71

Many of the high-tech opportunities for remote work require that you are working in the US. Why?

I am a US citizen, and I lived in the US until I graduated university. I am now living abroad. I have impeccable english, fully understand US culture, and I am willing to work american hours. I obviously would be responsible for managing my tax burden with my home country, and if travel to the US were required periodically, I would need to work it out.

Why should I be automatically disqualified for not residing in the US, if the entire company is composed of remote workers?

  • As a side note, is there an outsourcing firm you could team up with, so that instead of hiring you directly, the US company you want to work for could pay the firm an hourly rate? This might make the legalities simpler, at least from the US company's perspective. – user1602 Mar 28 at 16:53
  • 2
    Presumably you specifically mean US companies? Can you clarify? Not all companies are in the US – Lightness Races in Orbit Mar 29 at 15:25
  • @jpmc26, OP said he is willing to work American hours. – Catsunami Mar 29 at 16:33
  • @LightnessRacesinOrbit I mean US companies, and I specifically mean US citizens living abroad. I will edit. – Shifra Mar 30 at 18:22
  • 1
    Essentially same question on Money at money.stackexchange.com/questions/102205/… – Henning Makholm Mar 31 at 9:59
191

Why do remote companies require working in the US?

Those companies are likely based in the US and don't want to deal with the legal and tax complexities of having employees who live in multiple countries. It is complicated enough for some companies to deal with employees from various states within the US. Also having employees from around the world will further complicate legalities to the point that many companies would rather not deal with it.

  • Comments are not for extended discussion; this conversation has been moved to chat. – Snow Apr 1 at 12:46
88

There are many potential reasons for a company to discriminate based upon your country.

Tax Reasons

Taxes can get very complex, very quickly. Even if your country allows you to take on all of the tax responsibilities, which is relatively uncommon, the company will have to spend money even getting an expert on your country's laws to confirm this. Otherwise, the company will have to comply with tax laws of the US, the state the company is in, and your country. In some cases, it might even cost the company more money to comply with the tax laws of your parent country than your salary. It is not even that uncommon for smaller US companies hiring remote workers that must be based out of only one state, because it is costly to even comply with multiple US state tax and benefit rules.

This also raises issues with tax incentives that might be offered by the either the US federal or state governments. Some locations might provide tax breaks for employing local citizens.

Labor Laws

Labor laws vary even between different states, and vary drastically between different countries. There is a lot of cost involved with even identifying all of company's responsibilities to you—let alone complying with all of the applicable labor laws. How many days off a year do I have to give you? If you have a child, do I lose you as an employee for 6 months, but still have to pay you? What am I allowed to do with your employee data, and how am I required to store it?

Technology & Export Laws

There are laws that restrict the flow of technology from the US. Take for example, encryption export laws—although these have been greatly relaxed in recent years, there are still restrictions on what encryption algorithms are allowed to be used in products sold to a non-US country. This also leaves the potential for gray areas—it can be difficult to determine the legality of having someone who lives in country A working on technology X. In some cases, this could either be very expensive to figure out & keep track of, or the law might be ambiguous enough that it is easier to simply not have to worry about this becoming an issue at all.

Intellectual Property Concerns

Countries tend to have different laws dealing with IP, and some countries are known to ignore IP claims of other countries if doing so has the potential to benefit them (as an example, look at claims of IP theft in China for the last few years). It is potentially easier to protect your company's IP if both you and your employees are following the same rules. Also, if an employee steals a company's IP in the US, there is a clear path for the company to take legal action against that employee.

Marketing

Due to how many jobs have left the US to go overseas, it can be useful for marketing if companies are able to say that their products are fully made in the US, or that they only employ US citizens.

Government Contracts

Within the US, there are multiple levels of government, all of which have their own rules on who they allow to bid on and win contracts for government work. Government work is usually one of the most stable, and sometimes the most lucrative, sources of revenue for a lot of these companies. For example, if your US company has foreign-based employees, and is fulfilling a contract for the US Department of Defense, your US-based employees might not even be able to talk to non-US-based employees without extensively documenting every time they have a conversation. There might also be state or lower governments who require or give preference to companies who are employing people who work in their districts (in an attempt to keep taxes and jobs as local as possible).

Security

Companies will generally want to vet that you are who you say you are, that you are not a criminal, and that you do not partake in illicit drugs. They will usually already have a partnership or contract with a company who can perform background checks on you. In the US, it is not uncommon for even retail style jobs to require you to undergo a background check and drug screening. If you are not US-based, the company might not be able to get a reliable, accurate background check done, or might not want to spend the time and money it will cost to find a company in your location to complete it.

This also concerns cyber security. Depending upon the security controls for a given company, they might not feel comfortable allowing VPN access to their internal network from a foreign country, or they might not want to face increased risk of the data you might have stored becoming compromised.

Conclusion

The US is a large country, and has a lot of highly skilled individuals. There are not too many remote jobs where it would not be possible to find a US worker who is able to complete that work. Given that it almost always possible to find a US-based worker to fulfill a role, and all of the potential pitfalls listed above when hiring a foreign worker, it makes sense that non-international US-based companies would primarily hire US-based workers.

  • 1
    +1 Only for the effort of thinking in so many reasons, well done! – Chococroc Mar 29 at 10:52
  • 3
    Could be a social aspect too. As in, "let's support homegrown talent first and foremost" (more fundamentally than the ensuing marketing benefits) – Lightness Races in Orbit Mar 29 at 15:26
  • 2
    Healthcare. Most countries don't charge citizens for their healthcare, they have some way of recovering it from the employers. That would get weird. – Harper Mar 29 at 22:52
  • 2
    @Harper: "They have some way of recovering it from employers" falls under "Tax". – Ben Voigt Mar 30 at 5:37
  • + for export laws – A.K. Mar 31 at 3:56
10

As a permanent employee, your employer will have tax and social security costs related to you, which would be complicated by your being in a different country.

Your employer would not necessarily know what these implications are, and there is no incentive for them to find out; they can generally get an equivalently qualified employee in the USA. The easy solution for them is to just recruit within the US, and preferably within the state where they are based.

  • The right way to handle these relationships is to have the foreign employee set up a self-employed legal business entity. Then there's absolutely no complications, you just pay a foreign business for their services. – JonathanReez Mar 28 at 19:12
  • 2
    @JonathanReez but at that point, do you "employ the non-US citizen", or do you just do business with an overseas company? – Patrice Mar 28 at 19:56
  • 5
    @JonathanReez Except that then you have to figure out the legal framework under which you'll deal with this foreign entity. And deal with the risk that comes with the difficulty of taking legal action in a foreign country. And the risk that the tax authorities will say, "So, er, that person who works for a single-employee corporation, and who spends 100% of their time working for you, under your day-to-day direction and management? That's a sham and we consider them to be your empoyee." – David Richerby Mar 28 at 21:06
  • 3
    @JonathanReez My point is that the legal agreements you need with an incorporated contractor are different to the ones you need with an employee. So you need (expensive) lawyer time to draw up those agreements. If the *cough* employee breaches those agreements, suing them in a foreign country is difficult and expensive. And classing somebody who is functionally an employee (works 100% for you and is under your day-to-day management) as an external contractor is a form of tax evasion that tax authorities are well aware of and often pursue. – David Richerby Mar 28 at 21:25
  • 3
    So setting up this arrangement as hiring an incorporated contractor might be the "best" way of employing somebody in a foreign country, but it's still a lot more hassle than hiring somebody domestically. – David Richerby Mar 28 at 21:27

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.