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> They setup a local company in country Y wholly owned by the parent. The discussion is about non-FAANGs here. In my experience this isn't always the case and

> They setup a local company in country Y wholly owned by the parent. The discussion is about non-FAANGs here. In my experience this isn't always the case and companies aren't always willing to do so just to hire a remote talent. I personally know someone who was hired for a US based company in Berlin, and when he was laid off, he had to spend few thousand €s from his own pocket to take care of the legal stuff for closing the company. I understand remote work is the future, but we can't brush stuff under the carpet and say everything is hunky-dory.

908B64B197 6y ago
You can circumvent most of that by hiring the international remote person as a contractor or by having him incorporate himself as a consultancy firm and then buy consultancy services from him. It also becomes trivial to fire (don't renew the contract!)
- FlyingSnake 6y ago
  Most people here in EU would prefer to have a permanent work contract instead of having to jump through the hoops. Also contracting is a different ball game in many countries. E.g. in Germany the Tax office mandates that the contractor should have more than one customer per tax year. This would make it a hassle for a German software engineer to work for a UK company, who would rather work locally. The smaller non-FAANG companies/startup might lose quality remote talent due to this.
  - 908B64B197 6y ago
    > E.g. in Germany the Tax office mandates that the contractor should have more than one customer per tax year. Ahh, that I didn't know. Even if they are employed by their own consultancy firm? > The smaller non-FAANG companies/startup might lose quality remote talent due to this. That sounds like a business opportunity where some SaaS could take a percentage and handle local tax and reporting obligations.
- TechBro8615 6y ago
  IANAL, but AFAIU this will violate labor laws in many countries. For example in the UK, if you are a contractor that only works for one employer all year, you are considered an employee. And if the company does not pay tax to the UK it is in violation of labor law.
  - mikhailfranco 6y ago
    But only an employee for tax purposes (IR35), i.e. you cannot get a tax benefit by paying yourself a minimal salary (just enough for NI social security qualification) and taking the rest in dividends from your company at a lower tax rate. It is still a contract position in other respects, such as termination (contract law applies, not employment law). Some other countries do not have this problem, because, for example, dividends are not (double) taxed at source, and people pay the same income tax rate on their total income, earned and non-earned (interest, dividends).

908B64B197 6y ago

You can circumvent most of that by hiring the international remote person as a contractor or by having him incorporate himself as a consultancy firm and then buy consultancy services from him. It also becomes trivial to fire (don't renew the contract!)

FlyingSnake 6y ago
Most people here in EU would prefer to have a permanent work contract instead of having to jump through the hoops. Also contracting is a different ball game in many countries. E.g. in Germany the Tax office mandates that the contractor should have more than one customer per tax year. This would make it a hassle for a German software engineer to work for a UK company, who would rather work locally. The smaller non-FAANG companies/startup might lose quality remote talent due to this.
- 908B64B197 6y ago
  > E.g. in Germany the Tax office mandates that the contractor should have more than one customer per tax year. Ahh, that I didn't know. Even if they are employed by their own consultancy firm? > The smaller non-FAANG companies/startup might lose quality remote talent due to this. That sounds like a business opportunity where some SaaS could take a percentage and handle local tax and reporting obligations.
TechBro8615 6y ago
IANAL, but AFAIU this will violate labor laws in many countries. For example in the UK, if you are a contractor that only works for one employer all year, you are considered an employee. And if the company does not pay tax to the UK it is in violation of labor law.
- mikhailfranco 6y ago
  But only an employee for tax purposes (IR35), i.e. you cannot get a tax benefit by paying yourself a minimal salary (just enough for NI social security qualification) and taking the rest in dividends from your company at a lower tax rate. It is still a contract position in other respects, such as termination (contract law applies, not employment law). Some other countries do not have this problem, because, for example, dividends are not (double) taxed at source, and people pay the same income tax rate on their total income, earned and non-earned (interest, dividends).