A hidden opportunity for UK companies:
Why hire Palestinian tech contractors?

Aug. 6, 2020

Why hire contractors from the Palestinian Territories?

Palestinian contractors working remotely in the fields of software engineering and UX/UI design offer a number of advantages which many UK companies may not be aware of. Here are three of the main ones:

  • Highly educated and competitive salaries - in general the wages in the West Bank and Gaza are far below the international average for high-skilled technical work. Most Palestinian tech professionals hold higher degrees in computer science, software engineering or related fields, offering great value for UK companies compared to other overseas contractors.
  • Women in tech - diversity in the workplace is not just a moral imperative but also results in more successful and inclusive digital products. Today 52% of computer science students in the Palestinian Territories are women with many unable to find work in their chosen field. In the UK this figure is just 13%.
  • Time Zone - the Palestinian Territories are only 2 hours ahead of the UK. For many companies this will be an important consideration to ensure that their local and remote teams can collaborate and coordinate their efforts effectively.

What type of contract should we use?

As will be the case for hiring any external contractor, it is important to clearly outline all work responsibilities and expectations in writing before starting a new business relationship. 

This agreement can be adapted from existing documents the company uses for contractors or by simply modifying a subcontracting template from an online service such as Rocket Lawyer.

Why not go through a traditional outsourcing agency?

Hiring directly is a win-win for both the Palestinian contractor and the company. The company gets a more competitive price for the project and the Palestinian developer or designer receives the full value of the contract.

How do we arrange payment?

Sending money to the Palestinian Territories has not always been the most straightforward task. Conventional bank or wire transfers with services such as Western Union impose high fees and Paypal is not available at all in Palestine.   

Fortunately in recent years the situation has become much easier. Many Palestinians who are signed up to freelancing platforms such as Upwork or Fiver already use an  online payments service called Payoneer. This platform has been in operation since 2005 and has a partnership with Mastercard.

Payoneer is an attractive option because if both the company and the contractor have Payoneer accounts, the transfer is completely free and usually takes place within a couple of minutes.

It should be noted that Payoneer is not a perfect solution for Palestinians. They must pay an annual fee for a pre-paid Payoneer Mastercard debit card to use the funds they receive. Local banks also impose extra fees when using the card to withdraw cash from their ATMs. 

Having said this, Payoneer is probably the most well-known and well- established option available in the Palestinian Territories. Other services also worth exploring are: WorldFirst, WorldRemit and CurrencyFair.

Are there any tax or other regulatory implications involved?

Palestinians, like other foreign contracted workers resident abroad are not obliged to pay any tax to HMRC and can be paid their gross salary. A common practice by many UK companies hiring remote workers is to classify these contractors with the “No Tax” code in their monthly payroll system. It is the responsibility of the contractors themselves to declare this self-employed income to the local Palestinian tax authority.

There is a great deal of complexity and confusion surrounding the new IR-35 rule for contractors in the UK. But in the case of hiring Palestinians the situation is fortunately very simple: as long as he or she has not lived in the UK for a year or more, they are not liable to pay UK taxes and therefore the IR-35 rule does not apply to them at all.

How can I find Palestinian tech contractors?

If you are interested in finding and hiring Palestinian contractors, Palestine Tech Jobs is currently the only platform for posting jobs aimed specifically at Palestinian tech professionals:

  • The Website - palestinetechjobs.com averages 3.5/4k unique visitors per month. 80/90% of these visitors are from the Palestinian territories. 
  • Our Facebook group recently reached over 2,000 members and currently stands at 2,027 (increasing every day). Members are instantly notified as soon as new jobs are posted.
  • You can also reach candidates through our weekly email newsletter with over 600 subscribers and an average open rate of 50%.

Daniel Easterman is the founder of Palestine Tech Jobs and a former software engineer at Zego (ranked by Wired UK as one of London’s top startups for 2018).

For information on pricing and how much it will cost to post your job on Palestine Tech Jobs, contact him here: [email protected]

Sari Taha also advised and contributed to this report. Sari is an entrepreneurship and technology sector consultant based in Palestine. He can be contacted here: [email protected] 

 

Disclaimer: This guide is not intended as formal legal advice and is for informational purposes only. It is always prudent to consult with a lawyer or professional accountant before concluding a written agreement with an overseas contractor.