Hacker News Reader

Comment by andy_ppp | Hacker News Reader

Are there any startups attempting to sort out the tax situation when working from different places. It would involve a lot of figuring out with governments but as things stand I think being a digital nomad is going to be done semi illegally.

I would definitely sign up and pay my fair share to the correct jurisdiction.

View on HN

And not just for salaries, which can be handled with companies like Deel and Remote. For me equity is the bigger concern.

If I join a UK startup, best case scenario is paying 10% tax on the upside of any exit windfalls. If I join any company outside the UK, that immediately jumps to ~55%.

Nobody is going to do that are they, it's insane for tax jurisdictions to want to do this they are just doing themselves out of 10% rather than winning 55%.

It's hard to see how a startup could solve it without setting themselves up as a legal entity in each country they want to employ people. Which is the very thing they use Deel and Remote to try and avoid.

I think you're thinking too small. Someone with clout would need to talk to each government and get them to agree to a set of rules around this and consequent taxation. The alternative is getting no income from this, why not just make it clear and simple and make it make sense for each country.

I mean a lot of countries have visa programmes now if you're trying to build a startup so why not for digital nomads?

1. That 55% doesn't go in the trash bin, it goes to pay the schools your children will attend, the hospitals your family might need, the streets you use to commute etc.

2. It's insane for individuals to give up equity just to avoid 55% taxes. They are doing themselves out of 45% rather than winning 90%.

People will find ways around the 55%, I don’t see all the European founders at YC giving away 55% of their companies so there are loopholes, might as well just be straight forward about a fair taxation rate. 55% of a company is too much.

Yeah, in Sweden it's about 60% (56% taxed as income, plus capital gains tax on the difference if the value goes up).

A common solution is to use employers of record, intermediary companies residing in the country you want to hire in that hire the employee for you using local contracts. Then as an employee you can travel where you want, you will work under the laws of the country your contract was written in.

I'm surprised this isn't brought up more when talking about taking companies remote. Even in the US it's a huge amount of work to set up separate legal entities across different states to deal with taxes if you want to hire remote engineers across the country.

Multi-state employment can be quite complex and a lot of startups are struggling with it. I work for a company called Insperity that completely solves this problem (full stop) by taking on full responsibility for payroll taxes and a lot of HR related compliance issues. Some of our success stories include Netflix, Trulia, Workday, Buzzfeed, Hello Fresh etc. Anyone curious about this platform that enables remote work in any state is free to drop me a line--happy to discuss. zac.mutrux@insperity.com

For international, Deel does this from the employer's side and https://rebase.co/ does it on the employee's side.

Its not just tax its employment law too. If you're an employee in Europe you have a lot of protection, you can't just be fired, you need to follow a lot of laws. What US startup wants to employ someone in France with those conditions?

I just heard of Mosey, though I think they are focused on different states within the US (at least at first). https://mosey.so/

There are co-employers like Trinet, which allow a company to piggy back off their payroll infrastructure. So you have an operational employer and an HR, pay, and benefits employer.

Reply on news.ycombinator.com