Escrow system for working from abroad

[Goustan BODIN]

I am discussing freelancing a planting design for a client in China, and as much as i need work these days, Chinese clients have a bad reputation for paying their service providers abroad.

I am looking for a solution to somehow secure payment, ideally some sort of escrow system.

Experiences or ideas to share ?

[Rob Halpern]

Aside from the client’s intention to pay or speed of payment, there are legal roadblocks to slow down their payment and even to take fees out. In short, unlike a client in Europe, the Chinese cannot simply do a wire transfer even if they want to.

The projects I have worked on in China include a local Chinese licensed office that is part of an international firm. They receive payment, employ a transfer agent to do the necessary paperwork to get the transfer of funds out of the country approved, take a cut, and eventually transfer it from their Chinese office to their (in my case) NY office. Takes forever and I lose 17% (which is tax deductible, at least).

I have had a client who is very good about quick payment processing and one who is not. Either way it took months for me to see any cash

We did require 10% pre-payment for the entire contract prior to beginning work.

So, in short, yes require a pre-payment. Also make it clear who is handling the transfer of funds out of China, who is paying that fee, how the Chinese taxes are being handled, etc. Otherwise the client will expect you to be responsible for all of that and you may find that the work was not, in the end, financially worth doing

[Tanya Olson]

You could try Elance.

I used it for a couple of projects with a somewhat shifty client and it worked pretty well. It was only in the States, but there are tons of freelancers and jobs posted there from all over the world. Its kind of a pain to set up, but the client is required to have at least a portion of the project funds in an escrow. The client is responsible for releasing the funds, but there is some recourse if they are past due.

Maybe they have figured out some ways around the roadblocks Rob described….

[Goustan BODIN]

Thnak you both both dearly for your advice, keep it coming ! 🙂

@Rob :

Thank you for describing the regular process, though I must admit I don’t like too much what I hear (waiting for months ; 17% 🙁 ). I asked my prospective client if they have experience and to tell me how they proceed, while I contacted my friends in China and asked for advice.

@Tanya :

Going through Elance was my first thought, hence the reference to escrow. They take “only” 8% commission + the Paypal commissions… The thing is I’m a bit afraid to reveal to this client an endless pit of mercyless cheap competition… Would I lose my client this way ? Can they proceed this way from China ?

[Goustan BODIN]

I was thinking about something ‘off the tracks’, let’s call it thinking ‘out of the box’ ! 

-> This job they want me to freelance is a planting design test to check my skills prior to hiring me (or so they say). So well, if it works, I’m thinking that I will have to fly there to go for a final interview, check their office, find accommodation and all that.

-> How about I offer them to pay me cash at that moment, and hide the money under my armpits on the way back home ? How unprofessional does that sound ?

🙂

[Rob Halpern]

Why not require that they give you a panda?

[Goustan BODIN]

Hmmm, just what I thought, thanks for putting me back on track 🙂

[Tanya Olson]

Yes. I forgot about that. The client posts the job and anyone can provide a proposal. My experience was that the other people proposing were off the mark as far as what the job entailed and what kind of experience it required…

You are probably right to avoid it if this is key to getting a future job. Not to change the subject, but its looks like you have a good amount of experience working in Asia already. Why are they asking for this ‘test run’? Sounds sketchy to me, but maybe that’s how it works in China.

We’ve heard some on this forum about cultural differences being the basis of misery and misunderstanding for workers and job seekers….(of course in US we think we do it the RIGHT way! HA!) Is your client’s request normal for that culture? What is your common ground for communication and contracting work in Asia? Just curious….

[Goustan BODIN]

I did try my luck on Elance for a couple of months to check it out, and my conclusion is that the competition bring the prices down so low that it’s not worth investing more time into it. (May be others have a different experience, should be an interesting topic for another thread…) So well, Elance is a buyers market. If clients believe they can get the same services or better, for that much cheaper, I believe they won’t try to hire people the ‘traditional way’ anymore.

I also think this situation could be dodgy : I do have planting design credentials. But well, I kinda blotched my portfolio, putting stuff together in 30 minutes, and sent low definition documents, so my planting design ‘genius’ might not be that obvious… As far as I know, this type of ‘test’ is not standard procedure. I’m kind of unsure as to what it means as well, so it’s going to be a pretty usual type of job for a freelancer : give enough to satisfy and raise interest, but not too much lest you give up on your trade secrets. I hate it 🙂

Their company looks brand new, but they have big contracts (well, it’s China…), and the documents I’ve seen were clearly made by an american hand, so I kinda believe they are honest in their search of someone to develop their team. Or they truly master the art of deceit 🙂

About cultural differences : I wouldn’t call it the basis for misunderstanding (we already have that between neighbours or even family members, don’t we), but it surely is an aggravating factor. Times 2. Working with someone from another culture requires more listening ability, forgiveness on details, focusing communication on the most important requirements. It’s both a pain, and a fun way of life, depending on how stressed or fun-loving your are.

I usually don’t sign contracts : pure waste of time.

[Tosh K]

They do work in cash a lot over there – get it in dollars or euros and you should be ok.  Until it becomes a burdensome amount, it seems reasonable.

[Goustan BODIN]

agreed, I’ve seen a few K euros/dollars in cash on the markets in Asia quite a few times. My fees won’t require a suitcase to move the cash around… scotch tape will be fine 🙂

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