Have worked with both arrangements. Much easier to deal with a US based LLC than anything that is managing payroll. For the contractor the LLC arrangement may end up being better, too because at least in the US corporations pay tax in arrears, and individuals have money withheld in advance.
> Except then you create legal issues, since there are likely legal issues with a company you run hiring another company you run.
For a simple business, this is actually simple (at least the US part of it). Revenue - Cost yields a very modest profit in the US so there's probably not going to be a lot of tax liability. Not sure what the nightmare is. For the group I used, their books were super simple in the US, and equally simple at home.
However, you need to pay tax in your country of residence still. You also need to file with the IRS for the corp indicating zero profit. Plus US registration fees.
You also need to maintain a legal paper trail i.e. the money coming into the US corp needs to be paid out to an international company anyway.
Admittedly, we're based in Australia, and there are Australia-US tax treaties that make the whole arrangement a bit simpler.
I've worked for american startups, and the contract/invoicing was through them
remote.com is another such similar service.
In my experience you shouldn't need to do this. In fact, I suspect doing this creates both a taxation and legal nightmare.
You should have a registered company (or any other trading entity) so you can bill as an independent contractor. However, it should be registered in your country of residence. Services like Deel exist specifically to facilitate this sort of arrangement, it's a breeze.
If you register a company in the US, you can't just arbitrarily transfer the money to yourself internationally. You'd need to pay yourself as an international independent contractor anyway. Except then you create legal issues, since there are likely legal issues with a company you run hiring another company you run. Additionally, by operating two companies, you're presumably filing two company tax returns, and paying yearly registration fees for two companies.