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By corp-to-corp I am refering that instead of being a permanent employee of the US employer (being paid on W2), they want to pay to my corporation. I have got mixed information from web that this corporation that I will be setting has to be canadian corporation. In other instances I have seen people having a US corporation setup and the empoyee paying to their corporation and they draw money from their corporation in terms of salary or dividends. I want to know what is legal and what is correct. If the employer wants to pay for my corporation, does it need to be Canadian based or can be US based?
Yes. It is a contract job, but full time.
Hello,my name isXXXXX you for this opportunity to answer your questions.
I am a new expert.
You have to have a US employer (corp) be your employer and the employer has to pay you your salary.
So you will have to establish a US corporation that will sponsor your TN and be responsible to pay you as their employee.
It means that I will be the owner of the US company that I establish and I will be the employee of the same company, that I am owner of. Isn't it considered self employment? Is it a valid setup for obtaining TN visa?
No it is not self-employment because a corporation is a separate entity. Set it up as a c corp.
Self employment would be if you were not corp to corp and the contract was in your name.
It would be advisable to have a close friend or relative named as say Managing Director who would have authorization to sign the offer letter that you need for the TN at the border. That way you are not signing your own employment letter.
In addition, it is also advisable to have the corporation's contract with you when you apply for the TN to show that there is work for you since it is a newly formed entity.
But if I am forming company, if I am the Director of Company and I am employing myself, it does feel like self employment.
Where as if the contract is directly under my name, it means the recruiter company is hiring me, he is my employer, i.e. I am not self employed.
I am confused as what you are explaining is opposit of what I have read so far. Please dont mind, but can you clarify more?
Also, if I get TN and then set up US company and did corp to corp, would I have issues during TN renewal?
I am happy to clarify but this has me confused! Are you saying if you get a contract in your name that is not self employment?????
Thats correct. If the recruiting company is hiring me, i.e. making contract with me directly, I am an employee and his company is employer.
Whereas if he is making contract with the company that I have set up, then I am employee of my own company, because my company is separate entity and pays me. --> self employment.
No, this is where you are confused about "self-employment". Self employment under US law is where you yourself pay all your taxes, social security, etc.
Here is the IRS definition
(An employer) must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors.
If you are working for a corporation it is a separate entity, it is not part of yourself, but it is like another person. That is the best way I can describe it to you. It is not you.
If you do not declare the income of the business on your personal tax return and the corporation pays their share of all taxes and pays you a salary which you declare and pay income tax on, then you are not self employed. You are an employee.
It doesn't matter that you own the shares of the corporation.
The only disadvantage to this is double taxation. The corporation pays income tax on earnings and you pay taxes on your salary! But that is corp to corp. And the only way for you to get a TN unless you work as a management consultant.
I know this law well. In my 34 years as a business immigration attorney I have done many of these arrangements for TNs.
I want to know, who should write me a TN Support letter.
I will be working for one assigned client. This client will pay the money to recruiting agency and recruiting agency will pay it to my corporation.
My questions are
1. who should write me TN letter the client or the recruiting agency?
2. Me being paid on per hour basis, is it a red flag for TN?
Okay the payment structure is like this:
Client pays the recruiting agency
Recruiting Agency pays to my US Corp or Sole proprietorship
My US corp/ Sole proprietorship pays me
My own US corporation cannot sponsor me, me being the owner myself. If this was the case, anybody will setup an US corp and sponsor themselves for TN. This is not allowed.
It has to be either the recruiting company or the client. My question is who?
Hello. Where is the confusion that you are having? You have opted out two experts which means that neither can respond to you. We don't have many experts left with the type of knowledge that you are looking for. Did you accidentally opt them out?
You can review the questions and answers above, but the situation is simple.
I am planning to obtain TN visa.
I am setting up US corp, say corp MyCorp.
Client will pay my recruiter and recruiter will pay MyCorp. I, as an individual will get paid by MyCorp.
My question is who should provide me the TN sponsor letter? Client or Recruiter?
Ok. Is there any particular reason why you want to create this entity?
Thanks for your answer. It clarifies things, but are you saying that I can get paid by the recruitment company on 1099 without having to incorp? If so, can you please tell me how can I do that? Is sole proprietorship a way, or it is still the same as corp?
No, it does not. All that is required is that arrangements for remuneration for services to be rendered be made.
Take a look at this link on the 4th page:
So no, an hourly rate will not affect you receiving a TN.
Please let me know if you have additional questions and please do not forget to rate my service to you (not the state of the law) as that is the only way that I can get credit for my assistance. Even after you rate the service, I can still answer additional questions for you without additional charge. And don't forget that bonuses are always appreciated! Thank you.
Thanks for your answers Guillermo. I was wondering will you be able to provide me with a sample TN letter with hourly pay and close to my situation (letter from a recruiter)?
Thats fine. Thanks for your answers !!
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