Employing a Foreigner Independent Contractors

If my company is hiring a foreigner as an independent contractor (hereinafter "IC") to do projects, do my company send a 1099-MISC to the foreigner IC at the end-of-the-year, if the foreigner IC is compensated for $600 or more? *ADDITIONAL INFORMATION: The foreigner IC will be working with there own equipment and in there own country. All rights for projects will be my property of my company*

Saginaw, MI -

Attorney Answers (3)

David Samuel Willig

David Samuel Willig

Business Attorney - Miami, FL
Answered

You might want to give consideration, too, to the legal interpretation of this arrangement in the country where the work will be performed.

Robb Adam Longman

Robb Adam Longman

Tax Lawyer - Bethesda, MD
Answered

Yes, there are also other forms the foreigner must fill out to indicate that US taxes do not need to be withheld. http://www.irs.gov/Businesses/Small-Businesses-...

See this link.

This answer is based on general legal principles only and is not intended to provide specific legal advice. This... more
Shaunak Hitesh Sayta

Shaunak Hitesh Sayta

Tax Lawyer - San Francisco, CA
Answered

Few thoughts;

1. Does your contract have an arbitration clause, in case the contractor does not give you the IP rights or later tries to dispute ownership of the IP rights ?
2. Which country is this ? Some countries where the US does not have foreign relations or has cut off relations are very complicated to do business in. (for eg. Cuba)
3. If there is IP being generated - you should have a separate IP agreement, with a US choice of law clause, and a US based enforcement mechanism. Most countries that are signatories to the NY Convention recognize that IP rights are non-arbitrable - accordingly, it always helps to have separate agreements.

Of course, it comes down to how much money is involved - I would suggest that if you have more than $50000 (value of the IP) at stake - hire a lawyer. Not only does it ensure that everything goes smoothly - it also hedges your risk.

IRS CIRCULAR 230 DISCLOSURE: To comply with requirements imposed by the Department of the  Treasury,  we  inform ... more

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