In Summary: The U.S. Labor Department, the IRS, the SBA, and U.S. Immigration lawyers all say it is legal for a U.S. company (or any U.S. employer) to hire foreigners living outside of the U.S. as remote or telecommute workers.
What taxes are a resident alien subject to for work performed outside the United States?
Wages paid to U.S. citizens and resident aliens employed outside the United States are generally subject to Social Security and Medicare tax if the employer is an American employer.
Do you have to pay US income tax if you live abroad?
If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.
What happens if you own 50% of a foreign corporation?
Generally, if you, along with other US persons, own more than 50% of a foreign corporation, it is considered a CFC. In the case of a CFC, certain types of income are treated as Subpart F income that flows through to the US shareholders and is taxed on the shareholders’ personal returns as ordinary income.
Can a US citizen set up a foreign corporation?
Part of the reason for the absence of any tax requirements is that many individuals set up foreign corporations for reasons other than their tax benefits. Yes, you can get tax benefits from a foreign corporation if structured properly, but if you are a full-time US resident living in the United States, those tax benefits will not apply to you.
Can a US company hire a foreigner living in another country?
Senior Remote Content Writer with 12+ years of experience writing about U.S. laws, real estate, marketing, business, and SEO with over 40 Google Featured Snippets. Last edited in 2021. Many U.S. companies and other U.S. employers assume they cannot hire a foreigner living in another country. That is wrong!
