TN1 - Corp to Corp

[ask4vz]

I am a TN1 newbie. I am a Canadian citizen who received an employment letter from a staffing agency to work for an US employer.

Instead of W2 , I am thinking to register a S Corp and agreement with the staffing agency.

Appreciate , if you could give me an insight on the following.

1) Will I be able to start a S Corp while in Canada? ( before leaving Canada)
2) Does it benefit starting a S Corp or should you recommend to bill my Canadian corp. Any tax ad/disadvantages?
3) Should the staffing agency be required to indicate the S-Corp contract agreements/payment information in the employment letter.

 

[nelsona]

This would not be considered employment, but rather the agency would be your client. They may or may not go for that. Of course, your ultimate goal would be to contract directly with the clients, cutting out the staffing agency.

The nature of your relationship should be spelled out in the TN, it should name YOU (not any corp) as the beneficiary, and Agency as your sponsor, and that you will be paid on a contract basis.

Once you establish IRS definition of resident alien (ie. pass the SPT) you can own an S-corp -- so certainly not before leaving Canada for 6 months. . You would want the corp to be in the country where you live to avoid dual (and sometimes conflicting) taxation.

Since you won't have the S-corp when you apply for TN, they should only mention that they are paying you as a contractor.