> if you're outside of the US, set up a local LLC so that US-based companies can treat you like an independent contracting business. That'll make it much easier to hire you across borders. And at that price, you can surely afford the $1000 annually for a tax advisor retainer.
In my experience you shouldn't need to do this. In fact, I suspect doing this creates both a taxation and legal nightmare.
You should have a registered company (or any other trading entity) so you can bill as an independent contractor. However, it should be registered in your country of residence. Services like Deel exist specifically to facilitate this sort of arrangement, it's a breeze.
If you register a company in the US, you can't just arbitrarily transfer the money to yourself internationally. You'd need to pay yourself as an international independent contractor anyway. Except then you create legal issues, since there are likely legal issues with a company you run hiring another company you run. Additionally, by operating two companies, you're presumably filing two company tax returns, and paying yearly registration fees for two companies.
> In my experience you shouldn't need to do this. In fact, I suspect doing this creates both a taxation and legal nightmare.
Have worked with both arrangements. Much easier to deal with a US based LLC than anything that is managing payroll. For the contractor the LLC arrangement may end up being better, too because at least in the US corporations pay tax in arrears, and individuals have money withheld in advance.
> Except then you create legal issues, since there are likely legal issues with a company you run hiring another company you run.
For a simple business, this is actually simple (at least the US part of it). Revenue - Cost yields a very modest profit in the US so there's probably not going to be a lot of tax liability. Not sure what the nightmare is. For the group I used, their books were super simple in the US, and equally simple at home.
It’s simple to play invoices to foreign consultants. I’ve been working for American clients for years, I’d never register anything in the US and have to deal with US authorities.
If you are providing services online which programming is while being a non resident alien through your LLC you are owning 0% taxes to the USA. There are nuances and you should check with proper tax advisors, but that is how it should work.
This is the same in most countries i.e. income = expenses means no profit and therefore no tax.
However, you need to pay tax in your country of residence still. You also need to file with the IRS for the corp indicating zero profit. Plus US registration fees.
You also need to maintain a legal paper trail i.e. the money coming into the US corp needs to be paid out to an international company anyway.
Yeah, there is overhead, and of-course that you need to pay taxes where you are a tax resident. But, if that overhead enables you to charge much more than it is worth it.
I've got stock option to my LLC from one startup recently. It was much much easier than figuring how to do that for one person in other part of the world.
In my experience you shouldn't need to do this. In fact, I suspect doing this creates both a taxation and legal nightmare.
You should have a registered company (or any other trading entity) so you can bill as an independent contractor. However, it should be registered in your country of residence. Services like Deel exist specifically to facilitate this sort of arrangement, it's a breeze.
If you register a company in the US, you can't just arbitrarily transfer the money to yourself internationally. You'd need to pay yourself as an international independent contractor anyway. Except then you create legal issues, since there are likely legal issues with a company you run hiring another company you run. Additionally, by operating two companies, you're presumably filing two company tax returns, and paying yearly registration fees for two companies.