Ask HN: What prevents a company from hiring remote employees internationally?

I've done this, it's surprisingly complicated. Here are some of the issues I've run into.

* Payroll: how do I pay you, what's the frequency of payment in the region, how do deductions work, is overtime a thing?

* Working time: how many hours, how do I monitor the hours, do I have to give you breaks, do I have to document the breaks?

* Data protection: how do I ensure it, how do I send you the equipment you need, what happens if your device becomes non-compliant?

* Health Insurance: Does your country need it? How much does it cost? How much do I need to monitor it?

* Corporate law: by hiring you, have I established a legal entity in that country? Do I need to make a permanent entity in your country? How does profit attribution work in your country and what are the tax implications of hiring you?

* Personal taxes: Does your country and mine have some sort of double taxation agreement? What about social security type agreement? Who do I pay? Who do I tell that you are working there? What identification numbers do I need in order to tell them you work for me? How do they know who I am if I don't happen to have an entity in that country?

Honestly its just not worth the hassle for most situations. It's expensive, hard to do, complicated and creates all sorts of really difficult to account for edge cases when writing policies or attempting to enforce rules.

most countries have some kind of "small business" type entity that the employee can create and you are left to deal with Data protection only. It's a B2B relationship.

Sure but that's hiring contractors and wasn't how I read the question.

But this is probably the solution, until international laws are more unified/interoperable.

It's true, and that's how many companies do it. But in fact it is illegal to hire a person as a contractor when they are de facto an employee in many countries...

yes, the rules are different from country to country. Worth looking into it.

In my understanding, it's not that it's illegal to hire a person as a contractor, it's just that it can be re-qualified by a judge as an employee, if some working conditions are met.

For example in France, which is known for its labor code that protects employees much better than other countries, here are some conditions that can lead to this: - Proven relationship of subordination - The contractor is only working for your company - Poorly written contract (specifically, obligation of means vs obligation of results)

Sham contracting is indeed illegal in the criminal sense in some countries. Either outright, or by consequences like failure to withhold tax according to law, or otherwise evading the burdens of employment law, if the facts indicate that was your intent.

only if the company in question has a legal presence in the country and is actually able to hire you as an employee. barring that, for international remote work, freelance or contracting is the only possible arrangement (aside from using some local service company that hires and then resells your work, or some treaties between the two countries to handle cross-country employment (like all EU countries))

In France you can't hire somebody as a Freelance if you are actually his/her only client, the regulators will say you have too much power over that freelance and that she/he should be re-qualified as an employee.

I think we had similar rules and then they relaxed the rules in my country. It's a points rule I believe: if you have more than x criteria (you work at your location, you use your own equipment, you have more than one client and so on) then you are a "company" otherwise you are a employee.

You sort the rules out via contract enforcable in whatever negotiated jurisdiction (yours or theirs). You send payment via Swift. Be mindful of USA sanctioned countries like Iran.

The contract would have to replicate almost the entire contract law of the host country if they wanted to go down this route. It would be very hard to write that contract then keep it up to date.

I disagree. Payroll, data protection, working hours - all things that go into a normal contract plus an enforcement mechanism/agreement.

If they don't work out you just fire them. It's more to give them peace of mind for them to sue you if you don't pay them.

I don't need to know anything about the host country as long as I don't violate sanctions. The idea is you have an employee contract sets out what you want and how much you will pay them, and say nothing about where the employee is allowed to live.

This seems like a US centric view?

If you are an employer in the US then the US government will care very much about not violating sanctions.

The relevant local government will however care very much about full compliance with HR and tax law. And in an employment situation the employer has those responsibilities. (They are mitigated in a B2B contracting situation.)

As an example, even something like pensions is fiendishly complex nowadays. In the UK we have mandatory enrolment and the numbers you have to pay are a function of income tax and national insurance. Calculating the right figure from Delaware and codifying it an employment contract sounds intimidating enough alone.

I am not one for unnecessary risk averse beuracracy either, but I can understand why companies don’t want to touch this. It’s a minefield.

Incidentally, I suspect it’s a big reason why the Accentures of the world are as big as they are.

It's really not that simple. For example in france the government takes income tax and other social contributions directly from the paycheck. As the employer, it is your reponsibility to pay the french government some corporate tax on top of those taxes, you can't make the employee pay them for you. A solution would be paying directly a french company, for example one that the employee ows (as a self-entrepeneur, for example), but you can't ask that of potential hires. Of course, it's "easy" and well documented so you can figure it out for france, but you can't spend that much time doing that for every country especially when dealing with countries that are much less internationaly navigable.

Other than "Working time" and "data protection", the rest are actually pretty easy. Just use an employer of record like Remote

At $599 a month per employee. I also still need the answers to all of those questions per country, even if Remote is the company handling it.

Well yeah, but that includes things like their benefits package, which you'd typically be paying domestically otherwise. $7200 per year of administrative costs doesn't seem that high to be honest. Less than 10% of the average employee's salary, and the "fully loaded" cost per employee, hired domestically even, is usually much higher than $7200 per year (granted, that may include office and office admin fees for non-remote companies)

These services help some issues but don't solve all of them, just a few off the top of my head:

Legal differences can be significant - for example, in France it may be difficult legally to ask an employee to put in more than their contracted hours compared to another country where this could be very normal.

A recent example in the news is the Twitter layoffs - in the EU they may have enacted layoffs that aren't legal there but are perfectly legal in the US.

Taxes in different countries can mean there's a significant difference in the difference between the amount an employer pays and the employee receives per country. Sometimes it's negligible enough for the employer to foot the bill, sometimes it's large enough they may need to pass on the difference. This can get even more complicated when share options come in to play.

If you are responsible for this it all really starts to add up, ultimately the more countries you employ in, the more cognitive overhead which can impact an organisation's agility (or require them to take more risks).

I agree with this, but I'd like to point out that the Twitter layoffs were likely not legal in the US either!

The difference is that Twitter is likely to be bankrupt by the time any American lawsuits get resolved.

Fair point!

There are some SIGNIFICANT downsides as an employee to using an employer of record. It's another example of companies reducing employee rights and outsourcing risk and responsibiility.

1 - No equity. The legal company structure prevents you getting equity in the company.

2 - Significantly reduced employment rights. During the current waves of layoffs people employed through these type of arrangements found they had significantly less rights than normal employees, primarily due to fewer people being employed this way did not meet the usual thresholds for redundancy planning and payouts.

A friend of mine employed through an employer of record was "made redundant" and was offered exactly zero notice, severance or payout. When he tried to negotiate they effectively told him to sue them, knowing it will take significant time and legal costs to bring forward a claim.

In many jurisdictions you don't even need to sue; you can file a complaint with the labor board.

which is no different from any international remote work. employee protection does not work across borders unless there are specific arrangements involved (like within the EU).

From my experience if you want to have job opportunities on the global scale, you need to be a contractor. That means you have your own legal entity (a company, for example) from under which you invoice clients (the employer). You'll have to pay and figure out taxation on your own, obviously, and other things related to running a company wherever you are based, but employers don't have to deal with your taxes and other benefits - they just have to pay your invoices, which can be done globally just fine.

Source: I'm a contractor for over 5 years now, working for companies across continents.

That's my ideal set-up (I was also set up as a contractor for 5-ish years).

Was it difficult for you to convice companies to take you on as a "contractor" (legally speaking)?

Not at all! In fact it's always assumed that I'm a contractor given I apply from a different country. Could also have something to do with me doing Clojure, which is quite a niche, and I think most Clojurians are contractors.

As a peer comment says, the risk with this is treating a de facto employee as a contractor.

In the UK we have a law called IR35 to prevent disguised employment. If a US company hired a UK based citizen and acted in breach of IR35 then the employer would be liable.

In reality it would be hard for tax authorities to enforce, but I think it would be enough to scare off the employer.

Nitpick, but I don't think this is necessarily correct - if the end client has _no_ UK presence, then the "old rules" apply for IR35, i.e. the contractor is responsible for determining their own status.

If the end client has some UK presence (a branch, etc), then yes the "new rules" apply and the end client is responsible for determination.

I’ve been doing this in Sweden on and off for 20 years, in between jobs or entrepreneurial endeavors. I’d like to go fully remote and completely global though.

Already have a Swedish limited liability company (“aktiebolag”) but thinking about relocating to Estonia, Ireland or Malta. Do you think it matters what jurisdiction you set up shop in?

One thing I’ve noticed is that Swedish startups in general like to hire people as employees because they think that increases the value of their companies more. Is this something you see internally too? If so, how do you get around it?

Some companies prefer regular employees period. In a recent experience a prospect employer cited restrictions to accessing client data: that they have a contract with clients that forbid making their data available to other companies, and this unfortunately includes freelancers.

As to where to set up shop: wherever it's easiest for you. You still need to comply with the local rules, file reports and what not.

I'm an Estonian, and live in Estonia, but have a Wyoming LLC (USA company), and currently am contracting for a Finnish company. So far nobody has cared that I have a U.S company, and with Wise (formerly Transferwise) you can easily get an EU IBAN for a USA company as well. Reason for me doing this as opposed to a Estonian company was taxes. As a non-resident company owner in USA, with no office or employees there, I owe no tax to USA, so I really only have to pay income tax based on where I am - which for Estonia is 20%.

I do not contract for local companies in Estonia however. They always expect me to become a local employee, which is not in my interest, and there also aren't any Clojure opportunities here, which I specialize in. However contracting for foreign companies has never been an issue because being a contractor is assumed if applying from a foreign country, at least for Clojure developers.

Interesting... I thought the tax system was pretty sweet in Estonia. Why don’t you just use an Estonian company and pay yourself mostly in dividends (taxed at 20% IIUC)?

If I have an Estonian company and I want to pay myself a salary, I lose around 55%. Pension is mandatory, public healthcare is mandatory, and they take huge chunks of the %. Now you might ask why don't I want to pay for the pension, or the public healthcare, well it's because the pension fund effectively loses money with its ~2% yearly interest rate, so it's like putting money in a fire, and the public healthcare is really bad in Estonia, especially for 30%. To put that into perspective, if you make, say, 5000 eur per month, then 1500 of that goes to public healthcare, every month. Private healthcare that offers much better service, and much more coverage, is around 150 eur per month. The difference is literally 10 fold in terms of cost, and the quality is mountains different.

Now however if I have a U.S company, or really any foreign company, I can then pay myself a salary without these mandatory payments to the government (except income tax, which is 20%) and I can use the 35% that I'm saving on getting myself a private healthcare and investing money with a much better return than 2%.

Re: dividends, they are not as flexible as management salary, which I can pay in any amount, at any time, and as many times as I want. Which is what I do now, with a foreign company.

So, I've been thinking of registering a limited company for some projects of mine, so that I can have a "portable legal identity", and I was mainly considering either an Irish or Estonian company (I am Irish, but i don't live there anymore).

Is a US company a good alternative? Did you need to have some connection or representative in the US to open one?

You need to have a legal agent in the US, but there are plenty services who offer that for you. I personally recommend https://wyomingllcattorney.com/ if you want to set up a company in the U.S. You do not ever have to physically go there, and the whole process from start to finish took me about a month, of which 99% was just waiting.

as a contractor, the OP points stay the same, it is extremely hard to get customers

In my personal experience, and through my network of friends/former colleagues, it's incredibly easy to find work as a contractor - in the UK at least.

I've never met a contractor who was short of contracts and options. There is pretty constant demand. Most of my contractor friends work 8-9 months of the year, take an extended break, then when they are ready for new work will land a new contract within 2-3 weeks at most. Totally normal to land a new contract within a few days.

Is this because of the kind of specialities they focus on or their connections? Also do any of them work from overseas?

yes, if you are from an english speaking country you probably don't have issues, I work with the most popular stack and still have very few opportunities, but poor networking skills definitely also play a role ...

I'd actually say that working with the most popular stack could be the reason you don't get many opportunities - because you have so much competition. I work with Clojure and 8 out 10 CV's I send result in interviews, and I've never looked for a job more than a few weeks tops, simply because there isn't a lot of competition. I'm from Estonia.

yea, I considered it but I had even less luck with more unpopular stacks, maybe Clojure is the sweetspot

Getting customers from abroad is tough in my experience as well. Have been doing contracting with a Swedish private limited company (AB) for soon ten years. Had many interviews for foreign companies, most within EU, but I have always fallen short, despite that it should be really easy to employ. Within Sweden, though, I have never had an interview that did not lead to an offer, so the national borders really matter in my view. To me, the reason(s) is/are unknown.

I concur.

Having worked remote across countries for a year now, the simplest solution was to contract and invoice. This makes the interface to your employer a lot simpler, but you have to learn your country's tax system, do basic accounting for your company. When you're used to having your employer's salary department handle this, it can be a little daunting at first. Ultimately, becoming a small business owner may benefit you in the long run, or you may realize that the extra book-keeping is not worth the hassle.

Totally agree and Estonia e-residency program is a great way to do that. But that doesn't solve all problems mentionned by the op

- timezone : I have worked and converted companies to global remote. It is surprisingly flowless and often leads to increase in productivity. Yet, most companies are afraid of "not enough facetime"

- employee "ownership". You can make your contract very similar to an employment contract (working hours, copyright ownership...) but most companies want "their own employees". It's a culture thing that I think is linked to perceived loyalty and subordination

- perks and benefits. Most companies think they are cool because they offer a lower salary but plenty of free lunch, gym membership, insurance... you can't put that in a contractor's contract

Interestingly enough, when I was working with JavaScript and PHP, this was very common. Companies that like to "own" their employees, remote work was seen as bad, flexibility was zero. Then I moved away from the mainstream tech, and I no longer have any of this. I'm now treated with respect, I get paid well, I'm 100% remote for many years already. It's funny how companies take you for granted when they can replace you within a day, and treat you well when they can't. That's why I recommend people to take up something that isn't done by a lot of people.

Oh and, as an Estonian myself, I do not recommend e-residency. If all you want is a company, then the e-residency is one of the worst ways to go about it. In terms of cost, flexibility, taxes, etc.

Closure ? Why not, never thought it had a big demand for it. I was a perler for a while but demand dried up ;)

As for e-residency, I guess it depends on your situation. As a resident (expat) of a country no sane company would do business with, with no bank transfers possible, setting that up was easy, cheap and saved my business. I don't want to evade taxes, just be able to do business, and it does serve that purpose beautifully

How does the e-residency help? You would have to live in Estonia, otherwise an Estonian company will get you just additional bureaucracy. Your one-man company will be taxed based on where you as the company owner reside, not where the company is registered.

Assuming you're somewhere else in the EU, that is. I don't really know how the rest of the world would see this setup.

If you're in the eu, us... just setup your business there, off course. It's not a tax evasion thing. But if your residency is an issue, the program provides you with a safe heaven to do business. You still have to pay taxes of course, including income taxes in your country of residence

> - Lack of legal presence. Having no legal entity in the country you're hiring in is a non sequitur, and setting up a legal entity per-country-per-hire is not scalable (beyond setting up the entity itself, you need to be aware of local labour laws, your tax obligations, insurance, etc.) I think Deel (https://www.deel.com/) has already solved this.

Just to add that Deel costs are from $599 per contract / month, so I wouldn't say that this problem is solved, especially for a startup trying to hire abroad.

It's from $50/month for contractors, and from $599/mo for employees.

Does Deel maintain a legal entity in every country or they subcontract to other legal entities there?

I believe they maintain a legal entity in countries they're operating in.

I was a "Deel employee" and they operated through the same name.

Yep! We've spent the better part of the last 2 years building out the infrastructure and all key stakeholders in house in every country(Lawyers, Payroll, Accounting) and have entities in most places now. We still work with partners in China but hopefully we'll have the full legal set up and licenses there soon!

I am currently employed through nhglobalhorizons but they have subcontracted the legal entity in my country to a different company.

Let's change this and get you on Deel!

We've "dealt" with "Deel" and I agree, it's definitely not solved. From high prices to unresponsiveness to missing answers to specific questions etc. (we evaluated a bunch of providers but that was over a year ago so I forgot the specifics)

Also, it's different for employees if you're not employed with your "real" company.

Sorry you felt our responsiveness wasn't there then! We've scaled quite a bit, happy to show you how much progress we've made since last year if you ever need. I'm at alex@deel.com

We use Deel and have employees and contractors in 9 timezones. We are a fully distributed team of 23 people. Deel has been a lifesaver in terms of abstracting away a lot of the compliance and payroll issues. I am a huge proponent.

Deel owns most of its entities in its 150+ countries (it used to be less, but they have built out there network a lot in the past year or so).

$599 is not a bad rate, considering all of the overhead to setting up an entity, benefits, and hiring a regional manager than can deal with all the local stuff. You have to get to a good 15-20 people in a specific country before it makes sense to switch to your own entity.

EDIT: One thing that Deel does _not_ solve is visa sponsorships. They only do this very rarely AFAIK.

Thanks so much for the shout out! We actually do visa sponsorships now in over 30 countries if you ever need it, ping me.

Taxation is the main problem, and lack of legal presence is related to it. Other than that, your list looks good.

There are companies who have presences in many countries. I once worked for a US-Canadian company from Scotland, so they hired me through their London branch, although the person that was officially my manager wasn't the person I reported to.

There are specialized "middle man" companies that exist purely to make your arrangement tax-compliant.

In the UK, there is an additional regulatory problem called "IR35", which is about working as contractor for the same client for too long, so you would be treated like an employee. This is only an issue if you go the contractor route, which is financially attractive as you may get GBP 450-GBP 1200 a day there, depending on experience.

Sometimes, contrctors found their own limited liability corporations, which makes some issues easier, but doesn't resolve everything. The hardest part for the employee side is finding a competent tax advisor knowledgeable with international setups.

Regarding the time zone, this is both a pro and a con, depending where the other team members reside. I've been in GMT+0 working with US and Asian teams so sitting in the middle makes you an ideal communication hub between sites that have difficulties meeting at humane hours.

Trust / Culture

US startup. We tried hiring remote in India and eastern Europe. The biggest hurdle was the culturally implied expectations.

I mean India outsourcing doing a bad job is a cliche by now. But that was precisely our experience. The available remote freelancers in India didn't seem to share US values of what constitutes acceptable quality. Even with reminders to deliver US quality, their work was often on a level where a US employee would have been ashamed to call it "finished". But they happily "solved" those tickets.

Also, there were so many intermediate translators and managers that at the end, a rural US grad student was similar in price to an Indian freelancer in one of the IT hotspots there.

But mainly, that difference in culture leads to a lack of trust. I wouldn't let Indian freelancers interface directly with US customers because I know that their definition of a solution doesn't overlap much.

I work for a US company in the EU. Our team is shocked by the US teams’ idea of quality tbh

(They view us a little bit like the outsourced hired help)

It's worth reading through Gitlab's public handbook which covers all of the company's operations including how they deal with remote employees.

As you can see they have a subsidiary in each of the countries in which they hire:

https://about.gitlab.com/handbook/people-group/contracts-pro...

Fully agreed. GitLab's handbook is required reading for all remote companies, IMO. I did a small "case study" of how they operate & mirrored some of their processes.

There are a bunch companies with an "open handbook" philosophy, they're definitely worth a read. One of my recent discovery is Airbyte's [0]

[0] https://handbook.airbyte.com/

I think it’s mainly taxation and the legal issues.

Tax should not be an issue if you are paying someone as an independent contractor. Their tax arrangements are on them.

If you have an employment arrangement however, then you begin to hold responsibility for ensuring that local taxes are paid. You need local payroll, relationships with tax authorities etc.

Legally, again you are mitigated somewhat if you use a B2B contractor relationship, but HR, Data Protection and liability rules are going to be complex and risky for the hiring entity. Imagine if you misunderstand vacation or pension rules in Timbuktu and find yourself in a lawsuit with an aggrieved employee.

I think you listed most of the important issues.

From a company standpoint, being fully-remote is already a non-conservative approach and minimizing risks by only hiring in a certain region makes sense. Your talent pool will stop being a constraint anyways so why add more complexity.

One more thing I'll add to this list is culture and language. Even if on paper everyone speaks English, communication is much easier when everyone speaks the same accent / dialect / local non-EN language.

> One more thing I'll add to this list is culture and language. Even if on paper everyone speaks English, communication is much easier when everyone speaks the same accent / dialect / local non-EN language.

Accent consistency isn't the case even if you're hiring from only one country. The level of English is a legitimate concern but expecting everyone to speak the same accent is weird.

taxation, one needs to have a local entity that is the employer of record and pays all local employment taxes (either that, or the employee establishes a one-person local company that sells services to the remote company). Each country will want to collect its taxes (and sometimes the remote country will also want to collect taxes). Each country is different, and tax treaties vary between each pair of countries..

1. Timezone - I think you need a strong documentation + asynchronous work culture. Less pair programming, more Jira.

2. No "human" touch - just make Zoom calls and drink beer.

3. Difficult to figure compensation scale - I wouldn't bother with CoL. just pick a floor and see who you get. You are fishing globally.

4. Lack of legal presence - this matters if you generate sales in the same country that you have contractors. Tax office will prefer a local entity that files taxes. The labor office will probably pressure you to hire contractors as local employees since you have a local entity. Employees may get taxed more brutally than as employees.

5. Compliance & regulations - I guess your ops people should be in home base. and I guess get your devs to develop code using dummy data. I guess if the code touches HIPAA-ish data, remote work does not really work.

I would mention cultural differences as well. Management styles differ widely over the globe. I once worked in a team where the manager was in one country, and most of the team in another on a different continent, and the different approach to working made it very hard to set and meet expectations (in both directions).

I'm keeping it ambiguous on purpose, since I'm not putting any approach over another, but it helps if the manager and the employee are on the same page (or at least in the same chapter) wrt work culture.

That's indeed a huge one. Learning to manage differing management & working styles is challenging especially when you don't have the cultural context. Do you mind sharing how your team/leadership navigated it?

Badly. I left after a year, though not just because of that issue.

Hey! Thanks a lot for the shout. I’m Alex, one of the founders of Deel. We’re a 2,000+ team across 85+ countries, so we certainly have quite a bit of experience in this department. We also have over 10,000 customers, ranging from startups to big corporations.

Many companies we talk with usually mention your key point here. Another crucial one we often see is businesses need help knowing where to start or are intimidated by the idea of doing something wrong.

I’m a bit biased here, but I think we’ve certainly solved most of the other issues you mentioned. We connect people with tryroots.io, tackle salary bands with https://www.deel.com/salary-insights, and handle compliance/payroll/local entities with our core product. There’s still work to do, that’s for sure. However, it’s our mission to democratize global hiring and simplify the process so companies can get started with complete confidence and know they have all the tools needed.

Things got 100x better over (maybe even more) the last two years, and I’m sure they’ll improve over the next 10+.

P.S. If you want to help us make it happen, we are hiring!

Source: originally from Hungary, lived in London for 6 years, moved to San Francisco 9 years ago. Have worked for US corps from London (as consultant); have been sitting in hiring positions for last 3 corps in US. Things which aren't salient from outside the US, but play major role in hiring non-specialist/non-contractor full-time employees:

* Cultural integration to generally to the US, and specifically to the US way of doing business. Except for a few rare cases, software is ubiquitously embedded in the culture that requires such solution. This has a _lot_ of non-salient culture-domain-specific parts that nonetheless comes as second nature to peeps growing up here. For example -I'm implementing a module that requires accounting for eg income tax brackets. A person from the EU would fire an email to product asking what these are. Here we come to the "US way of doing business", moving fast: a senior US sw engineer at a startup is enabled, and expected to do whatever it takes to drive things forward. So, the right move is to go to IRS website, look up the table, write an implementation, and note to product to double-check it.

* Related to this, "extremely remote" (different timezone + different country) requires a degree of autonomy, requires a level of trust, that is very difficult to build over videoconferences alone. Most successful "extreme remote" I've seen always added at least a weekend of flying peeps into retreats, doing mindmelt.

* The issue of trust: US is a high-trust country; it is default expected that everything you say is true, and you're not omitting materially relevant facts; and there are severe (but only country-wide) consequences of getting caught. For international peeps, trust level is highly varied, with very limited ability to enforce.

These are the top-level bits on making hiring decisions, and the root causes why none of the items on your list are being addressed.

I hope this doesn't become any easier because companies will hire very cheaply in poorer countries. While that in itself isn't a problem, the company exists in a specific country and is allowed to do so onlh while it isn't hurting the local public/economy. Not only will it bring about an end to stuff like H1B immigration but it also means they will hire in the country with the worst labor laws and cheapest labor.

Every country should require:

1) companies to have local taxable legal entities before they can hire remote workers 2) Pay remote workers above the minimum wage and similar salary as non-remote workers of their local country 3) incur a reasonable tax penalty when prioritizing offshore remote talent

That way everyone gets paid fairly, taxes are paid nicely and remote offshore workers are hired only when there truly is no better local candidate, not simply because they are cheaper and can be exploited more.

Just of note, there are some countries where it’s very easy to work remotely from.

Eg UAE- specifically Dubai, with its virtual work visa [1]. Only thing you need to provide is healthcare (you must buy a Dubai-specific healthcare policy) and everything else they don’t care about. Your outside-UAE employer can treat you however is permitted by their local laws.

Also note: if you’re not an American, and aren’t tax resident in America, but are working for a US company while not physically in the US, the IRS simply doesn’t consider you employed. So truly no tax.

However if you are in UAE but working for a UK company, there is still some tax to pay (National Insurance tax).

1. https://u.ae/en/information-and-services/visa-and-emirates-i...

- Security and trust. Our ISO27001 process requires that we run a background check before people can log in to systems. Locally, you have known places to do background checks. Internationally it is more difficult.

- Monoculture. While diversity is valuable, monoculture teams generally run teams. Banter is easier (less likelihood of people being offended), relationships between team members form easier (collegues become 'friends'), conflict is easier to resolve. Never mind different regions around the world, it can be difficult to integrate different genders or ages into existing teams. This especially happens when team members get to interview candidates, they will (subconciously) favour people that are similar to themselves. When you have limited management skills or time, a smoothly running team is useful.

I work as a contractor. None of the things related to legal employment matter in this case, I pay my own taxes, care about all the legal stuff, insurance etc. Switched 3 jurisdictions this year amid war, and for the company wasn't an issue, we just sign a new contract with the new legal entity in the new country. This can be tricky in some countries due to their laws (like aforementioned IR35 in UK), but it's usually all on contractor, not "employer".

Btw, I hate those companies which post their jobs as remote, but turns out it's "US only remote"

You list major barriers around legal presence (the cost of deel) and compliance, what more do you want?

Are you setting yourself up as a local company and just selling yourself as a consulting firm (or using an umbrella firm), or are you an actual employee?

Are there any tariffs in engaging your firm? OK if you're remote in Germany and working for a Canadian that's probably OK, but if you are based in Cuba or Iran would that be a problem.

Lets say you incorporate in Delaware (or work for one based there), does the firm fully outsource the risk to that consultanting firm, or is this like if I employ a contractor who then pays a bribe I'm still liable.

Is that firm large enough and trusted enough (Cognizant, Accenture, Infosys etc) to take that risk?

What if you live in North Korea? Or China? Does an employer want that risk that the government will be able to interfere?

OK you might think that's OK, but how about Kablankistan? Are you confident they are free from pressures from locals (perhaps who are working for China/Russia/Your Competitor) in the same way someone working in the UK or Canada is?

How about Australia, where the government can compel your employee to insert a backdoor into your product.

On the other hand you claim that compensation scale is important, but surely if the work is being done the local compensation doesn't matter. People get paid massive variations for nominally doing the same job even in the same office.

The value proposition that US tech workers (in office and remote) have is they are literally 100 times better than a worker in a code factory in India. That's either right - in which case it doesn't matter if the worker is working remotely from Oregon or from India (setting aside the timezone issue you already discounted and the legal and risk issues mentioned above), as long as the value you're getting is enough.

If I have two identical candidates who will do the job just as well, it surely doesn't matter if they live in NYC or Buffalo (or other factors aside in NYC or Naples), I'd pay the necessary compensation to get one of them to work for me and keep them happy so they don't leave.

> You list major barriers around legal presence (the cost of deel) and compliance, what more do you want?

Exactly what you posted :-)

I have rough thoughts. I'm curious about other people's thoughts, experiences, and opinions. Hence "Ask HN"

Thanks a lot, you've given me some nuggets to think about.

There are probably also legal risks. The company does not want to hire lawyers to figure out the contract and copyright laws in a foreign country. But, it also does not want to find out that he retained some right to the code he has written and may have some valid claims to it after being let go etc.

This can also hurt due diligence when selling out or having the next investment round. For example, I was once working remotely in a US startup from Poland and they promised me stock options, but later rescinded it, citing the lawyers as the reason (I got a raise instead).

Contracting sometimes bypasses this, but it's not foolproof for all countries.

In South Africa if you derive >80% of your income from one contracting client, they're obligated to treat you as an employee (with all the benefits and complications that that brings). Technically speaking, for international companies this would mean they have to set up legal shop in the country. This is not easy to enforce and the tax man mostly just wants his dues, but it is something to be aware of.

Now multiply that intricacy with that of every other country you consider hiring in.

I set up a business entity, the USA company pays my business entity just like they pay Stripe, AWS, etc. I pay an accountant and deal with all the regulations myself (I live in Taiwan).

Its a bit more hassle, and I technically have less protections (e.g. No mandatory vacations, severence etc), but USA pay is more than double Taiwan pay for the same position so it was an easy trade off for me.

For anyone who wants to work for an international company in a different country I recommend just biting the bullet, find a CPA in your area and just pay them to help you.

I think the lack of legal recourse if somebody behaves unethically / illegally could be an issue when it comes to more obscure jurisdictions. We don’t think about it day-to-day but a lot of the trust between employer/customer and employee/contractor comes from the fact that the former can make life hell for the latter if they do something really crazy (like upload the code base on Pirate Bay).

If you have a contractor working from the outskirts of Timbuktu, who do you call if they go completely rouge on you?

I think I'm going off on a tangent here as I'm seeing it from a digital nomad view, but it's worth saying.

Find a third party contractor that looks the other way, not caring where you are physically as long as you have an 'in country address and bank'. They take a percentage, and you can work remotely from where ever you like. If you don't have a bank or address in the same country as your employer things get more difficult.

We had this, for an employee that wanted to move back home to Poland.

We used remote.com, they charge a sizable fee (like 600 quid a month), but the net costs come out about even after considering other costs. You still have to pay for the whatever the local countries requirements are for e.g: holiday pay, sick leave, redundancies etc, but I think it's a decent system.

I suspect the costs will come down quite quickly as it scales/has more competitors.

We are trying to do it, and the single worst blocker is social security. In most countries you have to deduct social security and healthcare from the paycheck, but the setup is different for each country, and often doesn't work at all without a legal entity in that country.

Of course you can outsource that (so called employers of record) or hire people with freelancer contracts. But just hiring locally is much easier

More often, its better to hire a contractor, rather than a remote employee, if you are hiring across the world internationally. It's a lot more convenient taking into account tax, payment and not having to match every other employee benefit outside your operations region.

Mostly compliance.

"Compliance" is the catch all term for "not doing something awry of someone's law just in case they come after me".

They're worried about unknown unknowns, and it's a ridiculously complicated area. Not just tax, but things like health insurance and pensions and employment law.

For instance, a US employer expects to be able to fire an employee at will. Few other countries allow that. So it creates uncertainty: if I need to fire them, what would I do?

It's far easier to just avoid it all by saying "Remote, US only".

This area of law also has more of a "rule of man" rather than "rule of law" feel. Tax law is a constant moving target, and even a tax professional can't say 100% what would happen in the many gray areas. It's a crapshoot.

So most employment is done only where the employer has a company in the employee's jurisdiction, or via quasi employment where the employee is actually contracting via another company (either their own company or an EOR).

The short of it is that employment in the 21st century has massive government involvement, there are hundreds of states in the world, and therefore there are enormous permutations of employee and employer country pairings, each with unknown unknown compliance consequences, and therefore most employers don't want to wade into that.

Having no legal presence is not a non sequitur. Employees in other countries know that it's a lot harder to engage council to enforce employment agreements or ip agreements from a whole other country. It definitely adds risk.

You're right.

> It definitely adds risk

From other comments such as badpun's [0] and ohadron's [1], along with yours, it looks like this is all boiling down to risk + unknowns vs reward.

I wonder if we can make the unknown unknowns easier to manage so that it mitigates the risks involved somehow.

[0] https://news.ycombinator.com/item?id=33997059 [1] https://news.ycombinator.com/item?id=33997049

Law and taxes regulations + timezone. And sometimes regulations.

Local Tax and Employment law

If you use deal is pretty easy but it puts a premium on top.

Long time ago I was working for UK company who was hiring for remote roles around Europe. This was pre-GDPR era and it worked well both for the company and for the contractors. We engaged on B2B basis. When GDPR came in we adjusted operationally and continued, I left the company but as far as I know they are still afloat and still operate in the same way, so it's definitely doable.