ForumsManaging Employees and HR

There are two ways to look at this situation. One way is to look at it as "an Employee" and "wage paid". The other way to look at it would be: "Payment for services rendered".

For the first situation: What you would ideally like to do is to establish a company in the new employee's (Let's call him John Doe for ease) country. The company should be a subsidiary/branch of your company and John draws his salary from that company. - You need to adhere to Labor laws of that company and all other applicable laws of that company. For a start-up, this is not a very viable option.

For the second situation: John Doe, establishes his own "consulting company" (you can pay for that if you want to, but ideally you can ask him to start his own company which is not that costly, if it is started as a proprietership/single owner) and he sends you a monthly invoice for the agreed wage and you pay the invoice.

In both those situations, you need to consult a CPA to identify how you would classify the expense as: Wages or service expense and what the best tax saving would be.

I hope it helps!

Good luck,

Brox

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