If you put together a contract that states you will pay him 50% of gross revenue as advertising fees, then what is the problem?
I have no idea what you are doing, but could this business also face unexpected expenses? like a lawsuit, or administrative costs.
That's why these 50% deals as ideal as they sound often don't work out unless you setup a company where each is a stake holder with the corresponding %. There are so many unknowns. He lives in a communist country, where many don't pay taxes, and more to the point he may not even be allowed to do what he does, which is probably why he doesn't want to report it.
Great, 50% is ideal, but it's too much of an Utopia - you need to grow this as a business and set aside and accumulate some cash for a rainy day. And a true partnership would require key decisions to be made as to where the money should be reinvested, etc.
Since he doesn't want to give you a receipt you have to treat him as a contractor, and only pay 50% of what YOU make net. Why the hell should he make more money than you? So he wants all the 50% tax free and no risk, while you are put at risk, have to pay taxes, etc, etc, etc. This is NOT a good deal for you!
By the way companies like Google, Amazon, etc. pay advertising fees all the time to foreigners and I'm sure they are deducting it without being able to get an invoice.
But they DO make you "sign" an electronic contract, and they do require certain verification.
I would first check to see what do companies like Google and Amazon require from publishers before they get accepted in their program. And your guy will HAVE to provide at least that.
By the way is there a way to track what he's done for you?
i.e. is your agreement exclusive? Or could someone else also provide the same service and also get 50% from the profits they brought you?
If I were you I would do this
* setup an S-Corp
* workout a contract agreement that is NOT exclusive to that guy, so he is hired as an independent contractor.
* make sure that his profits are tied to his specific activity and that it provides for the growth of the business. i.e. only distribute 50% of net profits, not gross.
And if this guy doesn't want to do what's necessary for your business to operate, I'm afraid you are going to have to look some place else, otherwise the risks outweigh the benefits, and if you REALLY must work with him, then may be look into off shore company (although that always looked too complicated for me)
I have no idea what you are doing, but could this business also face unexpected expenses? like a lawsuit, or administrative costs.
That's why these 50% deals as ideal as they sound often don't work out unless you setup a company where each is a stake holder with the corresponding %. There are so many unknowns. He lives in a communist country, where many don't pay taxes, and more to the point he may not even be allowed to do what he does, which is probably why he doesn't want to report it.
Great, 50% is ideal, but it's too much of an Utopia - you need to grow this as a business and set aside and accumulate some cash for a rainy day. And a true partnership would require key decisions to be made as to where the money should be reinvested, etc.
Since he doesn't want to give you a receipt you have to treat him as a contractor, and only pay 50% of what YOU make net. Why the hell should he make more money than you? So he wants all the 50% tax free and no risk, while you are put at risk, have to pay taxes, etc, etc, etc. This is NOT a good deal for you!
By the way companies like Google, Amazon, etc. pay advertising fees all the time to foreigners and I'm sure they are deducting it without being able to get an invoice.
But they DO make you "sign" an electronic contract, and they do require certain verification.
I would first check to see what do companies like Google and Amazon require from publishers before they get accepted in their program. And your guy will HAVE to provide at least that.
By the way is there a way to track what he's done for you?
i.e. is your agreement exclusive? Or could someone else also provide the same service and also get 50% from the profits they brought you?
If I were you I would do this
* setup an S-Corp
* workout a contract agreement that is NOT exclusive to that guy, so he is hired as an independent contractor.
* make sure that his profits are tied to his specific activity and that it provides for the growth of the business. i.e. only distribute 50% of net profits, not gross.
And if this guy doesn't want to do what's necessary for your business to operate, I'm afraid you are going to have to look some place else, otherwise the risks outweigh the benefits, and if you REALLY must work with him, then may be look into off shore company (although that always looked too complicated for me)
!!