Hello folks, I recently got an offer from European firm and they are asking whether I can setup a limited company and send them invoices every month. Another option they are offering is as contractor via something like www.remote.com. Can you please share your experience or some guide what is right way? I don't have experience as remote worker/contractor in past.

Better go as limited company and send invoice. You can claim all your expenses as deduction also tax rate for companies are less. if you could register as a startup.. you can tax holiday also iirc

Did they explicitly ask for a "Limited Company" ? You can be a proprietor which will make things easy for you.

Yes setting up as a proprietor should be sufficient

Thanks for responses guys. @damp-city-91224 they suggested for limited company. And if there is better option then I will share with them.

Limited company will need more compliance.

Reading about proprietorship and it seems a good option for a single person. Though it will require to register for GST as well. I will share about it with employer.

@sparse-magician-27804 Try to convince them to accept

Proprietorship

then

LLP

then

Ltd

in that order. Paperwork increases exponentially with each step.

LLP

is a good compromise. If there are liability issues in your line of work due to sharing of designs or trade secrets, prefer a LLP or Pvt. Ltd. All will need GST registration and 0% LUT filing.

I will check with them for the same. It is first time they are hiring someone from India so they also don't know much about legal payment options.

I have been billing clients in the US and UK via a proprietorship. So they pay an “entity” instead to Amit Sharma. You will need to open a current account/EEFC account. From their end, they just don't want to be seen as employing an individual abroad. Proprietorship works perfectly for that. Just pick an official sounding name. XYZ Technology or something.

Another aspect to keep in mind: If you are being paid as a company, you will have no rights or protection that are available to employees.

@loud-glass-33663 thanks for more details, I have proposed Proprietorship to employer. @acceptable-flag-71699 and that is not the case with proprietorship, right? I will have rights and protection under proprietorship?

No. Humans get human rights. Proprietorship, company, even OPC - are all artificial persons.

You can't have any rights unless you're employed either by the company's Indian wing or by an employer of record (like deel). In that case, you'll be paid a salary and can't claim any expenses (or 44ADA). AFAIK, Foreign companies can't hire humans out of India. Everything depends on the company you're working with. Many companies treat permanent employees and contractors the same.

apart from the model, always think of liability from your end before anything else. All have different levels but a sole prop or OPC doesnt distinguish the individual from the company so its unlimited theoretically there. For LLP and others, it is capped but the amount of compliance is humungous. see this link on how to manage it. i think @kind-carpenter-96991 is here to answer queries https://www.thegalacticadvisors.com/post/comprehensive-guide-on-tax-for-freelancers

+1 to use Proprietorship. If you do not intend to hire people in the near future, do not go with LLP/Pvt limited.

I want to work as an individual.

You can check out the following links too https://www.sidharth.dev/posts/selfemployment/ https://www.sidharth.dev/posts/payment/