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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39027
Experience:  Retired (mostly)
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As the owner of a US based LLC I intend to hire a consultant

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As the owner of a US based LLC I intend to hire a consultant who is based in Canada to perform his services in a third country (Chile).
What procedure do we have to follow and what information do I need to collect from the canadian company to be legally correct? Which IRS or USCIS related actions are needed to hire this consultant? Again: The consulting company is registered and based in Canada, the services will be performed in a third country - the only US related actions ae to issue a PO and to send the payment using the US based LLC.
You don't have any USCIS issue, because the consultant is not employed within the jurisdiction of the USA. You also have no IRS employment tax issue, because the consultant will presumably be hired by the Canadian employer.

Since the Canadian company will be rendering personal services outside of the USA, the source of any income will be non-U.S.-sourced income. Therefore you are not required to withhold income taxes from the Canadian organization.

See Publication 515 for more information.

Hope this helps.
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