[jokull]

Delaware company and then all team members get set up as contractors in their country of residence. If they are in the EU they can contract from where they are from but live within the EU - more flexibility. But putting people on payroll has a huge overhead - better compensate employees to pay a local book keeper to invoice and process their payroll. Encourage people who have not contracted to research what contractor fee covers their salary. It will be tricky to compare apples to oranges when it comes to salaries, not just because of different rates in different places, but because salaries are quoted differently and have different insurances. Where I'm from there's a compulsory payment from employer to the employees pension fund of choice. Salaries are quoted to include this payment. And on and on ... very different across countries. Contractor fee "normalizes" this and places some burden on employees to research what their USD contractor fee is. Ask people to invoice a week ahead of international transfer and transfer 1-2 business days before month's end. This will result in monthly salaries being paid out on time.

[WanderPanda]

I'm pretty sure this would be illegal for employees in Germany because of the "Scheinselbstständigkeit" (False self-employment?)

[codethief]

Does this also hold if your employer (i.e. your client) is outside Germany?

[tdullien]

Yes

[Aeolun]

I think the important thing there is that you are ‘actually’ independent? Obviously this isn’t the case if they make you deal with days off, forced working hours etc. But I can totally see someone just billing by the hour, paying their own taxes, as actually independent.

[morpheuskafka]

This will require research on each countries laws, some countries have very rigid definitions of what qualifies as employment and will not allow those payments to be classified as contract income, dividends, or anything else.

[jokull]

The way I do it, I set up a limited liability company that is just my own name. I then charge for services rendered and income goes into a company in my sole ownership. I then pay salary to the only employee (me). This is common and completely legal.

[logifail]

> I set up a limited liability company that is just my own name. I then charge for services rendered and income goes into a company in my sole ownership. I then pay salary to the only employee (me). This is common and completely legal

This approach exploded fairly spectacularly in the UK for many of those deemed by the tax office (HMRC) to be using it purely as a device to attempt to avoid being "on payroll"

https://www.gov.uk/guidance/understanding-off-payroll-workin...

Even BBC presenters were setting up "personal service companies" to try and avoid taxes (allegedly at the urging of the BBC) and ended up owing the tax office a bunch of back taxes.

[jokull]

The issue here is not calculating a fair salary - and its an insanely popular way to avoid taxes all over the world. Tax authorities turn a blind eye, I suspect because the practice is just too common among politicians and their friends.

This might not be an issue if the corporate income tax + financial gains tax comes out the same as payroll tax. The bigger issue here is that you can use the remaining funds to invest and losses form a tax deduction base. More commonly however people just cram as much personal consumption inside the companies before paying out the salary, even things like travel and dining out. In the EU, VAT is commonly quite high and you get refunds on that if the expenses are on the company.

[softveda]

You can do this in Australia too. A simpler way is use a labour hire company, they keep you on payroll and bills the client for your work (an agreement has to be drawn between them and the company) (you need to submit a weekly timesheet). They take a commission (which includes services to run payroll and provide personal liability and professional indemnity insurance) and remkist the rest as normal salary.

[csomar]

I highly doubt this is completely legal, maybe unless you are not expensing the company anything (and transferring all of the revenue as salary).

[jokull]

In my country it is but you have to pay a fair salary and only expense strictly business related things. At the end of the month it's not illegal to have some funds remaining - as it can be because of irregular income, a business reality for many (most?).

[Aeolun]

This is basically how all sole proprietors work right? You have more reporting requirements as a LLC, but otherwise the same deal?