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Comment by slgeorge | Hacker News Reader

This works if you have a person(s) for a period of time. But, the longer they work for you 100% of the time, and the more team members you have in a jurisdiction the more likely the team members are to be considered employees and that you have established a business in the jurisdiction. At least in the UK the separate company and 'invoice' rule is important, but there are a number of other questions used to determine if someone is an employee.

As you note, the other big problem is that it places you in a very uncertain situation with labour law / labour relations.

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how can a remote country force me to open a local business entity? i am not there, so they can't get me. they can only get my contractors which would hurt them, not me. (the worst is i could loose them, and they'd be out of work)

the remote country would have to have an agreement with my country to be able to force me to change anything.

(the european union counts as one country here, so i am asking about the case where at least one party is outside)

greetings, eMBee.

Well it depends on whether doing things the legally correct way is important or not to you?

For a small team it's unlikely as the cost of enforcement outweighs the benefit. But as you grow the amounts become more significant and there are plenty of impacts of not doing things properly. Here are way this could impact a business:

* The business won't be able to legally carry out business (e.g. sales) in the jurisdiction because there'll be an outstanding court judgement or tax judgement against you.

* The business' auditors or professional company directors may either (a) ask you to keep money on your balance sheet to account for the outstanding judgement, (b) or refuse to sign-off your accounts.

If you refuse to tell them about the outstanding fines/judgement then you will be taken to have lied to them at which point you may be struck off as a company director. It's extremely difficult to find a professional finance professional to work for a business where ethical and reporting standards are not followed because they will risk being censured and losing their livelihood.

* You won't be able to travel to the jurisdiction (if you are a director/owner of the business) as you'll risk being put in jail/civil fine.

* The state in question can use international tax treatments and bring a court case or enforcement against the company within their main jurisdiction. Unlikely for a small company.

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