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Working remotely from Canada for a US company - what options do I have beyond the norm?

May 7, 2022
3
0
Apologies in advance if this has already been covered in another thread!

My fundamental question is what options exist, beyond the three most commonly mentioned (contracting, EOR, establish branch of business in Canada), for working remotely from Canada for a US company? More detail below.

---

A US based company has offered me a 2 year contract for a full time position, as a manager of people, in technology role (the company is not a tech company, but the position is). The position allows me to work remotely, with occasional travel to the US (~a month a year).

However, after extending me the offer and starting the HR process, the company realized they were not set up to employ someone residing in Canada. Their HR, accounting team, and lawyers researched options to employ me, but in the end, the owners of the business were not comfortable with any of these options due to tax risks.

Here is my situation:
  • I am a US citizen (SSN, etc.)
  • I am a Canadian citizen (just waiting to do oath swearing ceremony)
  • I reside in Canada (B.C.)
  • I maintain a mailing address in the US
As I understand it, the consultants they worked with to try and find a solution outlined three possibilities, each of which was ruled out:
  1. Contractor
  2. Use an EOR
  3. Establish a branch of the company in Canada
Apparently the role I'd be performing disqualified me for the contracting option (#1).

The EOR option (#2) seemed to make sense, but in the end made the company owners uncomfortable because of potential tax liability stemming from risk of "permanent establishment". The company is private, and owned by 10 or so very wealthy people whom I assume do not want any more tax scrutiny than needed. The company is also in the midst of a multiyear process of changing hands.

Option #3, establishing a branch in Canada was too expensive and time consuming for them to warrant for hiring a single employee.

---

Are there other options? This job is more or less my dream job, so I'm trying to exhaust all possibilities. How about something with an H1B be? Does anyone out there know of any other creative solutions that would work without exposing the owners to tax risk?

Thank you for any ideas!
 

scylla

VIP Member
Jun 8, 2010
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Toronto
Category........
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Job Offer........
Pre-Assessed..
App. Filed.......
28-05-2010
AOR Received.
19-08-2010
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Apologies in advance if this has already been covered in another thread!

My fundamental question is what options exist, beyond the three most commonly mentioned (contracting, EOR, establish branch of business in Canada), for working remotely from Canada for a US company? More detail below.

---

A US based company has offered me a 2 year contract for a full time position, as a manager of people, in technology role (the company is not a tech company, but the position is). The position allows me to work remotely, with occasional travel to the US (~a month a year).

However, after extending me the offer and starting the HR process, the company realized they were not set up to employ someone residing in Canada. Their HR, accounting team, and lawyers researched options to employ me, but in the end, the owners of the business were not comfortable with any of these options due to tax risks.

Here is my situation:
  • I am a US citizen (SSN, etc.)
  • I am a Canadian citizen (just waiting to do oath swearing ceremony)
  • I reside in Canada (B.C.)
  • I maintain a mailing address in the US
As I understand it, the consultants they worked with to try and find a solution outlined three possibilities, each of which was ruled out:
  1. Contractor
  2. Use an EOR
  3. Establish a branch of the company in Canada
Apparently the role I'd be performing disqualified me for the contracting option (#1).

The EOR option (#2) seemed to make sense, but in the end made the company owners uncomfortable because of potential tax liability stemming from risk of "permanent establishment". The company is private, and owned by 10 or so very wealthy people whom I assume do not want any more tax scrutiny than needed. The company is also in the midst of a multiyear process of changing hands.

Option #3, establishing a branch in Canada was too expensive and time consuming for them to warrant for hiring a single employee.

---

Are there other options? This job is more or less my dream job, so I'm trying to exhaust all possibilities. How about something with an H1B be? Does anyone out there know of any other creative solutions that would work without exposing the owners to tax risk?

Thank you for any ideas!
IMO there aren't any further options in terms of working from Canada. The three you have listed above are it. Are you sure #1 isn't possible?

An H1B is a US work permit. It has nothing to do with working in Canada.
 
May 7, 2022
3
0
IMO there aren't any further options in terms of working from Canada. The three you have listed above are it. Are you sure #1 isn't possible?

An H1B is a US work permit. It has nothing to do with working in Canada.
Thanks for the response.

I didn't get a lot of detail as to why contracting was not an option, but I believe it related to the role being director level and having to manage people. Perhaps also around the intent as well - they want to hire me permanently (or at least for 2 years anyhow) and I'm not sure if that violates the spirit of the "contracting" option.

Do you think there is a potential work around here? Perhaps rejiggering the job description?
 

scylla

VIP Member
Jun 8, 2010
92,541
20,360
Toronto
Category........
Visa Office......
Buffalo
Job Offer........
Pre-Assessed..
App. Filed.......
28-05-2010
AOR Received.
19-08-2010
File Transfer...
28-06-2010
Passport Req..
01-10-2010
VISA ISSUED...
05-10-2010
LANDED..........
05-10-2010
Thanks for the response.

I didn't get a lot of detail as to why contracting was not an option, but I believe it related to the role being director level and having to manage people. Perhaps also around the intent as well - they want to hire me permanently (or at least for 2 years anyhow) and I'm not sure if that violates the spirit of the "contracting" option.

Do you think there is a potential work around here? Perhaps rejiggering the job description?
I don't have the legal / tax expertise to comment on this. You need a lawyer.

I don't think it would be a matter of simply rejiggering the job description. The job would need to be sigificantly changed / redesigned. If they want to hire you permanently, then you're not a contractor. Contractors are temporary employees. So they would need to be willing to hire you temporarily which would change your compensation strucutre. People leadership would have to move to someone else.

Realistically, if you want this job, the only option you may have is to relocated to the US if the company is not willing to go with option #2 or #3.
 
May 7, 2022
3
0
I don't have the legal / tax expertise to comment on this. You need a lawyer.

I don't think it would be a matter of simply rejiggering the job description. The job would need to be sigificantly changed / redesigned. If they want to hire you permanently, then you're not a contractor. Contractors are temporary employees. So they would need to be willing to hire you temporarily which would change your compensation strucutre. People leadership would have to move to someone else.

Realistically, if you want this job, the only option you may have is to relocated to the US if the company is not willing to go with option #2 or #3.
I see. Thanks again for your comments.

What type of lawyer handles this type of matter?
 

scylla

VIP Member
Jun 8, 2010
92,541
20,360
Toronto
Category........
Visa Office......
Buffalo
Job Offer........
Pre-Assessed..
App. Filed.......
28-05-2010
AOR Received.
19-08-2010
File Transfer...
28-06-2010
Passport Req..
01-10-2010
VISA ISSUED...
05-10-2010
LANDED..........
05-10-2010
I see. Thanks again for your comments.

What type of lawyer handles this type of matter?
This is really about what your US employer is or isn't willing to do. So it needs to be a lawyer in the US who understands employment, tax liability, etc. I would personally be working with the lawyer who represents the company you want to work for. Ultimately they need to be OK with whatever path is chosen.