I am entrepreneur (also studied engineering) in Europe. I have only worked remotely most of my life.
Main problem is bureaucracy. The US is a big place and it is United from West to East Coast.
In Europe, once you start making lots of money, every country you touch wants your money. So if you hire a French guy the French gobertment will love to tax YOUR ENTIRE business based on their socialistic views of the world, even when you are located in other country. Rinse and repeat with any country you touch.
Instead of focusing on the tech side of things you have to make an incredible effort with bureaucracy alone.
The advantages of remote working are very clear, but so are the disadvantages: People can goof all day or do the laundry, take care of the kids at the employer expense. The employer could also abuse taking extra hours of the employee for free.
For neither the employer or the employee to abuse each other or just being productive when nobody is watching you(directly, of course I know what my people are doing even when I am not in front of them)a series of techniques has been developed . It takes practice, effort and time for people to get used to it.
But yes, once you try it you will never want to go back. You can never eliminate the need to meet your coworkers from time to time(once a week or month) though.
Most business in Europe are old and big, they do what has been proved to work(in a pre Internet world) for decades. They move slowly, but they move.
Big companies operate over the principle of "nobody ever got fired for doing what used to work". When they see success examples of other big companies doing remote working, they will follow. But today only a few jobs, like programming or personal assistants could be completely done remotely.
My advice is to create your own company and to take advantage of this problem, you know in the business world we call them "opportunities". As remote communications improve this is going to explode.
Always-on audiovisual communication tools can fix the problem of employees not being on the job during work hours.
And the multiple taxation is not an issue anymore - your company and you are taxed by location within the EU (assuming you're a citizen of the EU). Hell, you can even take advantage of it by establishing a residence in a cheap country but actually living elsewhere. Your company is taxed where it's founded, but there are some issues with legally operating in other EU countries.
Taxation is not the only legal hurdle, though: Which social deductions apply? Which labor laws apply to you if you work in your country but are employed in another country? Which rules will apply to you if you become ill or get pregnant? Who has to pay your retirement benefits and where do they go? At what age will you be allowed to retire? Will hiring you mean that the company might inadvertently establish a permanent establishment abroad at your home for legal and tax purposes? etc. pp.
There are answers to most (if not all) of these questions out there, but finding the right answer can be tricky and takes a lot of time (which, for a company, translates to a lot of money being spent on lawyers). So, as a company, do you spend all that time and money and take the risk that you made a mistake somewhere and the employment contract will be governed by rules you did not expect - or do you rather hire someone who will move to your place?
Not really true. Most countries have a residency rule (for personal income) that if you live more than 165 days (or something to that effect) you will be taxed as a resident of that country. Even if you register a company in another country within the EU, you may still be liable to pay corporate tax on your residence country as some countries also have conditions on that (if you own more than X (usually around 70%) of a company, and the company country is considered a low tax jurisdiction (this can depend for some countries where some have lists, others have a corporate threshold and others have countries corporate tax < owner resident country corporate tax - 10% is also a tax haven) they will want to tax that company as a resident.
As others mentioned, while more common, intra-community workers are a bureaucracy nightmare if you don't register a subsidiary in the employee's country, which if you do, then you have tax/social security+other stuff you need to take care in the employee's country.
Best way to do it is for employee to setup it's own company in country of residence and play by the rules, and then just be paid for services rendered and be responsible for all taxes/other.
But be aware that many European countries know laws against quasi-self-employment ("Scheinselbständigkeit" in German) to avoid people becoming self-employed to avoid social security taxes. So, even if you set-up your own company but this company only serves one client (your de-facto "employer"), you and/or your employer might be liable for social security payments neither of you did expect. So even such a set-up might be too risky for some companies to consider.
In Germany itself, that would indeed be a major issue. Imagine, however, a company from Canada employing a German in France? Which country would manage to get in a position that they could collect social security payments? Germany would not see any part of that situation under its eyes. Canada just sees invoices coming in from abroad. France has no clue as to what that German does or with whom. This situation could last for decades and no government would be able to even ask relevant questions. You see, that German is not a resident of Germany. I cannot imagine the German administration sending questionnaires overseas. The French may want to collect local taxes, but they would have no serious basis, or even information, for collecting income tax or social security contributions. Where exactly would they be verifying anything? In other words, if you confuse the situation sufficiently, not one of those slow and bureaucratic government administrations could ever deal with it. Not in our lifetime.
Portugal has the same issue, if 70%+ of your company income is from a single entity, the company is taxed as a self employed person and not a company. So technically, the paying company doesn't have to pay nothing, but the receiving company will be responsible for those contributions. But there are ways around it and limitations, for example, in PT doesn't apply if you have employees or if the volume of business if over a certain amount or if ownership is divided by two (or more) people (if you are married, you can name your partner as a shareholder when you create the company and get around it easily)
That German would be paying French income tax, since he's a resident. Unless he's listed as a resident in Germany and living in France without registering.
The other taxes, well, it's up to the person. If he wants a pension, he'll pay them in some country.
But what do I know, everyone I know is breaking some law in regards to taxes, so I might not be the best person to listen to...
The solution is to incorporate in the member state where you live (and perform the services), and invoice your clients for your services as a company.
If you want to hire a French employee, you can incorporate a French subsidiary, and you invoice his wages (+ some operating expenses) from your main company to the subsidiary. Doesn't cost much. Clean and simple.
I have been speaking to a French lawyer about this exact scenario (UK company employing a French resident).
I've been quoted a cost of around 8% of salary to be retained by this subsidiary- hardly insubstantial.
Alternatively they can put a framework in place so that the UK company can directly employ in France. Here the costs are lower but coming in at at least 3000 euros is by no means small change.
I suppose the cheapest option (I haven't investigated) would be for the French employee to incorporate themselves and deal on a corp/corp basis. However the admin cost is then incurred by them and they wouldn't be covered by us on French employment terms.
The admin for employing a UK person is vastly easier and cheaper. We already have the contracts and accounting in place. I have been very surprised that cross-border hiring is so difficult/messy/costly in Europe.
> My advice is to create your own company and to take advantage of this problem, you know in the business world we call them "opportunities". As remote communications improve this is going to explode.
Any advice on where to start? How to find customers? Is there a good lecture about this topic?
Main problem is bureaucracy. The US is a big place and it is United from West to East Coast.
In Europe, once you start making lots of money, every country you touch wants your money. So if you hire a French guy the French gobertment will love to tax YOUR ENTIRE business based on their socialistic views of the world, even when you are located in other country. Rinse and repeat with any country you touch.
Instead of focusing on the tech side of things you have to make an incredible effort with bureaucracy alone.
The advantages of remote working are very clear, but so are the disadvantages: People can goof all day or do the laundry, take care of the kids at the employer expense. The employer could also abuse taking extra hours of the employee for free.
For neither the employer or the employee to abuse each other or just being productive when nobody is watching you(directly, of course I know what my people are doing even when I am not in front of them)a series of techniques has been developed . It takes practice, effort and time for people to get used to it.
But yes, once you try it you will never want to go back. You can never eliminate the need to meet your coworkers from time to time(once a week or month) though.
Most business in Europe are old and big, they do what has been proved to work(in a pre Internet world) for decades. They move slowly, but they move.
Big companies operate over the principle of "nobody ever got fired for doing what used to work". When they see success examples of other big companies doing remote working, they will follow. But today only a few jobs, like programming or personal assistants could be completely done remotely.
My advice is to create your own company and to take advantage of this problem, you know in the business world we call them "opportunities". As remote communications improve this is going to explode.