You are allowed to freelance through your sole proprietorship on standard , but none of the usual forms fits: not the W-9, not the W-8BEN, and not the W-8ECI either. For pay an individual earns from their own services, the IRS prescribes Form 8233 when a exempts your pay — and 30% withholding, reclaimed on your 1040-NR, when none does.
“I graduated from a master's program and am waiting for my OPT EAD. I set up a sole proprietorship and got an EIN for freelance work. A potential employer requested a W-9, but as a non-resident alien for tax purposes, I can't use it. What form should I use instead—is the W-8BEN correct? Are freelance contracting agencies usually flexible with this setup, or is it worth setting up an LLC with a US citizen friend to make getting work easier?”
Summary
You do not need to set up an LLC with a U.S. citizen friend to make this work. You can operate as a self-employed business owner on standard OPT as long as the work directly relates to your degree and you wait for your card to arrive. If you later apply for a 24-month STEM OPT extension, this changes: DHS rules do not allow sole proprietorships or self-employment on STEM OPT.
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Why W-9, W-8BEN, and W-8ECI are all wrong for you
As a non-resident alien, you cannot use Form W-9. That form is for U.S. tax residents.
Form W-8BEN is also the wrong form. It covers passive income such as dividends, interest, or royalties — not pay for work you perform.
Form W-8ECI looks right, because freelance earnings are . But the IRS instructions for Form W-8ECI directly exclude your case: a nonresident alien individual claiming exemption from withholding on compensation for personal services must not use W-8ECI. The instructions point you to Form 8233 or Form W-4 instead.
Form 8233 only works when a between the U.S. and your home country exempts pay for independent personal services or business profits. If no treaty applies, your client is required to withhold 30% of your pay, and you file Form 1040-NR at tax time — anything withheld above what you actually owe comes back as a refund.
You asked if agencies are flexible or if you should form an LLC with a U.S. citizen friend. You do not need to change your business structure. A sole proprietorship is perfectly legal on standard OPT. Forming an LLC with a friend does not bypass the tax rules for your share of the income, and standard OPT already allows you to be a self-employed business owner.
Next steps
Follow these steps to legally freelance on your standard OPT.
Wait for your EAD card and start date
You cannot begin any freelance work until you physically have your card and the start date printed on it has arrived.
Make sure the work matches your degree
Operate your sole proprietorship by taking only freelance contracts that directly relate to your major area of study. You must work at least 20 hours per week to avoid accumulating unemployment days.
Check your country's tax treaty
Look up whether your country's with the U.S. exempts pay for independent personal services or business profits — IRS Publication 901 lists every treaty. If it does, give your client Form 8233 instead of a W-9. You need an SSN or ITIN to file Form 8233.
Without a treaty, expect 30% withholding
If no treaty covers your pay, your client is required to withhold 30% of it. File Form 1040-NR at the end of the tax year to report your business profits — tax withheld above what you actually owe is refunded to you.
Legal sources
The rules for OPT self-employment and non-resident tax forms come directly from the IRS and the Department of Homeland Security.
IRS Instructions for Form W-8ECI
Individuals paid for their own services cannot use Form W-8ECI — the IRS points them to Form 8233 or W-4 instead.
Do not use Form W-8ECI if: You are a nonresident alien individual who claims exemption from withholding on compensation for independent or certain dependent personal services performed in the United States. Instead, provide Form 8233 or Form W-4
IRS — About Form 8233
Form 8233 is the form a nonresident alien uses to claim a treaty exemption from withholding on pay for personal services.
This form is used by non resident alien individuals to claim exemption from withholding on compensation for personal services because of an income tax treaty or the personal exemption amount.
IRS Publication 515
Without a treaty exemption, whoever pays a nonresident alien for services must withhold tax at a 30% rate.
You must generally withhold tax at the 30% rate on compensation you pay to a nonresident alien individual for labor or personal services performed in the United States, unless that pay is specifically exempted from withholding or subject to graduated withholding.
Study in the States
F-1 students can start a business on OPT, provided the business relates to their program of study.
The U.S. government considers starting your own business in the United States, also known as entrepreneurship, as work. Therefore, if you are an F-1 student who plans to start your own business in the United States, you must qualify and apply for OPT. The OPT, and thus the business, must relate to your program of study
SettleKit is not a law firm. This is general information, not legal advice. Always confirm your tax and immigration status with a licensed professional.
SettleKit is not a law firm. This is general information, not legal advice.
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