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We have had an 'outsourced' designer on staff for the past 15 months. The arrangement seems very good for both of us. I'm with GreenGuy though; to me he's just an employee whom I don't need to pay employment taxes on. I don't care where he lives, the internet is global. The fact that he's in the Philippines is only a plus due to each country's individual economies. I get a great deal, and he lives like a king on what I pay him. I would however recommend that you work with and pay the employee directly, rather than use an agency, so that you are certain they are fairly compensated for their efforts, and not working in a sweatshop atmosphere.
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