The Euro Crisis Presents a Unique Opportunity for Freelancers
Unless you’ve been living underneath a very large rock for the past couple of years, you’ve probably heard that Europe is teetering on the brink of financial armageddon.
While there’s no shortage of doom and gloom in the the global outlook, it’s not all bad news – especially if you’re a freelancer. There’s opportunity in every crisis, and mobile workers are now in a better position than ever.
As freelancers who aren’t tied to a desk and a physical location, we’re uniquely poised to take advantage of the shifting financial landscape.
The Euro Crisis in a Nutshell
The Euro (EUR) is used by 17 member states within the European Union. The common currency performed well in the early 2000s, but since 2009 has been embroiled in a severe and complicated debt crisis.
The net result of all this is that the EUR has nosedived in value, relative to most other major currencies.
The looming threat of one or more Eurozone members defaulting on their debts has scared the bejesus out of currency investors, who are dumping the Euro en masse and looking for a safer place to park their money.
The net result of all this is that the EUR has nosedived in value, relative to most other major currencies. The US, Canadian and New Zealand Dollars are all worth significantly more against the Euro now than they were three years ago.
The biggest winner, however, has been the Australian Dollar, which has gained a whopping 60 percent on the Euro since early 2009.
Dollar-Earning Freelancers Can Capitalize on a Weaker Euro
The huge advantage that remote freelancers enjoy is the ability to earn money in one place and spend it somewhere else. If the bulk of your freelance income is dollars, you might want to give some serious thought to a long-term working holiday in Europe.
As an Australian freelancer living in Germany, I’ve watched the value of my income rise steadily over the last couple of years, without ever increasing my fees or taking on extra work.
I’ve crunched some numbers and determined that my cost of living here in Berlin, taking account of the current exchange rate, is less than half of what the same lifestyle would cost me in Sydney or Melbourne. Earning the AUD while spending the EUR has been a very favorable arrangement. And Berlin is an amazing place to live.
For a regular 9-5 desk jockey, currency fluctuations mean next to nothing. But for freelancers and remote workers, this is the stuff we thrive on. We’re the lucky few who can jump the fence and turn financial turmoil into personal gain. So I say pack your bags, and get in while the getting is good.
Photo credit: Some rights reserved by brux.
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Hi Tim,
Good info here! My goal is to move to Europe in a few years, after I get established as a freelance writer here in the U.S. How do taxes work, when you work remotely? If I work in Paris, for example, and my customers are in the U.S., do I have to pay any sort of taxes or fees to the country I’m in? What if I get some customers in France while I’m living there? Do I have to get a work permit or register with the country’s government?
Many thanks,
Kim
Hi Kim,
I’m from Australia, so I couldn’t give you any iron-clad advice on U.S. tax rules unfortunately.
I just pay taxes to the Australian government as I would normally back home. I’m only here in Germany on a temporary visa, so I’m still considered an Australian resident for tax purposes. If I took permanent residency here in Germany, then I would need to start paying German tax, and stop paying Australian tax.
I image you would be in a similar situation with the U.S. tax system. Although I heard somewhere that the U.S. Government still taxes American citizens who are working overseas? I guess you’d need to talk to the IRS about that.
As far as work permits go, it all depends how long you want to stay in the country. If you just want to spend a few months in Europe to try it out, you can stay for up to 90 days on a tourist visa. Beyond that, you’ll need to get some sort of working holiday or residence visa. Since you’re not technically working in the country, you really just need any visa that allows you to live there.
Hope this helps! Let me know if you have any more questions.
Cheers,
Tim
Hi Kim,
Don’t take this as given, but the French tax system will hammer you if you decide to live full time ish in France. If your customers are outside it doesn’t matter, and also don’t forget Uncle Sam is the first person who will want to be paid, but France will have a treaty in place so that you don’t have to pay tax in both places. Taxes in Europe in general are high except some Eastern European countries where they have a flat tax of about 20%, how sensible in my view, but always get expert advice so you don’t end up in trouble.
Thank you, Tim and Tom, for the helpful insights. I think I have a fair bit of research to do!
A very insightful piece which provides some useful ideas for foreigners caught abroad during the worst of this crisis.
Lets hope more Australians and Kiwis take advantage of this fantastic exchange rate and see the world!
You said it! I think 2012 will be Year of The Australian Tourist (like there weren’t enough of them already).
Interesting article and unfortunately, it seems like I have been under a rock for a bit. I have clients over in the UK and my income is based on US dollars, so a momentarily boost may be headed my way, which of course is a good sign. A great article for freelancers across the playing field, especially for the programming and writing fields.
I couldn’t agree more with Tim.
Berlin IS an amazing place and the Germans are by no means ‘cold’. Personally I have a lot of german friends and they are a lot of fun and Berlin is an active and culturally interesting place to be. You really should visit it one day. You will be pleasantly suprised.
Interesting comments. I never even thought about this side of freelancing. As a web designer based in the uk I am wondering if it would benefit me moving over to Europe as we are not using the euro. I will have to see how the pound is eating against the euro.
The GBP/EUR rate hasn’t changed a huge amount over the last couple of years – much less than the USD or AUD. But you’ll still be a in a better financial position if you move somewhere in Europe with a lower cost of living than where you are now.
Your best bet would be to move to a less-expensive destination in the Eurozone, and try to get some clients in the US or Australia who pay you in dollars.
Hi there I have just become a freelancer in Dubai Media City.
This article was one of the first I read after my switch. It is such a breathe of fresh air.
Thanks
Glad you enjoyed it. What kind of freelance work are you doing in Dubai?
Hello Tim
Thank you for a great insightful article. Ensuring that my judgement of the times as best for a freelancer was not wrong after-all.
I just became a full-time freelancer myself and this article re-iterates that I have don’t have to think twice.
Thanks
Good to hear that you’ve taken the plunge. These are definitely the best of days for freelancers I reckon.
Tough economic times suit us just fine. Huge currency fluctuations to take advantage of, and an increasing demand for outsourced services as companies downsize their workforce.
Happy days! Good luck on your journey.
actually, the Euro-Dollar has been quite constant… the only currency that nosedived was the dollar, and that before the crunch
http://www.minnpost.com/_asset/54qng4/mp_main_wide/EuroDollarExchangeRate452.png
Hi Tim,
I’m so glad I came across your article (even only half a year late) but it sort of describes my situation really well. I wondered if you had a little advice for me.
I’m a german citizen and just moved to Berlin but lived and worked the past 6 years in New Zealand and hold a NZ resident visa. I just got myself some freelance work from a company I used to work for in Auckland and not sure now in terms of tax who to pay here. Germany or New Zealand?
Any ideas or advice would be much appreciated! Thanks a mil!
Freelancers and Traders!
Hi Tim,
I’m a Melbournian living in Spain, I’ve just been offered a great Freelance position software testing for a IT company, they’ve asked me to provide them with a Australian Fiscal Residence Certificate??? is this just my birth certificate? they also want me to provide them with an invoice at the end of each month, I’m not sure what the logistics of this is when it comes to submitting the correct papers are as I’ve never worked freelance before? did you have similar issues in Germany?? any advice would help a great deal? thanks.
Regards
Boris