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Ask HN: How do I legally build a remote dev team?

34 points by arcticfox ↗ HN
I'm a developer and I have a small American business. I see all of these posts about building remote teams distributed across the world and I think "yes, perfect!", but somehow I've been completely unable to find anyone covering the legality of doing this in detail. For example, I want to be on this list under "Worldwide":

https://github.com/jessicard/remote-jobs

Ideally I want someone that essentially works for us full-time and understands all of our core infra, can maintain it, etc. like an employee would. There seem to be tons of remote-only job postings in this vein.

But I don't understand how it's legal - aren't these people being treated as employees, which come with an impossible amount of risk / international law / messiness attached?

Is there perhaps a whitelisted set of countries that have extremely simple employee / contractor rules?

My worst nightmare is ending up in court for accidentally crossing some line that I didn't understand. I just want to hire someone and start building an awesome remote team!

26 comments

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CCing
Often aren't employee in the legal way that you mean it...but are "hired" as contractor.
collyw
I have applied for a couple for remote jobs recently (I am based in Spain). When I asked they said that I would basically be employed as a freelancer - so I would need to sort out my own taxes and things.
ge96
One thing to consider is time zones ie. You're awake, employee is asleep. Not necessarily a bad thing just keep in mind.
GFischer
Not necessarily. Most of South America is very close or in the same timezone as the East Coast of the U.S.

There is a time difference with the West Coast though.

I currently work for a Dallas-based company and I work the same hours as their employees, from Uruguay.

I'm not in the same case as the OP asked, I'm a full employee of a local subsidiary, but I've worked under a contract and filled a W8-BEN.

ge96
I see. I work with clients from Germany, Australia, and the Philippines. I have the time zone problem. But if it's relatively autonomous where they say "Do this" and you do it then no problem. But if real-time communication is a thing then it might be problematic still it's not too bad. I'm based in central United States. 9AM for me is 4PM in Germany for example.
mherrmann
Are you not afraid of them stealing your code / intellectual property?
GFischer
What stops your current employees from stealing code or intellectual property? As long as the OP has decent hiring practices, he shouldn't be any more afraid than hiring an American.

I've been on both sides of the table (both hired and been hired remotely) and this is covered under the standard employment contract.

mherrmann
Well, there is a difference when you're in the same country as the employee: it's much easier to sue.

I think my comment is being downvoted so much because it is perceived as (possibly even) racist? That would be far from the truth. I wrote the comment because I genuinely thought about outsourcing dev work for an app I am working on, but decided against it because I was afraid my code would end up somewhere on the internet.

GFischer
It did come across as xenophobic, and as a remote developer I found it a bit insulting, although I understand where you come from.

Yes, you have to weigh the risks and rewards, and if having your app source code disseminated would break you, then I'd want a high degree of control too. I have been given quite a lot of trust in my remote jobs and I haven't breached it, but I believe the companies involved would have been able to sue (so they weren't as helpless as an individual coder), and even if I had turned out to be morally corrupt, it wasn't something where stealing it would have given me much of a material advantage anyways (enterprise code is very much tailored to fit).

clueless123
Your fear is not unfounded. I am very familiar with the legal/court system in a south american country and I can pretty much assure you that any attempts to sue / enforce the terms of your contract to someone who is willing to break the law would be expensive and futile. That said, I personally know many top notch developers working remotely for US companies that would never dare to put their reletionships/reputation at risk by being careless/malicious with code. It is just to good a gig to risk.

* I guess if your code was sooo valuable someone could be tempted into cheating it could happen.. but if that is the case, a US developer would behave no different.

erik998
The linux kernel has so much more intellectual property to steal than your web app/phone app/sql queries. If your code is that valuable someone will buy your company. Everything out can be recreated. What can't be recreated is getting there first... Do yourself a favor, get there first, and fight to be first... All that myspace/friendster code isn't worth much if you don't get there first...and keep at it.
mherrmann
I'm developing a desktop app. Access to the source code would make it much easier to crack.
taway_1212
I've heard a story about SV startup (onsite) employees stealing their startup's code base and launching their own company with it. It turned out to be more successful than the original one, which eventually tanked. The owners tried going to court, but they didn't have enough proof to get a search warrant (or whatever the proper legal term is here) for their fraudulent competition.

BTW this also shows that having on-site employees is not a protection against frauds/thieves...

anandkulkarni
I run a large contract developer team that's globally distributed. The short answer is that US law permits hiring international contractors who are not subject to US jurisdiction provided they file a W8-BEN executed by that contractor certifying their tax exempt status. These contractors are responsible for paying taxes under their own countries' laws as part of a mutual tax treaty with the US.

Feel free to email me with questions. If you'd rather just hire one of our remote developers and not deal with the paperwork yourself, that's another option. We manage contracts with clients as a US company to insulate them from needing to set up 1-1 relationships with devs.

wayn3
what kind of money do you pay them? might be interested in joining.
anandkulkarni
Shoot me an email (see profile). Happy to share details. Most come from emerging economies rather than Western Europe, but not all.
sboselli
I currently work remotely for a NY based company, from South America.

AFAIK, what makes it possible is that we are hired as freelancers/consultants/contractors under what I understand is a pretty standard "Work for Hire" contract.

For the tax side of things, the company needs remote workers to sign a W-8BEN form (W-9 if the remote worker is a US citizen abroad), which states that the worker takes care by himself of taxes in his own Country.

Hope that helps.

codegeek
Pretty much this. I also have been hiring remote (outside US) for a US business and we do a contract with them signing a W-8BEN form. I did a lot of research and this is what my CPA recommended.

So technically/legally they are not your employees in the same way they will be if they were working inside the United States. In fact, my CPA calls them on our tax forms as "overseas contractors".

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kris99999
Being a remote employee (not contractor) for a couple of companies, both of them established some sort of address in the state. There are "HR" companies that handle group benefits, payroll, etc. which will have an in-state address (usually some lawyer's office who is a registered agent for them). There are likely companies like this that operate internationally, or you could look for that kind of firm in those countries.
clueless123
I own a small technology consultancy practice in the US & Peru. We regularly pick up projects in the US and have them developed overseas. In our case, business wise, project owners deal with us and we deal with the developers. That way they enjoy the benefit of working with a US corporation (Local, insured, easily reachable)

ps. If the reason you want a overseas developer is price, I should mention that the demand for good developers is quite competitive. A really good developer overseas, (Who does pays his local taxes and fiscal obligations) is not going to be much cheaper than one in the US. (but at least they are available!)

cylinder
I am working on a company for this problem. You're right in that you should be weary of contractor designation as this can lead to legal liability, often in countries you wouldn't expect. You don't want to setup entities and banking and such in every country just to employ one or two people.

If anyone's interested, including OP, would love to talk and learn more about what you're looking for and how my solution can help.

baybal2
Open a subsidiary in a country with no-nonsence tax law, (i.e. Singapore.) Bill/pay from it.
panbhatt
I want to get hired in your team. I am from Canada. Let's build up something at panbhatt @ gmail com. Plus transfer of money from US to Canada is too easy