How to Pay Salaries from a US Company to Teams Abroad: A Complete Startup Guide

Описание: Step-by-step guide for US startups on paying founders and employees abroad legally via local entities and W-8BEN forms.

How to Pay Salaries from a US Company to Teams Abroad: A Complete Startup Guide

Many startups incorporate in the US (usually as a Delaware C-Corp). Why?

• Easier to attract venture capital.

• Globally trusted structure.

• Standardized for SaaS and tech startups.

But here comes the challenge: what if your team works outside the US? How do you pay salaries to founders and employees abroad legally and efficiently?

Let’s break it down into three key scenarios.

1️⃣ Payments to a Local Entity

The most common solution is to set up a legal entity in the country where your team is based. Examples:

• GmbH in Germany, LLP in the UK, Pvt Ltd in India, LLC in Eastern Europe, and many others.

Steps required:

1. Sign a service agreement (software development, outsourcing, etc.) between the US C-Corp and the local entity. Ideally bilingual, signed via DocuSign or similar.

2. File W-8BEN-E for the local company (confirming it is a non-US tax resident).

3. Issue monthly invoices to the US company.

💡 Key benefit: employees are hired by the local entity, so the US company has no direct employment liabilities.

2️⃣ Paying the Founder

The founder also needs compensation, but here’s the nuance:

• Via the local entity - the founder can receive salary as a director or contractor of their local company. This is the simplest option.

• Directly from the US company - only possible as an independent contractor, not as a W-2 employee.

Requirements:

• A personal contract with the US entity.

• W-8BEN form from the founder.

• Invoices for services.

⚠️ Important: founders cannot be directly employed by the US C-Corp without a valid US work visa and taxation in the US.

3️⃣ Paying Employees

For the rest of the team, the best practice is to use the local company.

• Employees sign employment or contractor agreements under local law.

• Payroll taxes are paid locally.

• The US company avoids unnecessary compliance in foreign jurisdictions.

This keeps things simple, cheaper, and legally clean.

Conclusion

The optimal structure looks like this:

• The US parent company (Delaware C-Corp).

• Local subsidiaries/entities abroad.

• US company pays the local entity for services.

• Local entity distributes salaries to the team.

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