Offshore consulting from the view point of a US company


2

If I provide consulting/freelance services for a US company, does it matter for the US company whether I'm based in Germany, India or the Seychelles?

I'm NOT interested in the reputations these countries have (e.g. German quality vs. Indian low cost outsourcing), but I'm interested to find out if there might be any legal implications or differences in accounting for the US based client to pay an invoice and transfer money to an EU country like Germany OR a "3rd world" country like India OR a well-known tax haven like the Seychelles.

Consulting Offshore

asked Jul 10 '11 at 20:11
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Znq
164 points
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2 Answers


1

OK, answering strictly on the premise of the question, i.e. not taking in reputation / habits / corporate norms.

be any legal implications

Absolutely. Filing a lawsuit against you for fx failing to adhere to contract will be much harder overseas. From the viewpoint of a US company, enforcing their rights is:

  1. By far easiest in the US, where they know the laws, have an established network of attorneys and legal professionals, etc.
  2. Then follows Europe, which is at least large enough that most larger US law firms have direct representation here, and which does lots of business with the US.
  3. And then comes the small offshore jurisdictions, of which there are many, and many of them have legal codes that are intended to shield assets from foreign collectors.
pay an invoice and transfer money to an EU country like Germany OR a "3rd world" country like India OR a well-known tax haven like the Seychelles.

It all depends, and this is an area that is always changing.

  • Bank transfers to the EU are generally easy. (Though some smaller banks in the US don't use the SWIFT system, which is preferred in Europe.)
  • It is currently difficult to send payments to India, which is debated here.
  • Tax heavens -- well, on one hand there is lots of business going through them, so bank transfers are mostly well understood. On the other hand, the rules can change, and tax authorities can tend to give more scrutiny to these transactions.
answered Jul 11 '11 at 18:30
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Jesper Mortensen
15,292 points

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That's a tough one not knowing your field of expertise. Some industries like web design and software coding have no problem dealing with sources outside the US. Other industries simply will not do business with you unless you have a US address.

This has very little to do with your qualifications and everything to do with corporate norms. Let's say you bump into a manager at a gathering that could obviously use your services and personality-wise it seems like a good match. That manager would have to submit your invoice to the purchasing department that simply might not have the ability to process an offshore bill. It may create more headaches than it is worth to them.

Another consideration is the nature of consulting itself. Most consultants are hired in the US not to access their knowledge of a particular field, but to provide 3rd party proof of an already accepted position. Say Company A wants to make a major purchase and their inhouse experts have already crunched the numbers. Before they can present the plan to the Board they require 3rd party confirmation first. So they hire a consultant to prepare a paper on the subject for which they already know the answer. And that 3rd party proof will stand much less chance of rejection if it comes from another US based company.

By the way, that is the trick to being a "good" consultant. Discover what answer the customer is looking for then prepare a report providing that very same answer.

answered Jul 11 '11 at 16:36
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Hondo69
309 points
  • Thanks for your answer. Hondo. The field of expertise is "software". However, I believe it's not so relevant since I'm more interested to find out about **legal implications** and eventual **accounting difficulties** (transferring money) depending on the offshore country. Is it easier, as a US company, to deal with an EU company rather than a consulting company in India or the Seychelles? – Znq 8 years ago

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