Questions

How can a U.S. startup LLC legally employ someone abroad & what are the consequences of that?

I'm starting an LLC here in the U.S. (Texas state) and I want to recruit a couple of engineers who live abroad. They are not planning to migrate to the US, they'll work from home in their respective countries. How do I go about doing that? What's the tax implications? How does payroll work? Etc?

4answers

When I do this I use Elance.com or another similar marketplace. They handle all the logistics and payments through escrow. I've been doing this for years if you want to have a call about it. I have workers all over the world doing different pieces of my businesses and it's quite effective.


Answered 7 years ago

Hi..

If you want to hire people abroad , you have freelancer.com , guru.com , upwork.com , and elance.com . These are the famous ones mainly used by developers and graphic designers ..

If you want something bigger , without a middle man , then you need to have the over seas candidate sign a W-8 form , for your taxes to keep in record . It just shows that this person is not a U.S. Person and he is not liable to US tax payments or deductions .

The above mentioned platforms take care of the tax deductions If people are either in USA or outside.

I've managed multinational distributed teams before. I can help if you need more info.

Good Luck!


Answered 7 years ago

If you're going to hire overseas engineers to perform work for your U.S. based company, you should be mindful of federal and state laws, as well as the laws of the foreign country where your engineers live and work. First, determine whether you want these individuals to be employees of your company, or merely serve as subcontractors hired to complete specific tasks. Generally, the subcontract relationship is easier from a compliance, reporting and tax perspective. When hiring a non-U.S. contractor, the contractor completes an IRS withholding certificate in order to verify the individual or company is not a U.S. tax resident. Foreign individuals sign a Form W-8BEN, a foreign corporation would complete W-8BEN-E, while a foreign partnership would complete a Form W-8IMY. So long as the foreign contractor is performing the work outside of the U.S., there should not be any U.S. tax withholding issues. It can become complicated if, on occasion, you have the developers travel to the U.S. to perform work. The nonemployee compensation could be considered U.S. source earnings and subject to federal and state taxes in the U.S.


Answered 4 years ago

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