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Comment by askonomm | Hacker News Reader

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.

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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.

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

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.

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.

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.

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