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X is a resident of India and holds an Indian passport, X is on H1 visa in USA , X is working with a company C.com , X wants to move to India.

C.com and X both want X to continue working for C.com

C.com wants X to start a corporation (say XCorp LLC) so that X can raise invoices and C.com can make payment to XCorp LLC

Will X be double taxed?

if yes , what are the options to avoid double tax?

X also has a friend XF who has agreed to take a small share (5%) and transfer (95%) money to X in India so that X is not double taxed

XF is a resident of US

Q. What tax will XF have to pay ( on 5% or on 100% ) if that is done

Q. is the arrangement legal ?

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The best way is for X to work as Independent consultant fro c.com from India by raising monthly invoices for the work done. This will avoid the complications and paperwork associated by registering a LLC in US by XF and then employing X as independent consultant in India.

X may need to fill out W8-BEN forms so that there is no withholding in US

Edit:
Independent consultant means without having to register any legal entity either in India or in US. There are no legal regulations in US or in India to hire an independent contractor / consultant. There maybe internal policy of C.com not to have independent consultants.

Payments can be made via transfer to Bank account.

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  • What does working as an independent consultant mean ? Does X need to register a business in India. ? Are there any legal regulations stopping C.com from providing work to X without having him register an entity in the US ? Also what are the modes thru which C.com can make a payment to X ?
    – SK176H
    Commented Sep 19, 2015 at 3:50

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