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Freelancing and Independent Contracting

Understand the distinctions and regulations for freelancers in Greenland

Difference employees and contractors

In Greenland, an autonomous territory within the Kingdom of Denmark, distinguishing between employees and independent contractors is crucial as it impacts rights, benefits, and obligations for both parties. However, Greenland lacks a single, codified legal test for this distinction.

The Control Test (Danish Influence)

Greenland's legal framework is heavily influenced by Danish labor law. Courts in Greenland often rely on the control test established in Danish case law. This test evaluates the level of control an employer exerts over the worker.


An employer has the right to control various aspects of an employee's work, including:

  • Method and manner of work performance (e.g., specific tools, work hours)
  • Integration into the business (performing core functions of the business)
  • Provision of equipment and materials

Independent Contractor

An independent contractor has more autonomy and control over their work, with the employer primarily concerned with the end result rather than the specific methods used to achieve it.

Additional Factors

Beyond control, courts might consider other factors when evaluating worker classification:

  • Economic Dependence: Does the worker rely on the employer for a significant portion of their income?
  • Investment: Does the worker invest their own resources (equipment, tools) in performing the work?
  • Opportunity for Profit or Loss: Can the worker take on additional clients or projects, or are they limited to working solely for the employer?

Importance of Classification

Correct classification is crucial for both employers and contractors:

  • Employers: Misclassifying an employee as a contractor can lead to liabilities for unpaid wages, social security contributions, and other benefits.
  • Contractors: Being wrongly classified as an employee can deny them tax benefits associated with running their own business and limit their control over their work.

Independent contracting

Greenland's stunning landscapes and expanding economy provide opportunities for skilled individuals looking for freelance work. However, to navigate this path, it's crucial to understand contract structures, negotiation practices, and the prevalent industries for independent contractors.

Contract Structures

A well-defined contract is essential for independent contractors in Greenland. Here are some common structures to consider:

  • Fixed-price contracts: These contracts set a pre-determined fee for the entire project, regardless of the time taken to complete it. This structure encourages efficiency for the contractor but can be risky if unexpected challenges arise.
  • Time-based contracts: These contracts establish a rate per hour, day, or week for the contractor's services. This approach offers flexibility in project duration but necessitates clear timekeeping records.
  • Performance-based contracts: Payment depends on achieving specific milestones or deliverables outlined in the agreement. This structure can incentivize quality work but requires clearly defined performance metrics.

The most suitable contract structure depends on the project scope, risk tolerance, and desired payment terms for both parties.

Negotiation Practices

Effective negotiation is key to securing favorable terms as an independent contractor:

  • Clearly define deliverables and timelines: Set clear expectations for the project scope, timeframe, and expected outcomes to avoid misunderstandings.
  • Negotiate fees: Research industry standards for similar services, considering any geographic adjustments for Greenland. Negotiate a fair rate that reflects your expertise and experience.
  • Payment terms: Establish clear payment schedules, including milestone payments if applicable, and secure a reliable payment method. Consider potential currency exchange fluctuations if working with international clients.
  • Termination clauses: Outline the terms under which either party can terminate the contract and any associated fees or penalties.

Common Industries for Independent Contractors

Independent contracting opportunities exist in various sectors of Greenland's economy:

  • Construction: Skilled laborers like carpenters, electricians, and plumbers can find freelance work on construction projects, particularly in developing areas.
  • Tourism: Tour guides, freelance translators, and outdoor activity specialists can leverage their expertise during Greenland's tourism season.
  • Translation and Interpretation: With Greenlandic, Danish, and English holding significance, translation and interpretation services are in demand across various sectors.
  • Information Technology (IT): While the IT sector is relatively young in Greenland, there's a growing need for freelance web developers, IT support specialists, and software engineers.

The rise of the gig economy offers potential for freelancers in Greenland, but the limited population size may require looking beyond local opportunities for some industries.

Intellectual property rights

Intellectual property (IP) rights are a crucial aspect for freelancers in Greenland. The country's copyright law, based on the Danish Copyright Act No. 395 of June 26, 2001, generally grants ownership of original creative works to the author (freelancer) by default. This applies to various outputs, including written works, artistic creations, and software code. This legal framework empowers freelancers as the initial rights holder, allowing them to control how their work is used.

Default Ownership

Ownership of original creative works is granted to the author (freelancer) by default under Greenland's copyright law. This applies to a variety of outputs:

  • Written works (articles, reports, scripts)
  • Artistic creations (illustrations, photographs, designs)
  • Software code

Contractual Agreements

Freelance contracts play a significant role in shaping IP ownership in Greenland. Both parties can deviate from the default ownership rule through a written agreement:

  • Ownership transfer: If the client desires ownership of the freelancer's work, the contract should include a clause explicitly transferring copyright ownership. This should specify the scope of transferred rights (exclusive or non-exclusive).
  • Usage rights: Even if the client doesn't own the copyright, the contract can grant them specific usage rights. This might include the right to reproduce, distribute, or modify the work for a particular purpose.
  • Moral rights: Even when transferring copyright ownership, Greenlandic law typically allows freelancers to retain certain moral rights, such as the right to be identified as the author.

Additional Considerations

Freelancers should also consider the following:

  • Pre-existing work: If a freelancer uses pre-existing copyrighted material (e.g., stock photos), they need to ensure they have the proper licenses to use such material in the final product delivered to the client.
  • Work made for hire: Greenlandic law incorporates the concept of "work made for hire" from Danish law. In specific situations, a work might be classified as "made for hire" if it meets certain criteria outlined in the law. Under such circumstances, ownership might automatically transfer to the commissioning party.
  • Confidentiality: Freelancers often handle confidential information belonging to their clients. Non-disclosure agreements (NDAs) are crucial tools to protect such information and prevent its unauthorized disclosure.

Tax and insurance

Freelancing in Greenland comes with its own set of tax and insurance responsibilities. As a freelancer, you are responsible for managing your own taxes. This includes income tax, which is paid on net profits (income minus deductible business expenses) according to a progressive tax scale outlined in the Income Tax Act (Inkomstskatteloven). Rates range from 0% to 42%, depending on your annual income level.

Unlike salaried employees, freelancers are not automatically enrolled in social security. However, they can voluntarily contribute to the Social Insurance Scheme (SIK) for benefits like pension and healthcare coverage. If you're earning above a specific threshold (currently DKK 30,000 per annum), you're required to register with the Tax Administration of Greenland and obtain a tax ID number (CPR number). It's highly recommended to consult a tax advisor familiar with freelance taxation to ensure compliance with Greenland's tax laws.

Insurance Options for Freelancers

As a freelancer, you have more flexibility with insurance options. Public health insurance is available through SIK, but you can also choose private health insurance for potentially broader coverage. Contributing to SIK is voluntary for freelancers, but opting for a private pension plan is another way to build retirement savings. Depending on your needs, you can consider additional insurances like professional indemnity insurance or business interruption insurance.

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