---
title: "Converting an overseas contractor: what you must prove"
description: "Converting a long-standing overseas contractor? Ask who the legal employer is, then get the registration, contract chain and payroll evidence in writing."
canonical: https://www.teamed.global/insights/defence-contractors-converting-an-overseas-contractor
datePublished: 2026-09-15T12:00:00.000Z
---

Last updated: 15 September 2026

You can convert a long-standing overseas contractor into an employee through an employer of record. If your own rules do not allow grey areas, the thing to focus on is evidence. Ask who the legal employer will be. Then ask for the papers that prove it. There are about eight documents worth collecting, and a provider who runs a clean process will have them ready.

This page sets out what a compliance team usually wants to see, and the questions to put to a provider before you sign. It is about proof, not reassurance. A provider saying that it is compliant is not evidence. A registration number you can check, a contract you can read and a payroll report you can reconcile are.

None of this is legal advice, and it does not tell you how any rule applies to your company. Your own contracts and regulators decide that. What follows is the paper trail that lets your legal and procurement teams answer their own questions.

A situation we see

A mid-market company that supplies regulated government programmes has an entity in the Netherlands. One person who has worked with it for years is based in Germany, on a contractor agreement. The company wants that person to become an employee. Its own rules do not allow anything that looks like a workaround, so it needs to show how the arrangement works, not just be told that it is fine.

## Why does converting a contractor raise a question?

Because a long-standing contractor often looks like an employee on the facts. Someone who has worked with one company for years, to its hours, on its systems and under its direction, may already meet the local test for employment. The label on the agreement matters less than how the work is really done. That gap is what people mean by [misclassification](/insights/employee-misclassification-independent-contractor-or-employee).

Most countries decide this on substance, not paperwork. Courts and tax offices look at control, at how deeply the person is built into the business, at who carries the money risk, and at whether the person can send someone else instead. The longer the arrangement has run, the more it tends to look like a job. Seniority pushes it the same way.

Converting the person usually closes that question rather than opening a new one. But the change creates a fresh set of facts: a new employer, a new contract, a start date and a payroll trail. A compliance team will want to see each of those in writing before the change, not after it.

## Who is the legal employer, and what can you show?

The legal employer is the company named on the employment contract and registered locally to run payroll. Under an [employer of record](/employer-of-record) arrangement that is the provider's local entity. It is not you, and it should not be an offshore holding company. Ask for the full legal name and the registration number, in writing, before you sign.

Then check it yourself. Most countries publish a company register you can search, and in the European Union the registers are linked through the [European e-Justice Portal](https://e-justice.europa.eu/489/EN/business_registers__search_for_a_company_in_the_eu). A few minutes there tells you whether the entity exists, where it sits and how long it has been trading. If a provider will not name the entity, that is your answer.

Ask about the chain as well. Some providers employ people through a partner company rather than their own entity. That is not always a problem, but you should know about it, know who the partner is, and see the contract that links them. Our [guide to contractor conversion](/insights/contractor-to-employee-conversion-compliance-guide) covers the mechanics of the switch itself.

## What should a compliance team ask for?

Ask for documents, not descriptions. Each item below has a reason behind it, and a provider used to regulated buyers will have seen the list before. If an item does not apply in a country, the honest answer is to say so and explain why. Sending something that looks close enough is worse than sending nothing.

Put the list in your due diligence pack and keep the replies. Your auditors, and your own customers, may ask the same questions in a year. By then the person who ran the process may have moved on. Filed answers with dates on them beat the memory of a good call.

| What to ask for | Why it matters |
| --- | --- |
| Legal employer | Names the company that carries the employer duties, so you know who is on the hook. |
| Entity registration | A number you can look up on a public register, which turns a claim into a fact. |
| Contract chain | Shows whether a partner company sits in the middle, and on what terms. |
| Payroll evidence | Payslips, filings and remittance records prove the pay and deductions really happened. |
| Data processing | Sets out who handles employee data, on what basis, and which other firms touch it. |
| Insurance | Confirms what cover is in place, who arranges it, and whether work travel is included. |
| Audit or reporting rights | Agrees now what you may ask to see later, which is hard to add once payroll is live. |
| Termination | Sets out notice, process and cost before you need them, when nobody is under pressure. |

Two of these are easy to skip and costly to miss. Insurance is the first: ask what cover the employee has, who buys it, and whether it follows them when they travel for work. Audit rights are the second, so settle them while you still have room to negotiate.

## Where do government contract duties sit?

With you. If your customer contracts carry flow-down clauses, or if your work touches export-control rules, those duties belong to your company. They are set by the contract you signed. Employing someone through a provider does not move them, shrink them or meet them. It changes who runs the payroll in that country, and nothing else.

So read the contract itself rather than a summary of it. Whether a regime such as export control applies to a role in another country, and what it then requires, is your own duty to check. That is a question for your legal counsel and your contracting officer. Do not take a provider's view on it, and do not expect one.

A provider can still help with the practical side. It can tell you which entity employs the person, where payroll sits, who can see which data, and what is stored where. Those facts feed your own assessment. They do not stand in for it.

## Does the person's own status matter?

Yes. The right to work is decided by where the person lives and what status they hold there. It is not decided by where your company is based, or where the provider is registered. Someone living in Germany needs the right to work in Germany. That holds whether they are a contractor today or an employee next month.

Ask the provider how it checks this, what papers it collects, and what happens if the person moves country later. Keep the questions about the role. Where the answer turns on one person's own circumstances, that belongs in a conversation rather than on a web page. Country rules differ a lot, as our [Germany hiring guide](/country-hiring-guides/germany) shows.

## What should be in the agreement?

Three things, at least. The employment contract must be local, in the right language, and must meet the minimum terms that country sets. The service agreement between you and the provider must say who does what, how changes get agreed, and what happens when something goes wrong. The data terms must name every party that will handle employee information.

Have your own lawyers read both documents before you sign. Ask early whether the provider accepts changes, because some do not. It is better to learn that in week one than after your legal team has spent a month marking up a contract that was never going to move.

Agree the exit too. Termination rules are local and can be slow, so you want the notice position, the process and the cost settled before you need them. The same goes for the end of the commercial relationship. Know how you get your records back, and in what form.

## Frequently asked questions

### Can we convert a contractor who has worked with us for years?

Usually yes, and it often lowers risk rather than adding to it. What matters is how the change is written down: the end of the old agreement, the new contract, the start date and the payroll record. Take advice on your own case before you move.

### Does an employer of record remove our own duties?

No. It changes who is the legal employer and who runs payroll in that country. Duties that sit in your customer contracts, including any flow-down clauses, stay with you. Check them against the contract you signed.

### What is the most useful question to ask a provider?

Which legal entity will employ this person, and what is its registration number? Almost everything else follows from the answer. If you cannot get it in writing, stop there.

The right answer depends on the country, the role and the contract you work under. Teamed can show your compliance team the entity, the contract chain and the payroll evidence behind a conversion. A designated person will manage your account, and you can reach HR and legal experts within 24 hours. [Talk to an Expert](/contact?source=insights-defence-contractors-converting-an-overseas-contractor) at Teamed to work through your own case.