If I run a web design service...is it legal for me to create the design in photoshop, show my client. Get their approval, and then have someone in India put the design in code? I would be sending them money via paypal or xoom. Would their be any legal issues by doing this? Thanks
Non whatsoever. I outsource loads of work to India. Obviously you cannot mislead people. I quite often close the deal on a psd and then say "right I will get my people to code this up as quickly as possible" their geographical location does not come into the conversation.
What about taxes? Paying people offshore US orignated money, but not having to pay taxes...I am talking about pushing enough websites that will make me 10k a month, and I would be paying out around 2k a month to offshore individuals..
You have two choices; Pay taxes on profit within your own geographical location or go offshore yourself. But there is no way of avoiding tax altogether; that's illegal.
You would pay tax on your profit/ income in the country you are based. You pay the people/ company gross and have them deal with their own income/ profit tax but make sure firstly the contract is clear on this and secondly the country you are dealing with doesnt have laws which state that this cannot be done. As said, nothing illegal as long as you dont claim that all the work is being done by you/ in your country etc. Some people will ask as there is movement against offshoring from consumers. The other possible issue is employees or not - you will need to check on your local laws but in the UK if you have a subcontractor that works exclusively for you the laws are being ever tightened in that the subcontractor must be handled as per an employee rather than a self employed person but as far as I am aware it is limited to subcontractors who are also in the UK.