Freelancing with US startups for Non-Americans — tax & immigration
Some of the most innovative and exciting tech startups on the planet are based in the US. But unless you are a US citizen, have a Green Card or an immigrant visa, you are out of luck—once you set foot on US soil you simply cannot work for US-based clients.
More specifically, if you travel to the US the way most non-Americans do — on a B1 visa or a Visa Waiver Program — it will be illegal for you to work for pay and illegal for US companies to pay you while you are there. A few edge cases exist, but for the most part all you will be able to do is attend meetings, seminars, conferences and negotiate contracts. No paid labor allowed, period.
Enter remote work
Working remotely on the other hand is a different ball game. Not only you can legally work for US clients but so long as you are not physically present in the US to do the job, or don’t meet a substantial presence test you won’t have to file a federal income tax return either.
In the words of the IRS itself:
As a general rule, wages earned by nonresident aliens for services performed outside of the United States for any employer are foreign source income and therefore are not subject to reporting and withholding of U.S. federal income tax.
In fact, you can even register a limited liability company in the US and accept payments into a US bank account. If you work remotely that income will still be considered foreign source and you won’t be required to file a federal income tax return (provided, again, you don’t meet the substantial presence test).
Form W-8BEN
What you may need, though, is the form W-8BEN. This form enables your clients to show the IRS why they haven’t withheld any federal income tax for payments made to you (if the IRS asks them during an audit that is). All you have to do is fill in your basic personal info, sign and send it along with your contract. That’s it.
Tax and immigration laws can be scary. But if you dig into it a bit you will often find straightforward ways to get things done. Just remember to always consult a professional in case of any doubt—there are often all kinds of caveats and you don’t want to take any chances.
