Freelancing Abroad: How Freelancers Can Protect Themselves From Payment Denial By Foreign Clients

For freelancers chasing opportunities across borders, every new project often begins with excitement. A designer in Bengaluru lands a client in New York, or a writer in Delhi signs on with a firm in London. The appeal seems lucrative – higher pay, international exposure, and the satisfaction of working without geographic limits. Yet behind the glamour of global gigs lies an often overlooked problem: getting paid.

When payments are stalled or refused, freelancers discover a gaping blind spot in protection. Legal remedies are often complicated and costly to pursue across jurisdictions. In many cases, the amount owed is too small compared to the cost of litigation, leaving freelancers with little more than unanswered emails and empty promises.

Contracts – The First Shield

The contract is the first safeguard of protection. It is supposed to be both a guide for the working relationship and a safeguard against disputes. But in practice, many freelancers still work with bare-bones agreements, sometimes a single page agreement with only the payment figure written down. Such contracts leave too much unsaid, from ownership of work to what happens if payments stall.

Germaine Pereira, partner at Solomon & Co., says the difference between a strong and weak contract can decide whether payment disputes can be resolved. “Freelancers should make sure that their agreements explicitly state payment terms such as the amount, currency, payment milestones, and penalties for late payment. Without such clarity, freelancers may find themselves without leverage when clients delay or refuse to transfer funds,” she says.

Aside from payments, contracts should also define intellectual property rights. Adds Pereira, “Ownership rights are important because freelancers retain copyright to the work they produce. Without such acknowledgment, a non-paying client could still use the freelancer’s work with little penalty. For creative workers, this threat is not just monetary but also reputational.

Why Payment Structures Matter 

Timing of the payment is the other form of protection. For freelancers, getting the payments all at once in a big bulk upfront is risky. Phasing payments in stages, advance payment, mid-project payment, and final instalment, ensures the employee at least receives some payment as the project continues.

This milestone system places responsibility on both parties. In case a client fails in the middle, the freelancer has not suffered a total loss. It also provides leverage to freelancers, enabling them to stop work until payment is made.

Pereira says that “even small vagueness in contracts can make it hard to recover payment legally”. As such, points like deadlines, penalties, and phases of work should be defined clearly from the beginning.

Overseas bank fees, transaction charges, and currency exchange also need to be considered. For freelancers who are doing the calculation on their income, surprise charges can erode what appeared to be a tempting project fee. Such clauses have to be negotiated initially, or else the freelancer would end up realising too late that most of the income had been gobbled up by fees.

The Barrier of Jurisdiction

The trickiest issue, however, is jurisdiction. When disputes cross borders, whose laws apply? For an Indian freelancer working with an American or European client, enforcing rights at home can be meaningless if the contract is governed by foreign law. Pereira adds, “If a freelancer is based in India and the client abroad, the client’s country’s laws can be operative, and this can make legal recourse tough.”

This reality often traps freelancers in a dilemma: the legal route is theoretically open, but practically unreachable. Pereira adds: “International arbitration centres in Singapore, London, or New York charge fees that far exceed what most freelancers can afford. Even filing a legal notice abroad comes with costs that may outweigh the payment due.” As a result, many freelancers reluctantly accept unpaid invoices rather than chasing expensive remedies.

Alternatives to Court Battles

It’s due to these limitations that many freelancers turn to alternative forms of dispute resolution. Mediation and arbitration, when included in contracts, can serve as middle paths; they are also structured, quicker, and less formal than court proceedings. Yet, they are only effective if the agreement spells out how and where such processes will happen.

“Freelancers need to go through the contract to check what redressal mechanisms are available. Without specifying the process, it is hard to recover payment if the client doesn’t agree,” she says. In other words, the chance to avoid lengthy disputes is lost before the work even begins, if contracts are vague or silent on remedies.

Lessons From COVID-19

Unforeseen interruptions underpin the vulnerability of freelance contracts. The Covid-19 pandemic, with its postponed events and ceased budgets, was a trial by stress for freelancers across the globe. Lacking protective clauses in their contracts, workers were left high and dry, unable to assert their rights for payment on abandoned work due to lockdowns or curbs.

In this case, a force majeure clause, a provision which allows for unexpected events, such as natural disasters, pandemics, or political disturbances, came to the rescue. “A properly drafted force majeure clause can protect freelancers from being held liable for delays caused by unexpected events,” Pereira adds.

Aside from pandemics, such provisions can also be in support of natural disasters, such as floods, travel bans, or government sanctions. For freelancers, who lack the buffer of funds possessed by bigger companies, these provisions could mean the difference between survival through a crisis or huge losses.

Mindset Shifts

Due to the limited safeguards, freelancers need to take pragmatic measures and a preventive measure as well. This includes negotiating contracts which specify payment schedules, milestones, rights of disconnection, jurisdiction, and dispute resolution mechanisms. Being transparent with clients about timelines and expectations is equally critical. Maintaining detailed accounts, emails, invoices, and drafts, also supports any future legal disagreement.

A Blind Spot That Needs Attention

Freelancing is now no longer an alternative career. Millions now rely on it as the main source of income, particularly in emerging economies where foreign exchange earnings from global clients is worth the effort. However, the mechanisms that safeguard these workers are still underdeveloped.

“Freelancers need to take an active role in safeguarding their interests through negotiation of clear contracts and familiarity with the legalities of working with clients from various jurisdictions,” she further says.