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Contractor work in Europe for US Company

Asked by: Maria - 20 December, 2011
Hi,

I am an Austrian citizen and US legal resident, married to a US citizen. I've lived in the US for 5 years and have been working as a Business Analyst for an IT company as a W-2 contractor for 7 months. I will be moving back to Austria and my company wants to keep me as a contractor. How do I approach this? Do I need to incorporate in the US or in Austria for corp-to-corp work? I am pretty sure I will need to pay income tax in Austria. I want to make sure I do everything legally correct. We will keep our house here in the States and rent it out (so we have to continue filing taxes) and I could also use my relatives address in the US. I will have bank accounts in both countries.

Thanks!
Answered by: Robert Kowalski - 21 December, 2011
Dear Maria,

First of all your particular situation requires an input of a professional attorney, since it touches many important legal questions. On my end I could give you some ideas and food for thought, however this cannot be considered legal advise and you still should seek advise form a licensed attorney.

In your particular situation what you could do is form an LLC in the state where your rental property is located and use it both to hold the rental property and as the entity through which you will be paid for your contractor work for the IT company.

You could logically separate the businesses by registering a DBA for one of them, however keep in mind that since both activities would take place under one entity there will be no limitation of liability between the two. To completely separate one from another you would need two LLCs.

As far as income taxes go - this time I would recommend you to consult an accountant specializing in international taxation treaties, since you will be living in Austria and at the same time draw income in the US.

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