Why are most Startups asking for US Remote instead of just Remote?

- Culture and language. Even if you compare US vs UK, the UK is much more European in it's approach to work. If you want to exploit people and have them dedicate their life to your company, better stick to US workers.

- Working hours. If you are on the West Coast, good luck finding someone in Europe who will be available at 3pm your time.

- Superiority complex. I get the impression a lot of Americans treat everywhere else like it is a third world country. I work for a US company that has a branch in a post-Soviet EU country, and when the C-levels were discussing expanding our team, they were talking as if there would be a queue of people waiting at the door to interview.

Taxes and employment laws are really not an issue, there are plenty of ways around it, especially if you are a small startup. As others have pointed out, the simplest way is to treat someone as a 1099 independent contractor. You pay them gross, and let them deal with all their own tax responsibilities. If you want proper employees there are agencies everywhere who will deal with this for you, and in a lot of cases government agencies will help you and / or give you tax breaks as they want you to invest in their country.

(Source: As a European, I've worked half my career remotely for US companies)

Huge hassle regarding taxes, legal details, etc.

For example, if you hired someone in Israel, you are mandated to pay taxes, contribute to pension plan, etc. There are labor laws details that you need to know how to work through, etc.

As a fine example, let's say that you have hired someone in Israel and they worked for you for 5 years. You covered payment and told them that they'll cover local taxes, etc.

You now want to fire them.

The following sequence of events happen:

* They sue for wrongful termination (there is a particular process to follow) * They sue for missing pension contributions (the law says that if you didn't contribute to the pension, you are both civilly and criminally liable). And it can be that you are found to be effectively the "pension fund". * They sue for severance pay, which is calculated as 1 month of salary X years worked.

That can be a huge surprise for you.

That is leaving aside things like what happens around work accidents. Did you carry local insurance for that? Or are you on the hook for millions because of that?

Those are all things that can be solved, but they are a major headache.

Why bother? Recruiting in another country, figuring out what work experience or schools are legitimate etc is extra hassle. Taxes, different holidays, language/communication problems etc.

US talent pool is already deep enough.

If they want to use other countries it’s just for lower wages.

It doesn't always matter. But sometimes it does. A great deal in fact.

Language, culture, verifiability (even on the level of being able to do a standard background check), payroll, legalities. And all the other reasons they aren't always keen to use offshore people, even if it seems "cheaper". And did I mention language, culture?

The different countries payroll can be handled by a decent SaaS itself.

Throwing a different payroll system into the mix for the the sake of 1 or 2 resources can easily end up being more trouble than it's worth.

We have a pretty geographically diverse remote team. It's wildly complicated to deal with, both from a team side and the HR side. Coordinating conversations with everyone when they're spread all over the world leaves very few possible times and those times are needed by everyone, so there's a lot of meeting collision. And employment law is different everywhere. You can't afford to setup "offices" in every location, so everyone is a contractor/consultant. They work full time and have an equity plan but it's all a bunch of little personal businesses. Focusing on a few key locations makes this more manageable.

Big companies can afford the investment into many small locations and they can afford having the regional expertise to avoid running afoul of local and federal governments. In an ideal world, we'd make this easy for ourselves but the world is not ideal.

Tax, work rights, compliance, labor protections and entitlements all get pretty complicated. Some countries have high levels of public holidays, rules around dismissal that get legally complicated in the case of downsizing. It's not simply a thing that can be handled by a SAAS.

I would assume legal compliance in more than one way. Some countries don't allow you to fire employees as you wish, you have to comply with worktime regulations, etc. Your ability to ask for noncompetes, or have the employee sign over their rights to all IP concieved during the employment may also be challenging. If you mess up, you might get sued in an unfamiliar jurisdiction. All in all, a whole lot of legal work that is only worth it if you can't fill the position otherwise.

You're asking why businesses aren't employing people working across timezones AND deploying a second payroll system AND ignoring the cultural/benefits package incl. gov based subsidies the business misses out on due to hiring internationally AND the tax complications...

Have you ever started a business and run it with a team of folk from across the world on a budget (not including just contracting people via UpWork etc)?

Maybe working with employees from different countries can cause a great stress for some teams.

Employees can be upset that you hire oversea. They expect that coworkers there are underpaid, and that you hired these people for that reason. So the image of the company gets a hit even among your workers. And if you go oversea for workforce, they could think that their job will be outsourced as well in the future. And you won't get the same engagement.

Differences in culture do exist as well. I have heard wild stories about outsourcing in India.

Jet lag is also a thing.

kidgorgeous's benefits. govt subsidies can be also right. I think the YC themselves funds nothing but local startups (do they ? I haven't tried to fund a startup yet) Anyway, it's difficult to promote a company that doesn't have any local impact.

However, all the tax and labor laws things are overstated. Countries like France, Romania, India, or Morocco have efficient consulting firms. Large and small companies from any industry work with them everyday on every kind of subject (IT, engineering, ...)

The most obvious reason is taxes and complications with the IRS. The current legal immigration and taxation systems have not foreseen that people from other countries are not living in the U.S. while working in the U.S. The assumption is that once you’re hired by a company in the U.S., you are either working there with a local work permit (for the U.S.), on a work visa, or sent to a different country coming from the U.S. (being either U.S. citizen or having the U.S. residence permit).

Most _US_ startups, you mean.

Startups actually do exist outside of the US, believe it or not. And you may find that those are a lot less picky than US ones about the location of remote workers.

This is very recent change. There should be some benefit for the company too.

I know a company which hired the best MIT PhD but they also hired the best IIT PhDs for the work. Both of them do equally good. But the IIT PhDs are more cost effective and hence they expanded the program in India.

All the comments here focus on the complexity/beaurocracy/contract/etc, without realizing there are companies like Deel that take all that complexity away. Also, some (smart) startups also have full time contractor agreements for ex-NA remote employees, so you are considered an employee in every aspect internally but rather than payroll you send an invoice every month. This works well because most employment contracts are tied to local market rates and bands.

@prakhar897 The question is based on wrong premise. Developing countries like India don't have engineering talent and that's the reason why US startups do not want to hire any unskilled employee. They are giving these lame responses to these unskilled candidates because they don't want be seen as rude.

I'm guessing part of the reason for startups specifically is, US remotes will be shown as employees, while non-US remotes will technically be contractors, thus not counting towards the head count - which is one of the things that determines the valuation once the company is flipped in an IPO or acquisition.

I've worked at a lot of places that posted us only jobs while also employing many overseas independent contractors.

Typically when I've seen job postings US only they're looking for some type of coverage during US business hours; on-call, supporting juniors, meetings with c-suite, etc.

Some employers have gov or otherwise paranoid customers that require data not leave the country.

Does it make sense for a non-US developer to just set up an LLC to offer his services at US rates?

I can deal with 3 in the AM meetings or whatever if the pay is good anyways.

Startups often prioritize US remote candidates due to various factors like market access, time zones, and talent pool density.

Does it matter if you are a US citizen(or an EU citizen for a similar case) that lives in another country?

Timezones and additional administrative overhead mostly.

Most don't. Most in the US might.

because remote according to them means "be close enough so you could just as well be on site"

being remote or not doesnt affect things like work visas and payroll/tax/benefits differences

because of legal and tax reasons

and because they want to have the idea you are local

benefits. govt subsidies