[tpm] Cross-border contracting

Olaf Alders olaf.alders at gmail.com
Wed Jul 31 11:23:16 PDT 2013

Hi Chris,

Congrats on the gig.  :)

On 2013-07-31, at 2:10 PM, Chris Reuter wrote:

> Hi Folks,
> I seem to have gotten a small contract with an American company.
> Since a lot of people here do cross-border contracting, I was hoping
> to get some advice.
> My specific questions are (in no particular order):
> 1. Should I incorporate?

I think that may be a question for your accountant and/or lawyer.  I've done lots of work for US clients and have never incorporated, but if there are issues of liability, incorporation might be right for you.

> 2. Is it true that I can operate a sole proprietorship in my own name
> without needing to register anything?

I registered a business name and listed it as a sole proprietorship, but I don't know if there's a requirement for that.  It might make it easier to get a business bank account etc.

> 3. Will I need to charge the customer (who is American) HST?  (The
> point is moot right now because it's not enough money to qualify, but
> I'm curious.)

Generally, no.  If the client doesn't have a presence in Canada, then you wouldn't charge them HST.

> 4. Is there a preferred method of payment?

Cheques can be slow to clear cross border (at least that's what your bank will tell you when the put an arbitrary hold on it) but if you're dealing with larger amounts, the PayPal % gets to be significant.  i.e., it might cost you $30 to accept a $1000 payment.  In my case, I have my employer pay a 3rd party HR firm which pays me via direct deposit.

> 5. Do I need insurance?
> 6. Are there any tax gotchas I need to watch out for?
> 7. Do you have any other advice and/or pointers to resources?

If it's a short contract and you haven't dealt with them before, you can see about getting a good % of the money up front and then make sure you get paid at regular intervals throughout the job.  The simple act of getting paid on time can be excruciating, depending on whom you're dealing with, so getting something before you even start can be a motivator for both parties.


Olaf Alders
olaf.alders at gmail.com


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