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Ask HN: Strategies to land remote US job while living in living in EU?

79 points by committed 4y ago

Hello, I am experienced software developer working on enterprise software in eastern Europe country. With rising inflation and stagnant local salaries it's getting harder to afford a decent standard of living. I am looking at these jaw dropping US salaries, even 60k/yr would put me among top 3% earners in my county. Browsing US job boards I find many remote contract based and salaried positions but they are all looking for US based employees. Are there any fellow Europe based software engineers who work remotely for US companies and could share advice about landing such jobs?

rozenmd 4y ago
You're looking for US companies with EU offices, basically. You get an internationally competitive salary, and because they've got a local office, they also comply with the EU's sane employment laws. I don't really have tips - I joined Atlassian in Sydney and transferred to Atlassian France. After a while I managed to find another job using my personal network. At least in France some local companies are starting to realise they need to up their salary to compete with international/remote companies, so it should get better.
- isbvhodnvemrwvn 4y ago
  99% of US companies with EU offices will NOT pay you anywhere close to the US level of money, IIRC the offer I received from Atlassian in Poland some years ago was not even competitive with the local market.
  - shankr 4y ago
    This! These American companies open their offices in order to cut costs. They aren't going to pay the same US salaries except outside of big tech.
    - deleted 4y ago
      [deleted]
    - intelVISA 4y ago
      Depends, if you're a known good quality they'll pay regardless of location (generally).
      - deleted 4y ago
        [deleted]
  - propogandist 4y ago
    +1; international offices are subsidiaries of the parent company, They’re setup to comply with local laws and also pay local market wages (vs US wages). Any sane bigTech company in the US won’t want to deal with complexity of hiring EU staff directly, as the US HR staff will be on the hook for EU & country specific HR laws, tax requirements, benefits administration etc.
  - rozenmd 4y ago
    Polish market exploded at the start of this year since the tax changes, your anecdata is out of date.
    - isbvhodnvemrwvn 4y ago
      Those tax changes are irrelevant - you can make double for the top of the local market working remote for US companies. Several percent in taxes doesn't make a difference at this point.
      - rozenmd 4y ago
        Correct, and that's what I do
- Mandatum 4y ago
  What’s the max someone at Atlassian can make in Australia? Between them, Canva and MAGMA - it seems like the best paid jobs in APAC is your own consultancy.
- mytailorisrich 4y ago
  US companies with EU offices hire in those offices based on local compensation... quite obviously.
  - deleted 4y ago
    [deleted]
arnvald 4y ago
To get 60k/y you don't even need to work for a US company - it'll be much easier to find something in Germany or UK because of the time zone. Heck, even Polish companies offer this kind of salaries these days (they also post salary ranges most of the time so you can check it) and they're often very remote-friendly
- bitL 4y ago
  Heh, you probably haven't read horror stories from TeamBlind where Google Warsaw was paying like $25k/year... My guess is that the op wants to stay in Poland but work for at least $60k instead of moving to Germany/UK where 60k is a poverty line.
fjfbsufhdvfy 4y ago
The most effective way is to be active in communities for the thing you want to be doing. Get a reputation as one of the people who know what they're doing. Eventually others will start reaching out to you privately when their companies are looking for new hires. If you get your foot in the door this way, your location becomes mostly irrelevant. Sounds unusual, but I've previously gotten very well paid jobs in multiple startups through this kind of personal networking - you even get to skip most of the interview process. Meanwhile everything I applied to without any connections has been a wash. Negotiations are much easier if you can deal with working as a US contractor, dropping most of your employment protection laws for more money.
tok1 4y ago
I don't want to sound negative but with current tax legislation in most EU countries, this is far more complicated than it may sound, at least to do it lawfully. Not impossible but in many cases, it requires a legal entity in your home country to be fully employed (i.e. not freelancer-based). I investigated a somewhat related scenario: Being employed at a German legal entity with an already-remote contract and relocating to a neighboring EU country for permanent remote work. Turns out to be complicated and quite unattractive for your employer to support this, due to national tax+labor laws, potentially mandatory social insurance, etc. Would appreciate any hints though.
- mrtksn 4y ago
  It's not that complicated actually. There are already companies who establish local companies that function as intermediary for hiring local people. Alternatively, you can setup your own company that will employ you, pay the local taxes etc. and the company that actually you work for will pay your company for purchasing services. Deel, Oyster HR and Papaya Global are examples for the first solution.
- bitL 4y ago
  It's super easy actually. All one needs is to be a freelancer in the EU and use W-8BEN form in the US. No additional taxes, just EU ones.
  - cube2222 4y ago
    Your invoices are also with 0% VAT (reverse charge), so arguably it's simpler than contracting for a European company.
    - distances 4y ago
      Though VAT is one of the easier things in practice once you have everything running. Granted I used an accountant to deal with all the taxes, which totally is worth the cost.
  - tok1 4y ago
sarchertech 4y ago
Many US companies hiring people from Europe are treating them as de facto employees but paying them as contractors. This is illegal. It’s not something that the US government has been regularly enforcing. But if the trend continues and ends up on the public’s radar, that will change.
- bitL 4y ago
  It's not illegal. An EU person needs a legal entity in the EU (it can be either freelancer or a company) and then it's just usual B2B relationship where EU person pays their taxes, insurances etc. in the EU. US company still saves, i.e. instead of paying 200k to a fresh graduate they can pay it to a senior dev in the EU.
  - Semaphor 4y ago
    Depends, in Germany chances are that it falls under Scheinselbsttändigkeit (pseudo self-employment) which would be illegal.
    - bitL 4y ago
      That would be if the company were in Germany. But not outside Germany, there the freelancer is classified as "exporter" (both for US and EU clients).
      - gingerlime 4y ago
        the only issue is that you might be liable to pay social insurance (DRV), but only if they can show that you have only one long-term client, and I’m not sure if it applies to foreign clients, especially outside the EU (but it might)
        bitL 4y ago
        AFAIK it doesn't apply to outside-Germany clients. The freelancer is viewed as exporter and contributes to German export economy. Mind you, a freelancer has no social safety net, no pension, exorbitantly expensive health care (900+ EUR) and no unemployment benefits either.
piinecone 4y ago
I’ve been living in Europe for 7 years and working remotely for US companies. Here is what I do (please tell me about better ideas!): 1. Apply to US remote jobs on the east coast and mention working from Europe. I’ve had a lot of luck overlapping for half a day. Not so great in a leadership position though. 2. Contact colleagues you like working with at US companies and see if they’re open to working with you. Someone vouching for you on the inside helps a lot. 3. Specialize in something valuable, pitch contract work, and try to convert that to full-time (or part-time or whatever). Plug: my friend and I made a thing to address this problem because we have it too: https://polyfill.work https://polyfill.work You say how much you want to make, where you work from, etc., and it emails you when a company wants to hire someone like you. If you try it please let me know what you think.
- mgraupner 4y ago
  Just some input for you: Confirmation mail went straight to the spam folder in Google Mail. After confirmation send a mail with link to profile and some welcome message, how am I suppose to find my profile again? Let me edit my profile afterwards.
  - piinecone 4y ago
    Thanks, we’ll do that! Yeah, that flow is ... not great right now.
    - mgraupner 4y ago
      Plug: I help companies solving these kind of things. Hire me. ;D
- tluyben2 4y ago
  Also good to say; many singles or child free couples can change their timezone to match their client. I changed from US to SG and back a few times over the past 10 years while living in the EU. It was actually quite nice; asia was better because finishing your day when the rest of your friends wake up is nicer than saying you cannot really do anything after 4 pm but you get used to it anyway.
scrollinondubs 4y ago
I worked previously for a US-based company that hired engineers from around the world (Pagely) and they didn't care where anyone worked. I don't have any specific advice other than these employers exist and you just have to find them. These are good sites with ability to filter down to remote-only: https://angel.co/jobs https://angel.co/jobs https://remoteok.com/ https://remoteok.com/ https://weworkremotely.com/ https://weworkremotely.com/ If you get pushback based on complexity it creates for them having to manage payroll/tax witholding in different jurisdictions there are services like this one: https://opolis.co/ https://opolis.co/ I would figure out fees for that and bake it into your proposed salary. You would have to do the math but could still represent a more cost effective hire to them and with no additional complexity... at least that's how I'd try to make the case. good luck
- sarchertech 4y ago
  Most US companies will not deal with hiring someone as a direct employee from a country with the kind of worker protections most European countries have—unless they already have a presence there (and are likely paying local rates anyway).
  - pid-1 4y ago
    Can't you start a company in the EU and get hired as a contractor to circumvent this? That's the way to go for BR developers. You even get some cool tax breaks for exporting services.
    - cube2222 4y ago
      Yes, that's the way you do it, at least in Poland. You start a sole proprietorship and then just invoice your US-based client monthly. It's very simple for both sides.
      - fruit2020 4y ago
        Do you have to do anything special with regards to vat? You’re selling services to a US company. Just asking
bitL 4y ago
TopTal, Crossover, Turing etc. Also: https://jobboardsearch.com/remote-jobs-only https://jobboardsearch.com/remote-jobs-only
- jacknews 4y ago
  Except with some of these you're giving up most of the 'wage arbitrage' to the 'agent' - they're often making as much as you are for every hour you work, sometimes even more, just for being an intermediary.
  - bitL 4y ago
    That's life I guess. If TopTal adding 70% on top of your rate still gives you 2x EU salary, is that so bad? When an E7 at Facebook London earns 250k and E7 in Menlo Park earns 860k, there is quite a margin to exploit...
alanfranz 4y ago
I think you’re asking for a US salary rather than a US company in itself, right? Unless you’re an exceptional performer who can command a US salary from a position in EU, I think you could: - move to the US, maybe some remote area where cost of living is minimal but you get a reasonable internet connection - apply for a full remote job that accepts digital nomads, so they ack you could work from any timezone - go back living in your EU country You should mind any Irs or immigration office complaining, though, and you may be breaking laws.
- woodson 4y ago
  This would only work if you have work authorization in the US. All US employers must ensure proper completion of Form I-9 for each individual they hire for employment in the United States. (https://en.wikipedia.org/wiki/Form_I-9 https://en.wikipedia.org/wiki/Form_I-9)
  - alanfranz 4y ago
    Nobody said it would be easy.
meheleventyone 4y ago
The main thing is timezone, if you’re past CET you’ll have a harder time working for a US company particularly if they’re west coast. For me in UTC-0 a lot of sync with PST people happens at the end of my day. For our couple of people working in CET that basically means running into the evening. Most remote jobs should state timezone preferences though. For myself I got my job the boring, non-replicable way, through my professional network. If you have friends or ex-coworkers who’ve moved abroad it might be worth looking them up.
tomwojcik 4y ago
Pole here. $60k/yr is a slighly above average salary for a senior backend engineer in Poland so I think you're looking too far. It's much easier to find an even better offer from DACH countries. I know people from Poland who work remotely for the US. Even though salary is much better ($120k is a starter), you need to assume you will be expected to participate in late night meetings, on-calls and in general assume much worse work-life balance than we, in Europe, are used to.
- brtkdotse 4y ago
  > $60k/yr is a slighly above average salary for a senior backend engineer in Poland I don't doubt you, but do you have a link with the source for this? I'd love to have it for a discussion in another forum :)
  - tomwojcik 4y ago
    Sure. justjoin.it is the leading job offers board for IT professionals in Poland. Here's their detailed report from 2021 https://bucket.justjoin.it/Raport_wynagrodzen_polskich_programistow_za_2021_rok.pdf https://bucket.justjoin.it/Raport_wynagrodzen_polskich_progr... There's no data for 2022 yet, but just have a look at the board. Filters: senior, b2b, python. 25_000 PLN (monthly salary) == $60k / y. Taxes not deducted, but assume ~10%. https://justjoin.it/all/python/senior?employmentType=b2b&tab=with-salary&sort=salary https://justjoin.it/all/python/senior?employmentType=b2b&tab...
  - cosmodisk 4y ago
    Not in Poland,but another data point. Ignore the project management and similar jobs and just look at the dev positions: https://jobs.workinlithuania.lt/?sort=-created_at&page=2 https://jobs.workinlithuania.lt/?sort=-created_at&page=2
frozencell 4y ago
Luxembourg's median household income was $67,521 in 2020 in crisis. EU also offer bicycle roads and collective healthcare, what are the arguments to go in the US? Genuine question.
- fruit2020 4y ago
  Question is how to make more money in EU by working remotely and getting a US salary. Living in the US is totally different. Anyway, if you can make more, under similar conditions, why not?
  - frozencell 4y ago
    > Anyway, if you can make more, under similar conditions, why not? One could think this is unethical and individualist, OP reinforces the dollar monopoly and has to pay taxes to times right?
mrweasel 4y ago
Is there some reason to not apply for a job in an EU country? $60.000 is pretty low and getting hired in another EU country (assuming you're in the EU of cause) might be easier than getting hired by a US based company.
- tluyben2 4y ago
  Also not actually that easy to be hired in another EU country without moving. If you work from another country, the employer will have to create or contract with an entity in your country that hires and pays you. It is a real pain; it is a major reason why I keep a running company that my tax entity sees as a real company (it does investments, hires people, has multiple clients etc) so I cannot be seen as a de facto employee; it is much easier for me and employers to pay me via that. No headaches.
- ralgozino 4y ago
  Where's €60000 pretty low? In Italy at least €60000 a year before taxes is kind of a very high salary and hard to get. The average salary for a DevOps Engineer according to Glassdoor is 35000 a year.
  - mrweasel 4y ago
    Pretty low might be an overstatement, but €60.000 it is in the lower end for an experienced SRE, DevOps engineer or developer in Denmark. I'd say it's a reasonable salary for someone with a few years of experience. Personally I'd expect something like €80.500 per year as a devops or SRE, and I'm not that good. €35.000 per year... You could make that as a cleaner or by working the cash register at a supermarket (you might need to take a few extra shifts, but it's certainly possible). The good news is that the Danish IT industry is short on qualified people and can deal with you not speaking Danish.
bohdank 4y ago
Apply for a job at Automattic, the company behind WordPress.com. It’s a global company, with 1.8K+ employees in 90+ countries. You can work from wherever you want. And the company is top-notch in async working style. https://automattic.com/work-with-us/ https://automattic.com/work-with-us/
newbie578 4y ago
Interesting topic, would also like to know more. Does anyone know what is the current situation with YC, do startups in U.S. hire from Europe on a B2B contract? I scoured a little through the job listings but didn't find anything worthwhile. Offtopic, but why are there so few mobile cross platform job postings in U.S., e.g. Flutter, including startups, why does everyone chase native development, especially when you are strapped for cash?
ddorian43 4y ago
> Are there any fellow Europe based software engineers who work remotely for US companies and could share advice about landing such jobs? Been doing for 5+ years. Assuming you're "senior" that salary is easy to get. I just search all job sites with "remote" that accept CET timezone. Getting the $120K+ is harder though.
wooque 4y ago
Use "Who is hiring/Who wants to be hired/Looking for freelancer" monthly thread, I found my first job for US company there.
mkl95 4y ago
Build your resume and your Github repos and they will come. I get cold emailed with job offers for US companies once in a while. When your LinkedIn profile has keywords like "senior" and "lead" you start getting scraped.
- jstx1 4y ago
  > When your LinkedIn profile has keywords like "senior" and "lead" you start getting scraped. And some people still say that titles don't matter.
  - mkl95 4y ago
    They definitely matter to recruiters and their web spiders. The meme that has been circulating recently about LinkedIn job descriptions vs the actual jobs is deeper than it seems.
nerdywordy 4y ago
We (tacinsight.com) are rebuilding our entire front end from scratch and are looking for a senior javascript engineer. Preferably with prior experience in a large React project. This is a greenfield rewrite of a tightly coupled ASP.NET frontend to React+API. Email in profile if interested.
giomasce 4y ago
It might not necessarily work everywhere, but here is my experience. I live in Italy and work for the US. The company I work for specializes in a well known free software project. I contributed a few patches to that project, then met a few people from the project at FOSDEM over a beer and spent a couple of pleasant afternoons with them. I then applied and was given a technical test, but I have good reasons to believe that those patches and beers were crucial in later receiving an offer.
- Bakary 4y ago
  There's kind of a bias in that hiring decisions based on social connections have a bad reputation by default. This bias is of course based on experience and natural intuition about how corruption sets in. However, when you hire someone who is going to interact with you many hours out of every day, wouldn't it make sense to find someone you get along with? I know I am the most productive when the completion of my tasks can help coworkers I get along with very well.
dennisjauntify 4y ago
I met a few people with US work authorization keeping a US residence in a no income taxed state (Texas, South Dakota) and maintaining a job with that residency. They pay US federal and employment taxes. Some of them report this income to their other country of residence, whereas other do not. Some are nomadic not staying in one country long enough to be considered a tax resident. It's a legally gray area. In EU, unless they have dual citizenship or a legal reason to stay in a country for a while, they hop around due to visa issues and leave the Schegen zone to non-Eu/non-Schegen countries like Morocco, Turkey, Georgia, Romania etc. Many are in Central/South America due to time zone simplicity. good internet is a must. Do note many countries have a digital nomad visa option.
- dennisjauntify 4y ago
  Some swear they are lawful residents of said states but do your own diligence.
bcherny 4y ago
Meta, Google, Amazon, Microsoft, Apple, etc. all have European offices. At least some of these allow fully remote work from Europe. If you’re looking for a big tech company in particular, I’d start by checking out their job boards.
battleastronaut 4y ago
60k/yr (USD) - you can find this type of remote positions easily in Europe. Germany/Poland/Switzerland. Currently, this is typical average for contractors for these regions. But real experienced developers (by skill not years of service) currently can make a 100k+ USD on the European market.
- bitL 4y ago
  More like 200k+...
freedom2099 4y ago
If you sim for 60k/yr you don’t need to look that far… plenty of jobs in the EU at that salary range!
haney 4y ago
The engineering team at Invisible Technologies hires globally and pays above that salary range you listed (we’re US based) We’d love to talk to you, you can either apply here https://www.invisible.co/invisible-engineering https://www.invisible.co/invisible-engineering or email me personally (my email is my HN username @invisible.co)
notemaker 4y ago
If you're adamant on doing this, make sure your team is on the east coast. With a 9h difference to San Fransisco it is hard to keep your hours within 9-5. Unless you're a night owl, in which case this advice is moot.
b20000 4y ago
remote means that you need to be closeby and in the US.

meheleventyone 4y ago

The illegal bit isn’t the pay structure but the treatment of a contractor as an employee. Both the European and US laws make this distinction with similar criteria. This is to make sure companies aren’t avoiding their obligations to employees. And just from a moral perspective if you’re expecting someone to act like an employee you should treat them in kind.

csmpltn 4y ago
> "The illegal bit isn’t the pay structure but the treatment of a contractor as an employee." What's illegal here exactly? 1. US Business Entity conducts business with EU Business Entity. 2. The person (let's call them a contractor) is employed as a full-time employee for the EU Business Entity. They also function as the owner of the EU Business Entity. 3. US Business Entity, EU Business Entity and the contractor - all pay their respective taxes as required by the laws in their jurisdictions. This is the very foundation of how consultancies operate, for example: 1. The consultancy is the employer, the consultant the employee. 2. The consultant gets hired out to different clients, to work on different projects. 3. The consultant's salary gets paid by the consultancy, not the client. 4. The client only ever conducts business with the consultancy.
- meheleventyone 4y ago
  If the company contracting allows the contracting entity to maintain the autonomy and flexibility required then nothing. Just wrapping people in shell companies doesn’t usually avoid the legal tests for whether someone is being treated as an employee or contractor AFAIK.
  - csmpltn 4y ago
    > "Just wrapping people in shell companies doesn’t usually avoid the legal tests for whether someone is being treated as an employee or contractor AFAIK." What does "wrapping people in shell companies" mean? As a person, you're either employed for a "shell company", in which case you've signed a contract and you get paid a salary - or you're the owner of a "shell company", in which case you get to choose how to manage the company's funds. You can also be both, simultaneously. You'll be paying taxes either way. Paying yourself a salary is a taxable event. I'm still not sure what's illegal here?
    - Luc 4y ago
      https://en.wikipedia.org/wiki/False_self-employment https://en.wikipedia.org/wiki/False_self-employment
      - bitL 4y ago
        That's within a single country. There is a qualitative difference between cross-border business relationships and intra-country ones.
        deleted 4y ago
        [deleted]
      - csmpltn 4y ago
        > "False self-employment is a situation in which somebody registered as self-employed, a freelancer, or a temp is de facto an employee carrying out a professional activity under the authority and subordination of another company. Such false self-employment is often a way to circumvent social welfare and employment legislation, for example by avoiding employer's social security and income tax contributions." Could you kindly explain how this definition of "false self-employment" is in any way relevant to the situation I just described in my original comment? I'm struggling to see it myself. What about the specific situation I described implies circumvention of social welfare, or employment legislation, for example?
        sarchertech 4y ago
        A company wants an employee, they plan on treating this person as an employee. However the company doesn’t want to pay the additional costs required by regulation. Payroll taxes, unemployment insurance, dealing with tax withholding, overtime where applicable, family leave requirements etc… So they hire a contractor instead and pay them as a 1099 contractor, or the contractor sets up an LLC and they pay the LLC, or an S-corp. Doesn’t matter how they pay them, if they treat them as an employee (there’s a 20 part test) they are a de facto employee and it’s false self-employment.
gwnywg 4y ago
Contractors have no rights nor protections under employment law, they need to contribute to social system by themselves, they are selling their services and expect they can be released with short notice.

sarchertech 4y ago

Nope. Contracting through a legal entity doesn’t prevent you from being a defacto employee.

tluyben2 4y ago
Yep, in many places you would need multiple clients to prevent being seen as an de facto employee.
- bitL 4y ago
  Some companies have different offices in different countries, and one can issue invoices to the one in the US for 6 months and the one in Dubai for another 6 months if that were a problem. I've never heard of anyone in the EU having "exporter" clients in the US to require multiple of them every year though.
  - sarchertech 4y ago
    It’s because no one is looking at this closely yet, because until recently it wasn’t popular enough to pop up on anyone’s radar. The loophole you’re talking about is alas probably tax fraud, if you are paying from multiple companies that you own to make it look like your “contractor” had multiple clients.
    - tluyben2 4y ago
      Definitely fraud. I have multiple clients, products and take risks etc; everything associated with a business (a small business but business nonetheless): nothing has been ever faked. Being an employee but trying to disguise it to gain benefits is simply seen as fraud but usually not enough to get caught; many do it. It has been popular, at least in NL for decades now: people invoicing eachother and moving money around just to make the threshold.
      - bitL 4y ago
        We are talking about companies operating outside EU. You are still set on companies operating in the same country. So a dev takes a risk, switches to a freelance mode, finds a client abroad, the client pays much better but at the cost of terminating agreement anytime, and for you it's a tax fraud? Smells like a crab bucket to me ("how unjust is it to earn that much more than me!").
        tluyben2 4y ago
        Not my rules or ideas… if you try to invoice different companies to get around defacto employee rules we have here, then it is fraud; you probably won’t get caught. It’s not fraud ‘for me’, it is for the tax office of my country and, as other people have said, also maybe for the employer side. So I play it safe to make sure it’s neither, however, that is far different from taking a contractor job for one client for a long time; that often will be flagged as defacto employee and taxed like it.
        bitL 4y ago
        I really think you are mixing completely unrelated things together. Just a thought experiment: there is a company that has no office/contact in the EU. Is a NL-based freelancer prohibited from working for them? In other words, is the freelancer prohibited from exporting their work to the country of origin of that company or not? You keep applying laws for companies operating in NL to any arbitrary company operating elsewhere.
        tluyben2 4y ago
        You can of course but there are rules that you need to follow for the tax office; if they mark you as defacto employee in NL for a US company, different taxation applies. You are marked as not an entrepreneur or company in that case and you will be taxed (a lot) more. I didn’t say anywhere it is illegal or prohibited anyway (I just said you will be flagged as defacto employee which brings consequences); it is just not very smart as you will have all the bad things and none/little of the good things working like that.

csmpltn 4y ago

It's the LLC's or S-Corp's responsibility to deal with everything you've mentioned, not your client's. Your client is simply purchasing a service from your LLC or S-Corp, with a contract. The contract must not stand in violation of your local tax and employment laws. It's a standard case of one company (a third-party) purchasing the services of another (a company you simultaneously both own, and are employed at).

Luc 4y ago
> Your client is simply purchasing a service from your LLC or S-Corp, with a contract. And if that's a fiction, a judge will see straight through it. Ask a lawyer if you don't believe us. I can think of several examples in the news lately in my country of residence.
- csmpltn 4y ago
  > "And if that's a fiction, a judge will see straight through it." I never claimed that "pro forma" contracts used for laundering illegitimate business relationships are somehow legal. This feels to me like an entirely separate issue, and I'm not sure how it's related to anything we've discussed so-far? You can own a company, and simultaneously be the only employee in that company. Your client enters into a contractual agreement to purchase services from your company. Your company must comply with all local laws and regulations as part of your employment in that company. Your company charges the client a fee which, down the line, covers all of the business expenses associated with the work being done (including any taxes that need to be paid, overtime, insurances, pension, social security, etc). I'm still, to this moment, not sure what makes any of this illegal or illegitimate?
  - sarchertech 4y ago
    There is a 20 part test that covers whether you are considered an employee of the engaging company. Whether the engaging company pays you directly or pays an LLC you own is not part of that test. If the IRS or a local government decides that you are being treated as an employee of the company, they will ignore the intermediate LLC. Think about your argument for a second. If it holds true, employment laws are useless. Single owner LLCs are pass through entities and they have no obligations to pay minimum wage, overtime, unemployment insurance etc… If your interpretation of the law stood, every company would simply require each employee to form an LLC and pay each employee as an independent contractor. In fact many companies do try this, and the IRS and state departments of labor go after them for it regularly.
    - csmpltn 4y ago
      > "Single owner LLCs are pass through entities and they have no obligations to pay minimum wage, overtime, unemployment insurance etc…" Perhaps an LLC (which is a pass-through entity) is the wrong structure to use here then. Perhaps a C-Corp would be more suitable? Here's one example of what I'm referring to: https://www.altinn.no/en/start-and-run-business/planning-starting/Choosing-Legal-Structure/private-limited-companies/ https://www.altinn.no/en/start-and-run-business/planning-sta... > "If your interpretation of the law stood, every company would simply require each employee to form an LLC and pay each employee as an independent contractor." But that's exactly how companies hire external contractors today, so I'm not sure why you're suggesting there's anything wrong here? The reason companies don't require each and every employee to form an LLC is because it makes things more difficult for everybody - not because it's illegal. Direct employment is much easier to manage, hence it's more popular. I don't see your point?
      - sarchertech 4y ago
        No the reason is because it’s illegal. You can’t engage someone in an employee employer relationship and pay them as an independent contractor. >much easier manage This is patently false. Contractors are much much easier to manage. It is perfectly legal to hire contractors. There is nothing wrong with this. What you can’t do is hire a contractor and treat them as an employee. There is a legal difference. The IRS has a 20 part test.
  - deleted 4y ago
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sarchertech 4y ago
This is an incorrect interpretation of the law. The IRS will look at this situation and determine either the owner of the LLC is a de facto employee or not. Whether they are billing though an LLC or not is not one of the factors. Here’s a quick read about the topic: https://www.trimprulaw.com/an-individual-who-has-an-llc-is-an-independent-contractor-or-employee/ https://www.trimprulaw.com/an-individual-who-has-an-llc-is-a... “Just because an individual which is engaged by a business has an LLC, does not mean that the DoL will classify that person as an independent contractor.”
- bitL 4y ago
  You are looking at US->US relationship, making the same error as folks elsewhere with NL->NL relationship etc. The question is US->NL relationship etc. You are applying labor laws of one country into an international relationship.

sarchertech 4y ago

What you’re talking about happens in the US as well, and courts have held that whether you are billing through a corporation or not doesn’t impact whether you are a de facto employee. e.g., the owner of an LLC who bills through the LLC can still be found to be a de facto employee. It doesn’t matter that you pay income taxes, what matters is that the employer isn’t paying payroll taxes, withholding income taxes, paying unemployment insurance etc.

csmpltn 4y ago
> "It doesn’t matter that you pay income taxes, what matters is that the employer isn’t paying payroll taxes, withholding income taxes, paying unemployment insurance etc." I think we're talking past eachother here. The employer, in this case, is you (a company you own). You're also the only employee (a private person employed by that same company you own). If your company decides to pay you a salary, your company must also deduct taxes, social security, benefits, payroll taxes, income taxes, pension, etc. Your company must ensure the terms of your employment are compliant with all laws and regulations. Your client enters into a contractual agreement to buy a service from your company. They're not responsible for your company's compliance with local laws and regulations. Your company will be charging the client a certain rate (gross), which is usually worked backwards from the "net salary" you as an employee want to make.
- sarchertech 4y ago
  What you’re describing in the US and in the other jurisdictions I’m aware of essentially doesn’t exist. The vast majority of single person corporations are pass through entities. There’s no income tax withholding , no salary, no corporate tax etc… However even in the very rare case where you setup a non pass through entity, if your company only has one source of income and that is you the owner operating as a de facto employee of another corporation, in most jurisdictions that is false self employment. What you’re describing is an often attempted loophole, and there’s plenty of precedent that it doesn’t hold up.
  - csmpltn 4y ago
    > "What you’re describing is an often attempted loophole, and there’s plenty of precedent that it doesn’t hold up." I strongly disagree, it's not a loophole, it's literally one of the most used incorporation methods in Norway ("aksjeselskap", or "AS"): https://www.altinn.no/en/start-and-run-business/planning-starting/Choosing-Legal-Structure/private-limited-companies/ https://www.altinn.no/en/start-and-run-business/planning-sta... This model isn't unique to Norway. Plenty of other countries offer similar incorporation methods.
    - sarchertech 4y ago
      The incorporation method isn’t the loophole. Paying someone through a corporation (regardless of its pass through status) and then treating them as an employee is the the attempted loophole. In the US and many other countries it doesn’t work.
      - csmpltn 4y ago
        > "Paying someone through a corporation (regardless of its pass through status) and then treating them as an employee is the attempted loophole" But isn't that exactly how consultancies work though? The client enters into a contractual agreement with the consultancy, asking for specific consultants to help the client get certain tasks done. The consultants are "treated as employees" in the sense that they often have to physically work with the client, on the client's projects, during the client's schedules, having lunch in the client's canteen, working with the client's team, reporting to the client directly, using the client's tools and processes, creating IP for the client, etc.
        sarchertech 4y ago
        There is a 20 part tes(it’s actually now a 3 part test with 4-6 sub parts each but it’s substantially still the same). The fact that the consultant has to physically come into work at a specified time and uses the clients tools is evidence for them being employees. That their company receives income from multiple clients, and the engagement is for limited duration is evidence for them being contractors. The IRS and local governments make the final determination. https://www.everee.com/blog/irs-independent-contractor-test/ https://www.everee.com/blog/irs-independent-contractor-test/
        csmpltn 4y ago
        Thanks. If there's a subjective test involved, where some things are left to interpretation and circumstantial evidence, my take here is that it would be wisest to work with a lawyer/accountant on setting up the correct structure for each engagement. It's also good to remember that this is the IRS, and that other jurisdictions may have entirely different practices here.