If you're paying a foreign person directly - you submit form 1099 and form 1042 and you withhold the default (30%) amount unless the person gives you a W8 with a valid treaty claim and tax id. If so - you withhold based on the treaty rate.

I'd suggest to clarify this with a licensed tax adviser (EA/CPA licensed in your State) who's familiar with this kind of issues, and not rely on free advice on the Internet or DIY.