Contracting in the USA

[phil5476]

@jamesbrown Thanks for the information. Very useful. There are c.60 visa types. As my client has sent a contractor before on a similar mission I believe it possible. This was some time ago and I am struggling to ascertain how they did it as that person has moved on.

I appreciate the IRS issue however I have some options there. Particularly as the agency through which I invoice has a U.S. arm. However one step at a time, I need the visa option obviously.

[jamesbrown]

I asked for some legal advice which is as follows (gutted!):

Further to my email of the 12th (attached) –


1. There is no minimum number of days – if an individual is ‘working’ in the US they need a work permit. However, if they are there for a business trip (only for training and meetings) as part of working elsewhere there is a 90 day visa waiver option for UK nationals. Please note that although this is a waiver there is still an application process required with the US consulate;

2. If he is working in the US he will be liable to tax in the US from the first day. As the work permit requires a US sponsor they would be the employer and as such he would operate under the US equivalent of PAYE (W2). Under the Double Tax Agreement between the UK and USA and individual paying tax in the US would be able to claim this as a credit against their UK tax liabilities on the same income should they remain tax resident in the UK;

3. In order for the arrangement as original explained to be legal the individual needs a work permit (H-1B). However, as mentioned earlier the quota for 2015 is already full. I have contacted two other sources regarding any other options and as expected there aren’t any.



The key problem we have is US immigration.



Alternatives:

1. Contractor remains based in the UK with periodic business trips for meetings/training only;

2. Alternative contractor is sought with a nationality that fits within the other visa options (ideally Australian or Canadian) or is a US national or Greencard holder.


I’m sorry if this doesn’t sound very flexible but US immigration isn’t.

The above is essentially correct, but there's some misleading or at least incomplete information too. There's no real application process for the VWP insofar as this is all online now, takes a few minutes, and lasts for two years (ESTA), but it's only applicable if you meet the requirements. You can attend business meetings, receive training, give presentations to workshops/conferences, and take part in other types of non-productive work, but you cannot deliver training or do productive work (e.g. sit at a desk, working on your computer). In terms of work visas, there are actually many different types of visa. An H1-B is a common route for technical specialists. It's worth noting that, while there is a cap and this disappears very quickly every year, some organisations are exempt from the cap, such as universities and Gov't facilities.

Also, while a key problem is indeed USCIS, another key problem (were this to be possible, hypothetically) would be the IRS. It would be a nightmare to retain a controlling interest in a foreign business in terms of IRS reporting requirements.

[cojak]

Well there's a surprise... :rolleyes

[phil5476]

Legal Opinion

I asked for some legal advice which is as follows (gutted!):

Further to my email of the 12th (attached) –


1. There is no minimum number of days – if an individual is ‘working’ in the US they need a work permit. However, if they are there for a business trip (only for training and meetings) as part of working elsewhere there is a 90 day visa waiver option for UK nationals. Please note that although this is a waiver there is still an application process required with the US consulate;

2. If he is working in the US he will be liable to tax in the US from the first day. As the work permit requires a US sponsor they would be the employer and as such he would operate under the US equivalent of PAYE (W2). Under the Double Tax Agreement between the UK and USA and individual paying tax in the US would be able to claim this as a credit against their UK tax liabilities on the same income should they remain tax resident in the UK;

3. In order for the arrangement as original explained to be legal the individual needs a work permit (H-1B). However, as mentioned earlier the quota for 2015 is already full. I have contacted two other sources regarding any other options and as expected there aren’t any.



The key problem we have is US immigration.



Alternatives:

1. Contractor remains based in the UK with periodic business trips for meetings/training only;

2. Alternative contractor is sought with a nationality that fits within the other visa options (ideally Australian or Canadian) or is a US national or Greencard holder.


I’m sorry if this doesn’t sound very flexible but US immigration isn’t.

[BlasterBates]

I'm not saying you can work on a tourist visa, I said I did in the past. What I said was there are rules that allow you to work directly for a UK company either as a permie or self-employed in most countries for a limited period.

This is to allow companies to export goods and install commission equipment.

I also said you to have find out whether this is possible by taking professional advice. We can have arguments on here but we don't know. You have to see a professional. I would not do this without enquiring without getting information from the country's tax authority.

A colleague of mine worked in Switzerland on this principle, and I also spoke to a German tax lawyer on the issue of international taxation who told me this and that the rules were very similar in most countries. The key is you are a cost on the books of a UK company.

Example Belgium, secondment as a self-employed

http://www.acv-online.be/Images/Deta...cm9-284556.pdf

Persons who carry out a self-employed activity in another EU
country may work temporarily in Belgium in the context of a
secondment. Self-employed are not subject to the authority of
an employer. They are their own boss, define the quantity of
work they carry out or how much they want to earn and are
subject to another tax system.

Of course the USA maybe an exception, however in Switzerland in the bank I was working in we did have employees who were seconded.

as I say none of us here know, take advice.

Generally agencies do not count, i.e. you can't do an international secondment via an agency.

[stek]

If you are working for a UK company it is indeed possible and without being taxed in the US.

I used to work for an company that sent us around the world, we would just go in on simple tourist or similar types of visas, and that included the USA though a long time ago. We would stay there for months. I was in the far East.

This is OK provided you are working directly for the UK company either as a permie or contractor.

I would get advice though on that and make sure you get the necessary type of visa.

I know this is generally case in most countries.

What you couldn't do easily, would be to work directly for a US company.

Sorry Blaster I normally agree with you but this isn't right. Everything is so much tighter now and whilst some third world countries might bend the rules even dodgy places like Russia will do you for working on a tourist visa.

I turned a short termer in Egypt down paying four figure daily rate (and not 20.00 quid!) because the agent said just turn up no visa needed, when the Egyptian consulate said I need a work visa, and it was kicking off there anyway and I didn't fancy getting banged up and any excuse....

[jamesbrown]

If you are working for a UK company it is indeed possible and without being taxed in the US.

I used to work for an company that sent us around the world, we would just go in on simple tourist or similar types of visas, and that included the USA though a long time ago. We would stay there for months. I was in the far East.

This is OK provided you are working directly for the UK company either as a permie or contractor.

I would get advice though on that and make sure you get the necessary type of visa.

I know this is generally case in most countries.

What you couldn't do easily, would be to work directly for a US company.

The world has changed, and this advice is wrong. On the contrary, they could only do this as an employee of a US company. There is no appropriate visa (if you disagree, please indicate which visa applies). Certainly, it's impossible under the Visa Waiver Program or on a B1 business visa, neither of which support "productive work". Further, a visa is granted on the basis of a US company petitioning the USCIS for their employee or potential employee. A UK company cannot petition the USCIS. Further, it's unclear what you mean by "without being taxed in the US". Even as a nonresident for tax purposes, if you have income from personal services performed in the US, that income is effectively connected with a US trade or business and is taxable. Residents for tax purposes are taxed on their worldwide income. US citizens are taxed regardless of residency.

[ITPRO2]

If you are working for a UK company it is indeed possible and without being taxed in the US.

I used to work for an company that sent us around the world, we would just go in on simple tourist or similar types of visas, and that included the USA though a long time ago. We would stay there for months. I was in the far East.

This is OK provided you are working directly for the UK company either as a permie or contractor.

I would get advice though on that and make sure you get the necessary type of visa.

I know this is generally case in most countries.

What you couldn't do easily, would be to work directly for a US company.

Working under a tourist visa is very bad advice. I would ignore every word of this.

[BlasterBates]

If you are working for a UK company it is indeed possible and without being taxed in the US.

I used to work for an company that sent us around the world, we would just go in on simple tourist or similar types of visas, and that included the USA though a long time ago. We would stay there for months. I was in the far East.

This is OK provided you are working directly for the UK company either as a permie or contractor.

I would get advice though on that and make sure you get the necessary type of visa.

I know this is generally case in most countries.

What you couldn't do easily, would be to work directly for a US company.

[jamesbrown]

I'm a dual citizen and I wouldn't bother due to the MASSIVE headache the tax situation would cause. US tax laws are ridiculously complicated, so I'd give it a miss if I were you.

Yes, absolutely. Even if the OP could do this, it would be a nightmare dealing with Subpart F and other rules - very expensive annual returns.

[MacContractor]

I'm a dual citizen and I wouldn't bother due to the MASSIVE headache the tax situation would cause. US tax laws are ridiculously complicated, so I'd give it a miss if I were you.

[TheCyclingProgrammer]

Have you used the search function? /NLUK

http://forums.contractoruk.com/busin...rking-usa.html

[jamesbrown]

Not possible, I'm afraid.

You could be seconded as an employee (of your current client, assuming they have a US branch) on an L1 visa, for example, but working in the US as a visitor (without citizenship or permanent residence) requires an employment visa. Contracting for your UK company is not an option for rather obvious reasons (they do not have a US payroll), aside from any visa issues.

[stek]

You can't contract in the USA unless you have US citizenship, or a Green Card.

[phil5476]

Hi All,

I am currently in a long term contract for a UK company. Currently 20 months in. They want to send me to the USA for 9 months to a year beginning in 5 months. I will continue to be paid in the UK.

What issues do you forsee and can you help me with the details of the following:

1) I think the IRS will want to double tax me

2) My expenses will go through the roof and itis my expectation that HMRC will take a sudden interest in my company. How do I ensure I am on waterproof in regard to expenses.

3) Anything else you can think of!

Thanks In Advance