Remote work for a US company while living in Canada on a closed work permit

[vi5nnu]

Hello All,

I moved to Canada 2 months ago on an ICT visa from the US and I am currently working full time for my employer. However, I received an offer letter from a US based company(different company and they don't have operations in Canada) to work part time remotely. I am not sure if I can legally work in Canada for a US company since I am on a closed work permit. However, I submitted my PR application in Oct 2020 and was wondering if I can change my work permit to open based on that and start working for that company remotely

Also, I still have my US bank accounts so can I be paid to those accounts directly?

I am on Indian Passport

 

[scylla]

Hello All,

I moved to Canada 2 months ago on an ICT visa from the US and I am currently working full time for my employer. However, I received an offer letter from a US based company(different company and they don't have operations in Canada) to work part time remotely. I am not sure if I can legally work in Canada for a US company since I am on a closed work permit. However, I submitted my PR application in Oct 2020 and was wondering if I can change my work permit to open based on that and start working for that company remotely

Also, I still have my US bank accounts so can I be paid to those accounts directly?

I am on Indian Passport

You can work for the other employer provided they have no customers in Canada / no business dealings in Canada or with Canadians.

When does your ICT expire? You can only apply for a BOWP if your ICT work permit is expiring within 4 months.

 

[vi5nnu]

Thanks for your response. My ICT expires in Feb 2023, so I guess I cannot apply for BOWP now. This company does not have any operations/Customers in Canada or any other country except in the US. Will I be ok if I start working for them and pay taxes regularly?

 

[canuck78]

Thanks for your response. My ICT expires in Feb 2023, so I guess I cannot apply for BOWP now. This company does not have any operations/Customers in Canada or any other country except in the US. Will I be ok if I start working for them and pay taxes regularly?

Assume you don't have a WP in the US. How are you structuring this employment including payment? Would @vi5nnu be able to work as a consultant for the company while on a Canadian ICT given they can't work in the US.

 

[vi5nnu]

I do not have any valid status in the US, so I don't think they can pay to my US bank account. If I can legally work remotely for a US company while living in Canada on a closed work permit, they are willing to pay to my Canadian bank account.

 

[canuck78]

I do not have any valid status in the US, so I don't think they can pay to my US bank account. If I can legally work remotely for a US company while living in Canada on a closed work permit, they are willing to pay to my Canadian bank account.

You can’t. You will essentially be self-employed in Canada when you are only allowed to work for the employer listed on your closed WP.

 

[kathysrazor]

Let's start with the Canada side.

https://www.canada.ca/en/immigration-refugees-citizenship/corporate/publications-manuals/operational-bulletins-manuals/temporary-residents/foreign-workers/what-is-work.html

What kind of activities are not considered to be “work”?
...

• long distance (by telephone or Internet) work done by a temporary resident whose employer is outside Canada and who is remunerated from outside Canada;

Telecommuting work that does not compete with Canadians is not considered "work", and thus doesn't require a "work permit" to perform. I did it under a study permit, no problem.

That leads to the second side, the US. If you are an independent contractor (and the nature of the work supports such a classification), it's relatively simple.

"The IRS provides guidance on how sources are determined for different types of income for foreign persons. Foreign independent contractors earn income by providing personal services. According to the IRS, the source of personal services income is determined by where services are performed. Therefore, even if a foreign person works for a US company, the income he or she receives is not US source income as long as service is performed outside of the US. As a result, a US company is not obligated to withhold or report taxes if the contractor does all his work outside of the US."

In order to avoid them withholding a 30% tax on the money sent to you, they should have you fill out a W-8BEN, and you would claim the US Canada tax treaty if you meet its terms. You would then be obligated to file and pay taxes in Canada on that income.

It would be better to be paid in Canada, rather than the US, because it helps keep the residency cleaner.

 

[canuck78]

Let's start with the Canada side.

https://www.canada.ca/en/immigration-refugees-citizenship/corporate/publications-manuals/operational-bulletins-manuals/temporary-residents/foreign-workers/what-is-work.html



Telecommuting work that does not compete with Canadians is not considered "work", and thus doesn't require a "work permit" to perform. I did it under a study permit, no problem.

That leads to the second side, the US. If you are an independent contractor (and the nature of the work supports such a classification), it's relatively simple.

"The IRS provides guidance on how sources are determined for different types of income for foreign persons. Foreign independent contractors earn income by providing personal services. According to the IRS, the source of personal services income is determined by where services are performed. Therefore, even if a foreign person works for a US company, the income he or she receives is not US source income as long as service is performed outside of the US. As a result, a US company is not obligated to withhold or report taxes if the contractor does all his work outside of the US."

In order to avoid them withholding a 30% tax on the money sent to you, they should have you fill out a W-8BEN, and you would claim the US Canada tax treaty if you meet its terms. You would then be obligated to file and pay taxes in Canada on that income.

It would be better to be paid in Canada, rather than the US, because it helps keep the residency cleaner.

If you can’t legally work in the US you will be working as a consultant in Canada for the US company. The US company can’t pay you in the US because you aren’t able to legally work in the US. You can’t work for the US employer as a consultant in Canada while in Canada on a closed work permit working for another employer. If you could legally work in the US things would be different.

 

[kathysrazor]

If you can’t legally work in the US you will be working as a consultant in Canada for the US company. The US company can’t pay you in the US because you aren’t able to legally work in the US. You can’t work for the US employer as a consultant in Canada while in Canada on a closed work permit working for another employer. If you could legally work in the US things would be different.

Sure you can. I had a closed work permit on top of my student work permit, on top of working for a US employer remotely.

Canada does not consider an activity work if it does not enter the Canadian labor market. Working as a consultant for a US company is thus not considered work, as long as the compensation is made from outside Canada, the services are provided outside Canada (telecommuting) and they do not maintain a Canadian presence. This does not affect your closed work permit, because as far as Canada is concerned you are not "working".

 

[canuck78]

Sure you can. I had a closed work permit on top of my student work permit, on top of working for a US employer remotely.

Canada does not consider an activity work if it does not enter the Canadian labor market. Working as a consultant for a US company is thus not considered work, as long as the compensation is made from outside Canada, the services are provided outside Canada (telecommuting) and they do not maintain a Canadian presence. This does not affect your closed work permit, because as far as Canada is concerned you are not "working".

That’s incorrect because unless you are legally able to work in the US you are working as a consultant in Canada so you are working in Canada.

 

[kathysrazor]

That’s not what Canada.ca says. Or the enforcement manual.

It’s “in Canada”, but it’s not “work” in Canada.

 

[kathysrazor]

The Canadian legality doesn’t depend on your US status, nor would there be any reason for it to.

 

[canuck78]

The Canadian legality doesn’t depend on your US status, nor would there be any reason for it to.

How you get paid and your ability to work legally in various countries does matter. In this scenario OP is essentially self-employed working as a consultant from Canada.

 

[canuck78]

Let's start with the Canada side.

https://www.canada.ca/en/immigration-refugees-citizenship/corporate/publications-manuals/operational-bulletins-manuals/temporary-residents/foreign-workers/what-is-work.html



Telecommuting work that does not compete with Canadians is not considered "work", and thus doesn't require a "work permit" to perform. I did it under a study permit, no problem.

That leads to the second side, the US. If you are an independent contractor (and the nature of the work supports such a classification), it's relatively simple.

"The IRS provides guidance on how sources are determined for different types of income for foreign persons. Foreign independent contractors earn income by providing personal services. According to the IRS, the source of personal services income is determined by where services are performed. Therefore, even if a foreign person works for a US company, the income he or she receives is not US source income as long as service is performed outside of the US. As a result, a US company is not obligated to withhold or report taxes if the contractor does all his work outside of the US."

In order to avoid them withholding a 30% tax on the money sent to you, they should have you fill out a W-8BEN, and you would claim the US Canada tax treaty if you meet its terms. You would then be obligated to file and pay taxes in Canada on that income.

It would be better to be paid in Canada, rather than the US, because it helps keep the residency cleaner.

The company couldn't pay them in the US since OP doesn't have the right to work in the US. You seem to be a US citizen so your situation is different that OP.

 

[iVictor]

Hi All,
I’ve started thinking about finding a second job in the US while residing in Canada on a closed work permit. I’m a Software Engineer, and finding a contract isn’t difficult, but I still have questions regarding Canadian immigration laws:

1. Am I allowed to work remotely on a contract for a US company (as a second job) while living in Canada with a closed work permit for my main job?
2. Can a US employer deposit a regular salary directly into my Canadian bank account?
3. Are there any official sources of information on this topic besides this link?
4. Could this cause issues with BC PNP TECH? I’ve already received an ITA and am waiting for a nomination.
5. Do I need to declare the US contract work in my Express Entry profile?

Thank you!