Whether you want to work remotely for a US based company or a foreign company, at home while living in the US or abroad, the opportunities are endless since you’ve basically have expanded exponentially.
However, your success or failure will depend on understanding the modern online workplace and the rules of engagement as well as your own objectives.
Contents
Why would a foreign company hire you to work remotely while living in the US?
If a foreign company is based outside the US, they may want to hire you to work remotely for them because you’re based in the US. They usually either want a US presence or they want an American to deal with other Americans on their behalf.
Working remotely for a foreign company outside your home country.
With the trends in globalization over the last 20 years along with the improvements in internet speed and connectivity, doing business across borders seems to know no bounds.
So let’s say you are based in Argentina and a German company wants to hire you because of your native English skills to deal with clients in the United States or the UK.
Unless they have a physical location where you need to meet clients face to face, there’s no reason why they wouldn’t want to hire an American for example, to do work online with their US based clients.
In fact, because of the lower cost of living in other parts of the world, along with the cost savings for not having to pay for standard things like FICA (Social Security, Medicare), Workman’s Comp, etc. foreign companies often find that they can get a native English speaker, US or UK citizen, for much cheaper than they could a US or UK citizen living in their home countries.
Working remotely from another country and taxes.
First, I need to qualify this and say that I am not a tax specialist, an accountant nor an attorney. So please take what I say as anecdotal.
If you want professional advice, please seek the counsel of a certified accountant, tax specialist or attorney in your home country or in the country in which you need advice about.
The above being said, I can only speak from my own personal experience as a US citizen. The United States is probably the only country that taxes its citizens based on their worldwide income.
So regardless of which country you are currently residing in, if you are a US citizen, you are required to file and possibly pay US taxes, even if your income is from a different country.
However, there are many exemptions and deductions in US tax laws regarding expatriate workers. You can read and get a general gist of what these exemptions are on the IRS website here under the Foreign Earned Income Exclusion.
This should give you a general idea about your options.
Although if your income is US based, you should know that your US based employer, whether you work freelance or full-time will also file a tax return with the IRS.
They will use your information that you gave them including your social security number to record your payments as an expense.
Therefore, you must definitely include your US employer in your tax filings. In addition, if you make under $600 a year your employer is not required to file what’s called a 1099.
However, you are required to record that income on your tax returns.
In addition, if you have foreign sourced income, you should also include that with your income, even if they are not US based.
Working for a foreign company while living in the US.
If you’re working for foreign company while you’re living in the United States, then that company either has an office and is a legal business entity in the United States or they are not.
If that foreign company is a legal entity in the US, the company would normally be subject to US laws and conduct itself in the same way a US company would.
This means, if you are an official employee of that company, they would of course be obligated to pay their share of all the social costs like FICA, Workman’s Compensation along with any other additional benefits they may offer like Health Insurance, etc.
If you are working as a freelancer for a foreign company in the United States and they are not based in the United States, then you would be responsible for all your own social charges like FICA etc.
Working remotely in the US for a foreign company.
If you are working remotely in the US for a foreign company a lot will depend upon, once again, whether that foreign company is or has an office in the United States and is a legal business entity in the United States.
If that is the case, then they would behave and pay you like a normal US company would.
However, if the foreign company is based overseas, then more than likely they will pay you as a freelancer. As I had said above, in this case you would be responsible for all your own employee/employer related expenses.
Working remotely for a foreign company based abroad is basically “a given”, if you are a freelancer.
Though working remotely for a foreign company that is based in the United States and as a legal entity in the United States, then you would need to approach that foreign company in regard to your work arrangements for working remotely, as you would an American company.
Working for an overseas employer. How to get paid?
From my own experience I’ve been paid two ways when I’m working for an overseas employer.
The first way is via electronic funds transfer. This is basically a payment transfer from their bank account to yours.
All overseas employers who are a legal business entity in the United States usually have a US bank account to do this with. So this payment method is basically the same as if you’re paid by a US company.
The second way to be paid by an overseas employer is via PayPal. PayPal is an international payment system.
There are other international payment systems, but PayPal is the most popular, especially among freelancers.
In fact, in both situations above, I was paid as a freelancer and not as an employee.
Needless to say, whether you work remotely for a foreign company in the US, you work remotely for a foreign company in a foreign country or you work for a US based company remotely from abroad. The payment methods work pretty much the same.
Nowadays, international banking, even for freelancers, can be surprisingly smooth. However, tax and employment laws aren’t.
This is why, as always, you should always seek the council and services of an accountant or tax preparer who specializes in working with expats or those who work remotely.