(posted this by accident in the UK community, not sure if reposting here is redundant or if the communities are distinct)
I am investigating whether I can pay a geographically diverse set of contractors using PayPal. I have looked into ODesk and similar, but they are not an option.
Here are the issues:
- To avoid the burden of gathering W-9 / W-8BEN forms and to avoid the related burden of annual issuance of 1099 forms to US citizens, I am thinking of locating the paying entity outside the USA. I certainly am not advocating tax evasion; a US-based contractor or other person subject to US withholding would still have the obligation to pay their US taxes on earned income, and ditto for contractors from other countries. But the goal is that the paying entity (me) would not have the burden of helping the contractor annually dot that I and cross that T. In other words, I am hoping to locate the entity such that this paperwork burden is unnecessary across all expected contractors' country of residence.
So the question is this: if the paying entity is located some place like Costa Rica, does it require that the bank associated to the paying entity's PayPal account is physically located in Costa Rica too? And if so can the payments still be made in the relevant local currencies?
- I would like discover the pros vs. cons of paying the contractors in their local currency. E.g., pay US-based contractors in US dollars, Japan-based contractors in Yen, AU contractors in AU dollars, etc. I know that one cannot escape the long arm of foreign currency exchange, but I am curious whether the rate is better with PayPal (and could potentially be eaten by the paying entity) or is more attractively priced at the receiving end.
