[gustavo_duarte]

It is a much better set up if the overseas worker can set up their own company, especially in the case of Brazil. Then the US company does not need to worry about any of this, they simply wire (via SWIFT) payments monthly, for example, and there is very little overhead to the US company.

In the case of Brazil, the worker is also better off in this set up in general, as they'll end up paying a corporate tax rate, which will be much lower.

[polymatter]

In theory this seems like an excellent idea. But in practice its a bad idea, for the very same reason as doing this for all your US employees is a bad idea. Generally if a person works exclusively for a company on an ongoing basis then they are an employee in the eyes of the law.