4 ms·
What are the legal risks for a US company to hire a foreign contractor in a model that is more like of a full time employee? I am the foreign contractor in thi
by soneca 5y ago
What are the legal risks for a US company to hire a foreign contractor in a model that is more like of a full time employee?
I am the foreign contractor in this situation and I like it. I wish many more companies would hire this way, since a real FTE would require the company to establish a presence in my country (which will never happen).
I understand the risks of hiring as contractor with an employee-like agreement if I was in the US. But I am not. So what are the risks then?
- proberts 5y agoSo that I understand, do you mean being based outside the US but being employed by a US company as an employee or contractor?
- mettamage 5y agoIf it is the same case that I want to be in them I think he/she means: * He/she is employed by a US company as a contractor and works remotely * He/she is not a US citizen and lives outside the US * In the day to day work and team culture, there seems to be no difference between employees and contractors
- proberts 5y agoThanks. Then this isn't really a US immigration issue since this person will be working remotely/outside the US but more of an employment law/tax law question.
- soneca 5y agoExactly as mettamage said, so yes, more of an employment/tax law question. Anyone on YC to do a AMA on that? :)
- lhorie 5y agoThe way I've done this in the past is by registering a company in my home country and billing through that. For the company procuring your services, it's no different than paying for a service like AWS. The company you registered is responsible for paying applicable service taxes for rendered services as well as payroll taxes and other contributions as required by law on behalf of the employee, aka your physical person. Basically the benefit to the client company is that it lifts the burden of employment/taxation questions from them. The benefit for you is that since you now own a proper company, you have more tools to manage your finances, for example your company could conceivably pay for office expenses, effectively making those purchases pre-tax (as opposed to paying yourself the equivalent amount and being subject to income tax deductions).
- soneca 5y agoYep, that’s exactly what I am doing, for all the reasons you said.
- dotBen 5y agoYou can also explore PEO's which are organizations set up specifically do this. For single or small number of impacted workers in a given country, a PEO might be the better route than establishing your own company. https://en.wikipedia.org/wiki/Professional_employer_organization https://en.wikipedia.org/wiki/Professional_employer_organiza...
- morpheuskafka 5y agoIt would ultimately be more of a question of the laws of your country. From the US's perspective, even if you were an employee, it would be foreign source income as long as you remain outside of the US so they aren't going to gain any taxes if you were considered an employee.
- soneca 5y agoThanks, makes sense. On my side is all good. I formed a company to export services. But that’s why I wonder why more companies don’t do this
- onn_h1b1 5y agoWhat did paperwork did you have to do to form a company to export services? Is it possible to just export services as a sole proprietor without forming a company?
- soneca 5y agoI think it depends on your country. Also I am not sure how well legal terms translate. I am in Brazil, so I created what I would call a ”sole proprietor company” that can export services.