Table of Contents

• Two trades, two piles of papers
• The services contract (the one you're missing even if "the client is trustworthy")

  • 1. Who hires whom
  • 2. What's delivered, and what's not
  • 3. Money, advance and what happens if not paid
  • 4. Who owns what you produce
  • 5. Confidentiality, with limits
  • 6. How to end the contract
  • 7. Liability: the ceiling almost no one puts
  • 8. Applicable law and where to fight
• The risk most people ignore: being treated as an employee
• If you're no longer alone: the partners pact before the logo
• Formalize the company: choose by the problem, not by the fashion
• What you can do and what you shouldn't
• Checklist before starting the next project
• Frequently asked questions

  • Can I work just with WhatsApp and an invoice?
  • Does an internet template work for any LATAM country?
  • The client sent "their" contract. Should I sign it?
  • Do I need a society to freelance?
  • Does the partners pact get signed before or after constituting the company?

Two trades, two piles of papers

The most common mistake is treating "the legal" as one thing. It's not.

If you invoice your time or your craft to clients, your main risk is in the services contract: scope, payment, ownership of what you deliver and that nobody reclassifies you as an employee.

If you're building a company with other people, your main risk is inside: who owns what, what happens if someone leaves, and under whose name the code, the brand and the customers stay.

You can be in both worlds at the same time —many startups start by invoicing as a physical person while the product exists only in a repo—. In that case you don't choose one pile: you need both.

The services contract (the one you're missing even if "the client is trustworthy")

In almost all LATAM this document is called services contract or services hire. It's not an employment contract. That matters, and we'll see why below.

You don't need it to have twenty pages. You need it not to leave up in the air the eight things people end up fighting over.

1. Who hires whom

Legal name, domicile and, if applicable, RFC / NIT / CUIT / RUT. It sounds bureaucratic until you need to issue an invoice or claim payment and the "client" turns out to be a different person from the company that wrote to you.

If the client is foreign, also note the country and whether you'll be invoicing a society or an individual. How you collect in dollars is another problem —platforms, commissions, exchange rate—; here just leave recorded who owes you the money.

2. What's delivered, and what's not

Poorly written scope is the factory of free work. "Making the web" is not a scope. "Designing and implementing the 8-page site agreed in Annex A, in WordPress, with a contact form and loading the texts the client provides" is.

A good scope has three pieces:

• Concrete deliverables, not intentions.
• What's left out. If you don't write it, the client assumes it's included.
• How changes are requested. An extra is not a favor: it's a change order with price and date.

If the project is large, the contract can be framework and the detail live in a work order or statement of work per project. That lets you repeat clients without rewriting everything each time.

3. Money, advance and what happens if not paid

Define currency, amount, calendar and payment method. In LATAM, three practical rules avoid most scares:

• Advance before starting. 30–50% is customary for professional services. If the client can't pay the advance, they probably won't pay the closure either.
• Milestones tied to deliverables, not "end of month". The payment calendar follows the work, not the humor of the finance area.
• Right to pause if there's an overdue invoice. Without this clause, you keep working for someone who has already decided not to pay you.

The late payment surcharge is useful, but less than the right to stop work. Collect before continuing, not after getting angry.

4. Who owns what you produce

If you don't say it, in several countries the intellectual property of a work-for-hire doesn't transfer automatically. The client thinks they paid for "the brand" or "the code"; you, strictly speaking, might still be the owner.

The healthy practice is explicit:

• The client keeps the deliverables when they're paid.
• You keep tools, templates, libraries and prior know-how.
• If you use third-party components (a WordPress theme, an open source library, an AI model), you declare it. You can't transfer what doesn't belong to you.

Until the last milestone is paid, the transfer doesn't operate. That's your leverage if the client delays: it's not blackmail, it's the deal.

5. Confidentiality, with limits

An NDA or a confidentiality clause protects briefs, accesses, numbers and client lists. It should also protect you: your rate, your method and the names of your other clients are not dissemination material on the other side.

Set a deadline (two or three years usually suffices for commercial info; technical secrets can live longer) and obvious exceptions: what was already public, what you're asked for by law, what you developed before this project.

6. How to end the contract

Projects don't always end as planned. Define:

• Minimum notice to end without cause (15 or 30 days is reasonable).
• What's paid if they cut midway: work already done, plus committed expenses.
• What you hand over on exit: files, accesses, passwords. And what you stop delivering if there are overdue invoices.

Without an exit clause, any cut becomes an emotional negotiation. With it, it's an account.

7. Liability: the ceiling almost no one puts

If an error of yours costs the client "everything they imagine", you're signing infinite risk for a four-figure project. Limit your liability to the amount billed in the last months of the contract, exclude indirect damages (lost profit, "lost opportunities") and leave out cases of fraud or fraud —those can't be covered with a clause.

8. Applicable law and where to fight

If you're in Medellín and the client in Madrid or Austin, "the contract is governed by the laws of…" isn't a footer detail. Define country, contract language and if mediation comes first. A transfronterizo lawsuit over a $2,000 invoice nobody will fight: that's why the contract has to make it unnecessary to get there.

The risk most people ignore: being treated as an employee

In Mexico, Colombia, Argentina, Chile and good part of the region, the document name doesn't define the relationship. If a judge or inspector sees subordination, schedule, exclusivity, client's tools and a single "contractor" directing your day, they can reclassify the relationship as employment. It doesn't matter that the PDF says "freelance".

This hurts both parties. The client might face a claim for benefits, social security and fines. You might lose the independence you were selling —and if you bill a single client 90% of the year, you're building exactly the profile an inspector looks for.

Signs the arrangement looks too much like an employment:

• They impose schedule, vacations and a direct "boss".
• You work with their email, their laptop and under their org chart.
• You have de facto exclusivity, even if the contract doesn't name it.
• The contract auto-renews, without a project with beginning and end.

If you're on the hiring side, don't "save" social charges by disguising a regular job. If you're on the billing side, diversify clients and leave in writing that you organize your own work. A well-structured contract helps; the reality of how the parties work weighs more.

If you're no longer alone: the partners pact before the logo

Two excited people with an idea don't need a term sheet. They need a partners pact (or founders' agreement) before there's money, brand or users. The moment when "we still love each other" is the only one in which this document is signed in peace.

A useful pact answers, in writing, questions that later become expensive:

Who owns what, and since when. 50/50 on day one, without vesting, is a classic trap: at six months one goes to a job and takes half a company the other is building. The industry standard —not a law— is vesting over 4 years with a 1-year cliff: the first year nothing consolidates; then, month by month. Adjust to your reality, but don't give away equity just for being on a Zoom call.

What each one contributes. Time, capital, network, code, brand. If one puts money and the other puts hours, the 50/50 "because we're friends" usually is a postponed fight.

What happens if someone leaves. Good exit, bad exit, death, incapacity. Who can buy the shares, at what value, in how much time. Without this, the one who leaves remains an owner and the one who stays can't raise capital or sell.

Who decides what. Unanimity for the existential (sell the company, incur debt, dilute). Majority or a clear role (CEO) for day-to-day. 50/50 without a tiebreaker is a permanent tie.

Whose prior work is it. The repo one of you already had, the brand your cousin registered, the clients you brought from your previous job: either they're transferred to the society, or they're not. Investors will ask this. Better if the answer isn't "we think it's everyone's".

The pact doesn't replace constituting the society. It anticipates it. When the time comes to set up the company, these rules should migrate to the statutes or a shareholders agreement.

Formalize the company: choose by the problem, not by the fashion

"SAS, SRL, SpA or physical person?" doesn't have a Latin answer. Mexico, Colombia, Chile or Argentina don't share the same menu, same costs, or same restrictions of the current year. The useful question isn't "what's the fashionable society", but what problem are you solving:

• Separate your heritage from the company's. If a client sues you, can they reach your home? That's the reason for being of a limited liability society, with whatever name your country uses.
• Add partners and investors. Some forms make this trivial; others turn it into a notary novel.
• Bill large companies or the State. Many won't pay you if you're not formalized.
• Hire people properly. The "we all invoice as monotributors / RESICO / simple regime" ends the day someone asks for vacation or has an accident.

Until you have partners, employees or a real patrimonial risk, operating as a physical person (with your local regime in order) is usually cheaper and reversible. Formalizing "just in case" also is a cost: accountant, filings, bank account, compliance. Do it when the cost of not doing it is greater.

What's truly urgent, with or without a society: that what you produce for the project is under the correct names. A product whose code still sits in the personal account of a cofounder who left is not a product. It's a hostage.

What you can do and what you shouldn't

There's a big difference between "I don't have a lawyer" and "I signed what the client sent first".

You can (and should) do:

• Negotiate scope, advance and payment calendar before opening Figma or the editor.
• Ask that IP transfer be tied to payment.
• Reject exclusivity, no competition eterna and unlimited liability.
• Write the partners pact in clear language, even if later a lawyer formats it locally.
• Save every signed version (yes, a digitally signed PDF or an email saying "agreed with this document" is better than a WhatsApp chat).

It's worth paying a local lawyer when:

• The client's contract has more than ten pages or comes from another country.
• You're going to transfer equity, raise investment or bring in an industrial partner.
• A single client represents almost all your income and asks for exclusivity or "integrate into the team".
• There's a brand, patent, personal sensitive data or a regulated sector (health, finance, minors).
• There's already a conflict. Don't improvise: document and consult.

A lawyer from your city who litigates or structures in your court is worth more than any "valid for LATAM" template. Latin America is not one jurisdiction.

Checklist before starting the next project

• There's a contract (or a work order) with legal name of both parties.
• The scope lists deliverables and, explicitly, what's not included.
• There's an advance, milestones and right to pause if not paid.
• IP is transferred upon payment, and your prior tools are kept outside.
• Reciprocal confidentiality, with a deadline.
• Termination clause and liability ceiling.
• Day-to-day doesn't look like a disguised employment.
• If there are cofounders: partners pact with equity, vesting and exit rules.
• Code, brand and accounts don't live in a single person's personal email.

If you check less than half, you don't have a "light process". You have legal debt. It costs more to pay later.

Frequently asked questions

Can I work just with WhatsApp and an invoice?

You can, and many people do for small projects with known clients. The problem isn't the channel: it's that WhatsApp doesn't define scope, IP or what happens if they cut. Use it to coordinate. Don't use it as a contract.

Does an internet template work for any LATAM country?

As a starting point, sometimes. As a final document, almost never. Labor, fiscal and IP aren't the same in Mexico City and Buenos Aires. If the amount or risk matters, adapt with someone from your jurisdiction.

The client sent "their" contract. Should I sign it?

Read it as if someone who doesn't want you to wrote it. Look for: IP transfer before payment, exclusivity, non-competition of years, unlimited liability, and the phrase "employment relationship" hidden or, opposite, a freelance disguise over an employee position. Strike through, propose, and if they don't accept anything, the price should go up —or you should say no.

Do I need a society to freelance?

No. You need to be in order with your country's tax authority and have a contract that protects you. The society appears when there are partners, employees, a patrimonial risk you don't want to assume in your name, or clients who don't pay physical persons.

Does the partners pact get signed before or after constituting the company?

Before, if you're already working together. After, your rules should be reflected in statutes or a shareholders agreement. Waiting to "when it's official" is exactly how you end up fighting over a product that still doesn't bill.