Magazine article HRMagazine

Can a U.S. Employer Hire Someone Living in Another Country as an Independent Contractor?

Magazine article HRMagazine

Can a U.S. Employer Hire Someone Living in Another Country as an Independent Contractor?

Article excerpt

Possibly, but misclassification of workers as independent contractors can be costly, so don't assume you can pay someone living in another country to work for you in that country without establishing an employment relationship. Even if the individual is accurately classified as selfemployed, taxes and fees may be due in other countries. Ask legal counsel with global experience to review each country's requirements.

While rules vary, there are some common elements. Only a few countries have income reporting requirements like the U.S. 1099 form. But many countries charge an income tax or "service fee" to be withheld by the employer and paid to the country in which the work is being performed.

Some countries won't allow contractors to work for employers that don't have a local presence in that country. If you don't have such a presence, local regulators may regard your workers as "employees," and your business may be accused of operating without proper filings and permits.

Some countries require self-employed individuals to register as sole proprietors. …

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