Ask HN: US company is 100% remote, is it a burden to hire internationally?

https://news.ycombinator.com/item?id=39106167

by gtirloni • 2 years ago

18 23 2 years ago

news.ycombinator.com

Say your company is in NY and the employee is in WA so you have all the remote daily stuff figured out, is it harder to hire another employee now from another country?

If so, does anyone know the specifics? Is it different tax stuff, difficulty with sending payments, legal requirements, etc?

rozenmd• 2 years ago

The specifics depend on the country you're hiring in.

The cost of working out each country's requirements is significant enough that it's often a lot cheaper to use an employer of record service instead of setting up your own entity.

thfuran• 2 years ago

And things just get messier if you're working in any regulated industry.

beardyw• 2 years ago

Might be cheaper and easier to employ contractors.

gtirloni4• 2 years ago

For the company and the employee. These employer of record services take a sizeable cut.

JumpinJack_Cash• 2 years ago

Bitcoin!

zerr• 2 years ago

It is much simpler than hiring an employee or even a contractor in US - through B2B contract. Basically, you buy services from them. They send invoices e.g. at the end of the month, you do regular bank transfers (or any other legit way of money transfer). Since the contractors are outside US, you don't even have a burden of proof that they are not employees but real contractors.

comprev• 2 years ago

B2B contract is probably the most common method so the "employee" is an external contractor providing a monthly service. They are responsible for all taxes and employment law.

Quite a few companies exist to provide these services, known as "umbrella" companies. For a monthly fee you are a regular "employee" of their local company, and the invoice to your client is paid to the umbrella company directly.

vp4nkov• 2 years ago

If you are talking about hiring software developers, it is easy enough. B2B contract, the person you wish to hire has to fill out and give you W8-BEN-E which you will give to your accountant to forward to IRS. Payments are easily facilitated via a company specialising in this, e.g. Deel or Veem. Contractors figure out and pay their taxes themselves. I myself am currently employed in such manner.

ac2u• 2 years ago

If you don't want to go the contracting route then usually the country you're thinking of hiring in will have a government-funded organisation designed to help with the process of setting up a local wholly-owned subsidiary.

Where I'm from they're called InvestNI and they've helped multiple US companies set up locally.

It's an expensive undertaking but worthwhile if you're looking to hire multiple people. The hassle is offset by support and funding to help subsidise the cost of providing jobs.

gregjor2• 2 years ago

Yes. A few common issues.

- Language

- Cultural differences, including things like time off, work hours

- Timezone differences causing large delays in communication

On top of those issues, employers who haven’t hired internationally may worry about tax and legal implications. The potential employee may have those concerns too, and expect the employer to deal with all of it.

While straightforward solutions like B2B contracting (described in other comments) simplify the tax and legal issues at the US end (but maybe not at the other end), international hiring is a novelty for many employers, so they may avoid it out of worry and ignorance, or cultural bias.

gtirloni4• 2 years ago

My example was precisely between NY company and WA employee because that includes very different timezones, time off, work hours, local holidays, etc. So the international employee wouldn't be a novelty in that area.

Language, you're supposedly filtering for that in your hiring process but I understand it might be extra work (in the initial screening phase).

It seems everything you listed would be up to the company to decide (compared to hard requirements around legal/tax issues -- are there any that you know of?).

My question is more about stuff that would be a burden or even prevent that type of hiring even if the company is already 100% remote.

I'm trying to understand the multitude of "Remote US" job posts.

gregjor2• 2 years ago

NY and WA have a three hour time difference, so at least five hours of overlap in a work day. Employees in Europe or Asia would have bigger differences. But my main point is that hiring people from another country does present a novel situation to many employers. Whether their concerns have any basis or solutions is beside the point. If someone has a fear of flying you can't make them feel better with facts about safety.

Plenty of employers believe foreign employees, or American employees working from abroad, create complicated tax and legal problems for the employer. Sometimes that's true, sometimes not, and usually they could find a solution if sufficiently motivated. But even so it's a lot to ask an employer, to create a special case or do the research, when they think they can just as easily get someone without those possible problems. Ask your employer to pay you through PayPal or in Bitcoin and you'll see what I mean -- it's not a matter of possibility or legality, just that you create a bureaucratic exception that someone has to handle.

So based on some real, some imaginary, and mostly solvable problems that nonetheless look like risk, hassle, and exceptions to standard process, employers choose what looks like the easy and safe route.

MaxHoppersGhost• 2 years ago

Also it is very hard to fire someone in countries like France or Germany. So much so that we try to hire in the UK only anytime we need a European employee. Even the UK isn’t great but it’s the lesser of evils.

codegeek• 2 years ago

Honestly, it is a lot more burdensome to hire in different states within US than your home state where business is registered. Hiring internally is relatively easier because you can do a B2B Contract and use W8-BEN-E for IRS. For hiring in a different sate, you will need to register your entire business there, setup Unemployment insurance accounts (on their shitty websites with no standards), deal with payroll/withholding taxes and quarterly reporting, sales taxes (if applicable) etc etc.

hiAndrewQuinn• 2 years ago

To OP: Differing legal and tax stuff is probably the biggest hurdle, yeah.

Related question: I'm a US/EU dual citizen resident in the EU. As a software consultant, can I set up a Delaware LLC, bill through that, and handle all the EU weirdness on my end to insulate my end customer from having to worry about it? or are there unavoidable hassles my end customer would likely have to put up with?

jamesliudotcc2• 2 years ago

My company uses [Remotely](https://www.remotely.works/). They source talent across Latin America (mostly Brazil, but other countries as well). Expect to pay well for the best talent (obviously). My coworkers sourced through Remotely are all extremely good.

The time zone difference is not a major problem for us, and I am in PST (the US part of my company is mostly EST & CST). There is a large actual time zone difference with Brazil, but all of our contractors tend to be night owls (we are clear about where we are, if they weren't at least slightly night owls, they wouldn't choose to work with us). If you keep core working hours in US EST, you hopefully have morning larks among your Washington state employees as well to make it easier.

Things also depend on the specific foreign country, and what other business your company wishes to transact in that country. My company has (I believe) direct employees in many jurisdictions, including in Europe. But for Latin America, I believe (almost) everything is through Remotely.

subtra3t• 2 years ago

If you don't mind, could you share the range which you believe "paying ?ell" falls under?

jamesliudotcc2• 2 years ago

On par with US wages.

thiago_fm• 2 years ago

There are companies which handle this for you, by hiring employees through an "employee of record" umbrella company, keeping a percentage of their salary for any legal costs that might incur, even if in the end you want to fire them. They also handle payment, billing, visa and so on. It's really good.

Many American companies are using it to hire talent from abroad. It's good because you can hire talent from Europe paying typically 50%-70% of US dev salaries, they speak English and have similar culture and expectations. Furthermore, the salary that American companies tend to offer makes it very attractive as well, in comparison to their local markets.

Employee of record companies: Remote.com, Deel.com

justinram11• 2 years ago

IANAL or Accountant, but just a heads up that under the new Section 174 rules, foreign developers have to be amortized over 15 years (5 years for a domestic developer)

Ask HN: US company is 100% remote, is it a burden to hire internationally?

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