There are pros and cons to both (being an employee vs. contractor).
Contractor:
- Can save a huge amount of money in taxes (or in more harsh words, gets to evade taxes).
- Can be working for more than one company as a contractor provided that a contract is loose enough to allow you to do so.
- Can switch jobs easily as there aren't tight notice period rules following a resignation.
Employee:
- It is legally easier to prove that you have a job in cases like taking a loan, getting a tourist/temporary work visa.
- You're protected by labour laws (and benefits) as applicable in the country.
- You cannot evade taxes using loopholes, only can save taxes as per provisions.
Personally, only downside I see working as an employee vs. as a contractor is taxes.