Agreed, this seems overly onerous, but now you're having to pay an(other) intermediary margin instead of hiring the remote contractor yourself, and possibly even at slightly higher rates because now the U.S.-based consulting shop has to deal with the 15 year amortization of their use of off-shore labour.
I'd be amazed if that's how it worked for them in practice. I can't see how it could be a viable business for them if they had to amortize the cost over 15 years.
Their margin would be a tiny fraction of the revenue deemed taxable meaning every employee would put them in a worse cashflow situation. It's not like they could borrow to cover the 15yr span either.
Not sure how they handle taxation as I'm sure they wouldn't want to pay tax on the full amount they bill their clients (the businesses who use them).
I'd guess the U.S. entity treats it as doing business with their foreign entity.
Customer A pays "U.S. remote.com" $X per month for employee B.
"U.S. remote.com" pays the "foreign remote.com" entity 0.95*$X per month (I imagine this counts as a regular business expense rather than R&D since their foreign entity is also "just providing HR services", and the U.S. entity is not directly commissioning or even benefiting from any R&D that might be happening)
"Foreign remote.com" pays the employee 0.9*$X per month
In that case, section 174 might make it unprofitable for remote.com to hire Americans.. which I suspect is fairly uncommon anyway.
And even then I'm not sure they'd be bound by section 174, since they're still not paying for for R&D really, they're paying the "employee" to basically maintain positive relations with their client, whether that involves R&D or sitting on meetings and cracking jokes.