Where or how should a foreign contractor be set up in QBO? Vendor or Employee?

I'd like to help you set up a foreign contractor in QBO, nancy-yang.

You'll want to use this 1099 vs W2 Employee calculator to identify if you'll set up the contractor as a Vendor or an Employee. 

You can also turn on your Multicurrency settings to pay foreign contractors. 

However, the option to enter the W-8 information is unavailable in QuickBooks Online. You can reach out to the IRS for instructions about the form.

Let us know if you have other questions. 

Can I transfer a contractor's pay directly into his account in Italy?

Can I make direct Deposits into a Contractor's bank account in Italy??

Yet another feature that QBO does not offer.