, which I’ve been reading up about?

Also, does the late payment law in the UK extend to France or can it be applied there, assuming I’m a UK resident doing some freelance work for a Paris-based client? Or is up to me to just state how many days I want to be paid from invoicing, and then following whatever French law says if I’m not paid.

Expert’s Answer: Presuming you do not already have a contract in place, the first action you should take is to create a written contract between you and your customer. The contract should include terms and conditions that set out how you will conduct business with the customer. The terms and conditions should make it clear when payment is due and the consequences of failing to make payment.

For example, the payment terms may state:

  1. Payment 30 days from invoice
  2. Invoices shall be paid when due without any deductions and the customer is not allowed to withhold any payment due to you to set-off its counterclaim
  3. If payment is not made on or before the due date, you will exercise your statutory right to claim interest and compensation for debt recovery costs under the Late Payment of Commercial Debts (Interest) Act 1998 and the Late Payment of Commercial Debts Regulations 2002.

You should also re-state your payment terms on every invoice. Invoices can be sent to the French customer the same way you would send them to a customer in England.

In the event the customer does not make payment, you may have to take legal action and issue court proceedings. Preferably, you would want to issue a claim in an English court but English courts will not necessarily have the jurisdiction to deal with the claim because your customer is in France.

If you do not have a written contract, the courts will refer to the Brussels Regulation. If you complete the work in England, it could be argued the contract was performed in England and therefore the claim should be heard in England under Article 5(1) of the Brussels Regulation.

However, it would be open to a challenge from your French customer who would probably argue that any claim should be heard in France. That is when it can get expensive and complicated.

Do not leave it to chance and make sure you have a written contract, as advised, and include a term dealing with jurisdiction. The term should make it clear that you and the customer submit to the jurisdiction of the English Courts and that English law applies.

The  expert was Michael Higgins LLB, a solicitor at debt recovery law firm Lovetts.

Editor's Note: Further Reading -

Contractors' Questions: How to invoice clients in the EU?

All that glitters to IT contractors overseas may not be gold


Friday 27th Jan 2012
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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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