Canadian working remotely in US: incorporate or sole proprietorship?

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mabert
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Joined: Thu Aug 13, 2020 12:40 pm

Canadian working remotely in US: incorporate or sole proprietorship?

Post by mabert » Thu Aug 13, 2020 12:48 pm

Hi all:

I've received an employment offer from an American employer to work remotely on a series of teaching (university) contracts. All work will be online/no work performed within the US, so I am looking at options in terms of the employment structure and agreement. They are also very reluctant to engage me as an independent contractor given potential CRA scrutiny.

One option I've proposed is similar to a PEO setup: having them contract with my own existing corporation (Canadian), putting myself on payroll, and essentially I become a seconded employee who is leased to the American employer. My corporation acts as the 'employer of record', CRA is happy that I'm treated as an employee.

The other option that seems cleaner and more attractive is to set up a sole proprietorship and then have the American employer contract with the sole proprietorship rather than me directly as an individual. The tax compliance still gets covered off (T4 return each year), but the employee vs. independent contractor question seems to be a grey area.

Any thoughts or experience with this much appreciated!

nelsona
Posts: 16514
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Canadian working remotely in US: incorporate or sole proprietorship?

Post by nelsona » Fri Aug 14, 2020 8:19 am

Being paid corp-to-corp would be the best methos for them. And for you, since you are in canada, you would then not have to deal with US taxes either.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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