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Why your company needs compliance for international hire

Why your company needs remote work compliance for international hire | John Lee - Work From Anywhere

About Work From Anywhere

John: You want to hire somebody from a different country or will let somebody work temporarily in a different country. But how do you do it? Is it a digital nomad Visa? Is it an employer of record? You need to open a legal entity. Or can you hire somebody, for example, as a contractor?

The answer is different in different countries and different scenarios. So that’s what we do. We’ve built an automated platform that helps companies figure out ways to work or hire from anywhere all around the world.

What type of companies face this problem?

John: Yeah. It’s interesting, as every single company faces it. If you hire outside your country or let people temporarily work remotely abroad, I think it’s fair to say startups probably have a higher risk appetite and don’t have a huge budget. So their ability to pay for technology solutions around this is not going to be very, very high. So it’s typically companies with maybe more than 500 or a thousand employees.

As soon as you start to go through series A, B, and C rounds, that’s where you get investor due diligence, where they start asking you, hold on a second, you’ve hired somebody. Like a sales-generating role via an employer of record in this country. Why did you do that? You’re after creating a massive corporation tax risk.

So it’s when you go through those later rounds that it becomes something that’s more, more important. And, we find that the maturity of companies is typical. The threshold is once you go past a few hundred employees, that’s where you really start to pay more attention to the stuff. Because you start getting the fines or the risks of running into it.

What are the biggest risks of temporarily working remotely?

John: We surveyed over 110 companies employing 1.7 million people around the world. And the biggest risk when it comes to temporarily working remotely abroad is a risk called permanent establishment. This is basically the risk that if somebody, for example, let’s take a very simple scenario, somebody says they want to work in the South of France for nine months in a year, and let’s say they’re in a sales generating role.

It’s easy to overcomplicate tax, but actually, if you break it down into fundamentals, if you have somebody who is making sales from the South of France for nine months of the year, yes, of course, they’re going to have an individual tax residency issue. Still, they’re also going to potentially create a corporate tax residency issue for your company.

Why? Because they’re essentially selling from a different territory. And of course, what happens then is countries like, in this case, France will come along, and there there’s a risk that they might say: Hold on second. This person has generated X hundred thousand worth of sales or millions worth of sales. We deserve some of the corporation tax profit generated by those activities.

So again, you can make taxes very complex, but if you break it down as fundamentals in many ways, it’s quite common sense. And so that’s what permanent establishment or corporation tax residency risk is. That’s the number one risk.

The second one that’s a huge one is visas. So if somebody’s working in a country where they haven’t got the right to work there, for example, or they’re breaking their local Visa immigration laws, you can go to jail for that on top of fines. And what also causes an issue is that, let’s say it’s a country where you want to hire a lot of people from in the future, well, you could be banned from hiring there. So, you know, the consequences can be very severe, and you can’t fix backward an immigration issue.

You can maybe rectify tax issues sometimes by paying fines and whatnot. But for immigration, you really can, in some countries, go to jail in plenty of countries if you violate immigration law.

When should companies think about remote work compliance?

John: Yeah, exactly. I mean, thankfully, there are lots of solutions out there that help companies navigate some of these risks. You’ve got employees of record that have seen explosive growth. They help with individual tax risks and employment law, and they help with many, many of these challenges.

You also have technology platforms like ourselves and others that help manage some of the holistic nature of these different risks for work & hire from anywhere. And you also have to oversee tax and employment law advisors and immigration advisors as well, who’ve always been there.

And so I think there are plenty of options on the table depending on how big your risk is, what you’re looking to do, and what countries you’re looking to allow. But I mean, I think the most important message is that it’s crucial to know where your employees will be. Where you want to hire from and where they’re going to be working from.

And certainly, to know if they’re working in countries that have a particular risk in one area, you need to know what you’re doing.

How does your Work From Anywhere work?

John: So anybody can go onto the website, wfa.team, and they can actually take it for a seven-day trial demo version if they want and play around with it. But essentially, how it works is companies go in, and they, first of all, set their risk appetite for the different risks. If you are a heavily regulated bank, you might have a lower risk appetite, so maybe you don’t want to let people work remotely abroad for very long or might not allow it at all.

Whereas maybe if you’re in the technology space, in the battle for talents, for technology engineers, you might have a higher risk appetite. You know, and if you look at the likes of HubSpot, they allow up to 90 days of work from anywhere, for example. And so setting that risk appetite is we allow ’em to do that in the platform, but then what happens is that they go in and run a scenario, it’s like 12 questions. Typically that doesn’t take longer than like 30 or 40 seconds to put in. And that goes into our automated algorithm that then spits out the risks of this scenario for a higher money-worth or lower money-work, but most importantly, then tells ’em, well, what next?

What’s the solution? Is the answer to look at a legal entity, an employer of record, a digital nomad visa, or a contractor? And it shows them the attractiveness of each solution as well as the cost. And then we also can recommend different solution partners along with that as well. So it’s kind of a holistic framework.

It’s like you’re step one in deciding when you want to work or hire from anywhere. If your employees are requesting out or your talent acquisition teams are looking to hire somebody from a different country, okay, what, where do we start? Is it an immigration solution? Is it an employment law solution? An EOR solution?

Is it starting with taxes, for example? It really depends.

What are the best features of Work From Anywhere?

John: The key features are really the simplicity of the platform. So taxes are very complex. So is immigration, and so is employment law. The key feature for us is the user interface that allows users to empower themselves and own their own compliance risk to basically very quickly using a literally very simple input form, put it in. And that will then show them straight away the risks and the solutions.

Typically in the past, companies had to go to tax advisors. They would pay three, four, $5,000 for this. They would wait, you know, 3, 4, 5 weeks typically. And the problem is that it’s far too late. Because it costs a lot of money and takes a lot of time.

Whereas with this, you immediately get an answer. What are the risks, and what is the likely solution? So that’s probably the biggest one that really hasn’t been in the market before.

The pricing starts at $12,000, where you get a couple of users for that, and it basically goes up from there. So it’s per-seat pricing, basically. But that’s how it works. Yeah.

How many employees are looking to work and travel?

John: Yeah, it’s a good question. So it really depends on how you define the market. So if you look at, for example, the market for traditional digital nomads who might typically move around from country to country every couple of months and are really, truly location independent. That’s a growing market, but it’s a small market.

It’s maybe 15, 20 million people. Maybe 25 million people in the world, depending on how you define it. But the really big market is the market where people have a fixed base like maybe based in the US, but one might be traveling for a month or two or three months a year. That’s like the international remote working market.

So that’s a huge market. I’ll give you some numbers here. American Airlines pre-pandemic, when they looked at their numbers of, what they call blended trips, people that were going on a business and leisure trip, that was typically 20 to 25% of their travel. Whereas now it’s between 50 and 55%. So literally, the majority of travel is now blended, and the main purpose is still the same.

So you’re still mainly going on a business trip or mainly going on a leisure trip. It’s just you’re tagging on business or leisure onto that particular trip. So it’s a very, very interesting market, and that’s one that’s growing very, very fast.

What companies are you helping?

John: Yeah, so we’ve had a number of them basically, but the reason people come back to us is that all of the solutions to date have focused on just the risks, whereas we actually focus on showing you what the menu of solutions is for you. And so that’s been the ones that come back to us are ones that typically have between 5 and 15,000 employees, basically.

They’re typically the ones that are looking to grow their global talent pool, for example. But they’re just unsure how, and that’s the sweet spot. So they have the maturity to recognize their huge risks here. But at the same time, they know that the traditional solutions might be too expensive for them.

So that’s kind of our sweet spot, is that kind of mid-market segment within the enterprise section.

Deel is one of Work From Anywhere’s partners

John: Yeah. No, Deel is not a customer. Deel is one of the employers of record that we recommend. So Deel has experienced enormous growth. Employer of record model is very, very exciting.

So there’s a number of different players in the employer of record market, basically. Yeah. So our solution will tell you if an employer of record is the right solution to use in a scenario. And then what we do is we recommend, here’s a selection of employers of record. So it’s about kind of matching the right employer of record with the right kind of customer.

Yeah, exactly, partner. But we don’t get any referral income from any of the referrals that we send on. You know, for us, we’re that kind of independent objective marketplace from that perspective that we help recommend the right EOR for the right customer, let’s say.

But Deel has experienced fantastic growth. They’ve been an enormous success, and I think it’s very exciting to see what they’re doing. But what’s interesting with Deel is they’re going, you know, they’re not just doing employer of record model, they’re going beyond that as well. So I think you see it from many of the employers of record, they’re expanding beyond just the core EOR model that’s been there.

So if you think of, like, so, for example, Deel, what’s nice, you know what Deel is. They are in that EOR market very, very attractive. If you think of us, they’re like the almost, in a lot of ways, step two. So once you know you want an employer of records, you’re gonna go to the likes of Deel, for example.

But that step one is figuring out if is an employer of record the right solution for you in that scenario. So that kind of complements each other quite well. All the employers of record kind of complement that. We help the clients and the companies figure out when is the right moment to use an employer of record, and then that’s when you engage with the employers of record.

But to be fair, the employers of record themselves, mind them, will also be able to help you. They’re quite helpful with a lot of the questions that companies might have.

How competitive is the remote work compliance space?

John: Yeah. Yeah. So the problem we’re solving, it’s typical international remote work compliance. And it’s very competitive. It’s a very interesting market. You know, we actually wrote an article on the technology solutions that help with international remote work compliance.

And you’ve got, on the one hand, what you call more established players, what we call the oil tankers. Very good solutions, very robust, where you have the big four accountancy firms have some solution. You also have great companies like Topia, like tracker software technologies, and ECUs, for example.

And they’ve got these established platforms that typically help a business travel compliance, but also now introducing remote work, like temporary work from anywhere compliance as well. Where we said is that we have basically temporary remote work compliance, but also “hire from anywhere”. So to help you identify if you wanna hire somebody, structurally, that’s kind of how we differentiate ourselves.

But on the higher one where we stand, you’ve got companies that focus on one segment. Like typically, the employees of record do the employee record model very well, for example, within that. So it’s a very competitive market, but that’s a good sign.

It’s a sign, it’s an interesting market and a growing one.

When did you start the company, and how did you come up with the idea?

John: Started the company two years ago.

Well, yeah, I was the senior finance leader of a $4 billion division of a 14-100 company. I traveled to 150 locations across Europe over a 10-year period. So I dealt with a lot of these challenges and risked myself. I had been an ex-pat living in multiple countries and gone through tax advisors, for example.

And so two years ago, we could see that there was gonna be, you know, my previous startup was in travel, like leisure travel, business travel, and global mobility. And so I could see that there was going to be what I call, this work from anywhere market at the time, it didn’t exist at the time, but when we were in Covid, I could see that there was gonna be people that would be going, you know, a lot of people looking to work remotely abroad.

We had been digital nomads ourselves, so we could see it was possible. We could essentially, when we did our surveys, we could see tax was gonna be the biggest issue. So kind of all started from there.

So right now, we have a team of about 10 people, a number of people that are direct, and a number of people that are indirect basically.

But we’ll be growing over the next couple of months. But they’re based all over the world. So my co-founder, Donald, is based in Australia. I’ve got Malda, our head of global mobility strategy, based in London. And we have a number of teams gathered from all around the world as well.

How do you coordinate your meetings with all these different time zones?

John: Yeah, I’ve learned from the best people, like Darren Murphy and Chase Warrington, for example. They talk so much about asynchronous communication, and so we really fully leverage that for us. That’s really, really important.

Well, I think there’s been a lot of good guidance. I think GitLab has really good guides on asynchronous communication. I also check out The Doist blog. They’ve got some good guidance as well.

But the fundamental thing is it’s more than just how we communicate. It’s also how we manage and how we trust. So I think moving from, when you’re in an office space, you can see everyone, all the time. Whereas when you go into a remote setting, it’s very much about hiring good people, trusting them, backing them, and giving them clear guidance.

And having clarity on both sides, both from the team member and the manager, for example. But we manage the team in a kind of collaborative way. Trust is very, very big. Using asynchronous communication tools like Loom. We use Slack, but we turn off notifications. It’s very, very important.

So it’s a mixture of different things. We’re not experts on it. I wouldn’t profess to be. I’d always recommend people like Chase and Darren and those who are fantastic entrepreneurs. Brendan Hannigan is another one as well.

But that’s how it works for us.

What is your vision for the future?

John: The vision of the future is that… I think companies will continue accelerating their movement towards a globally distributed, agile workforce. And there’s going to become more and more of a need to figure out the how. I think we kind of see ourselves as being key building blocks for companies when they are looking to tap into that global talent pool. And really understanding what the risks are.

Does that align with the risk appetite? What are the solutions to this? We feel that there’s a really interesting market in that space, and we’re very excited about the next couple of years. So for us, if companies can understand what and how forgetting about the don’t show me problems, show me how we can navigate those problems.

Get me to the solution. If they can take that kind of mentality, then we feel there’s gonna be many, many more millions of people that will be able to access the opportunities that international remote work offers.

What was your biggest challenge?

John: I think the biggest challenge was… a great question. For me, I think… If I’m honest, I think with any new ideas, you’re trying to shift decades-old habits and mentality of an industry or multiple industries. And so probably the biggest challenge is that… I would say the best advice I always got was to, as an entrepreneur, skate to where the puck is going.

And that’s what I’ve always tried to do throughout my life and my entrepreneurial journey. Right or wrong. And with something like this, with the vision of what we had, we were definitely ahead of the curve. I’ll give an example. Like when we started the business, when I spoke to companies in early 2021, I tried to explain to them how Work From Anywhere would become a key employee benefit and that there would be a business case for this.

Not for every company, because there are some companies for which just not possible, like a heavily regulated bank, for example. But for many companies, there would be, and many companies I spoke to at the time pushed back and said, no, there’s gonna be a return to the office.

Many companies said, no, there’s no business case here. It’s too expensive, the compliance is too high, and it’s not practical. And actually, slowly but surely, over the following year and a half, more and more companies began to recognize that there’s a really interesting business case here. I think that’s where for me is exciting – where you’re shifting, you’re trying to move the conversation forward in your own small way and influence an industry and influence more people to get that opportunity to be able to work or hire from anywhere.

And also from the employee from the company perspective as well. You’re getting closer to your customers. You’re being able to be smarter with your global workforce cost and able to access a deeper talent pool. There are also diversity and inclusion benefits.

Spotify, for example, reduced its talent attrition by 15%. They increase their DNI considerably when they launch their work from anywhere or policy. So for me, that’s something that shows the business case behind these numbers.

What is your best strategy for gaining new customers?

John: Yeah, it’s a good one. Good question! For me, the most important one was building authentic relationships. And that’s been really critical for a long period of time: catching up with people, helping them, and not expecting anything in return. Even in the early days, when we did not even have a product to sell.

And not being pushy, right? Just trying to understand people’s pain points and help build authentic relationships. That really matters in the industry. It’s something that I really, really believe in. And yeah, I would say probably that’s been a really, really important aspect for us that also relies on being fair on the personal chemistry and connection.

And obviously takes a lot of effort to go through so many different calls, helping every people out. But that’s something I believe has been very important for us.

What is your story, John?

John: Yeah, so I started off, I always wanted to become an entrepreneur, and I was always inspired by going to a number of talks by different entrepreneurs back when I was in college in Dublin and UCD. And one key message that came again, again, and again from the different entrepreneurs is that they said that for those that didn’t have a finance background, it really hurt them. Because they had accountants that were showing them numbers and having a huge impact on the business, and they didn’t understand them themselves. They said it was like a different language. So I used that as motivation to decide then to do a Master’s in Accountancy, and then spent three years in Deloitte, where I became a chartered accountant.

During that period, I got to work with one of Ireland’s biggest companies quite a bit, traveled all around Europe because I speak a number of languages fluently, and then they hired me directly. That company was CRH, Arden’s biggest company. I spent the next seven years with them, working all over Europe and traveling all around the world.

Absolutely loved it. Did various different roles, internal audits, financial control, and business control. Finished up being the senior finance leader of a large division. But I got some of the best mentors I could have ever wished for.

But what was still aching at me was that I really still wanted to become an entrepreneur. And it kind of came to an inflection point when one of my mentors, who was the CFO of Europe, told me at the time, he said I told him I wanted to become an entrepreneur. And he said, John if you are gonna become. Do it now. You can always come back. You have a great career ahead of you here. There’s no, you know, if you’re gonna do it, then don’t wait too long cuz otherwise you’ll become institutionalized.

So, that’s what I did. So I did my first startup with my wife called Culture Me. Traveled around the world with her daughter Rose and lived in Thailand. Traveled all around Europe and had an amazing experience there. Started off as a B2C app. I had never built an app before. Then it was one of the best travel technology products in the world at the W Travel Awards in 2018.

With that pivoted then to business travel that required building an API, so a completely different distribution model. Go to market model. Launched the API in the middle of 2019. Got great momentum with that, and then Covid came along and wiped us off the map. So that was, that was a story of failure.

That was a really difficult one, even though we’d gotten so unbelievably close to success with that. So that hurt. But it took a bit of time off to recover the mind, body, heart, and soul. Started doing some consultancy work on the side and then started to work with the current team two years ago. And the rest is history.

Advice for somebody that is 18 and looking to work remotely and travel the world

John: Yeah, a hundred percent follow someone like Pieter Levels from Nomad List, he would be a really inspirational figure to follow in a lot of ways because what he’s done really well is he started multiple online businesses. I think the message would be to get into some kind of online business and find your point of difference, if possible, or find whatever works for you that you’re passionate about.

But ideally, something that would… If you are passionate about travel, avoid a career if you can that will keep you stuck in one place, like becoming, for example, it could be a doctor or a lawyer or something. For example, a specific to one country that doesn’t allow you to travel.

That’s why starting an online business can give you that location independence and that opportunity to travel that is extremely valuable. So I would say that. And I would also say if you’re gonna do that, don’t be afraid to try multiple different businesses. It’s okay. I mean, Pieter Levels, he’s very successful in what he’s done, but he’s launched over 50 different businesses, and most of them failed.

Fasten really failed. But a number of them actually worked and worked well, and he’s doing really well off the back of it. So I think failure and resilience are such critical components of any entrepreneurial journey. And for me, I think that would be my best advice.

What are the languages that you speak, and how did you learn them?

John: I speak fluent French, German, Dutch, and English, and I also speak some Spanish and Irish, and I’m also learning Portuguese. So hopefully, in a year’s time, I’ll have a fifth language to add to the fluent list. But we’ll see. Tricky when you’ve got three kids below six. I have a six-year-old, a four-year-old, and a one-year-old.

So it’s hectic. But yeah, I have to say I’m very keen to learn the language because we’re gonna be here for a good while yet.

I spent some time studying, well, I studied commerce in German in college, and I spent a year abroad living in Germany. But, other than that, I didn’t spend much more time living in Germany. I never lived in France. But I did live in the Netherlands. So for me, I just have a knack for learning languages.

I have a passion for languages. For me, it just comes much easier. And so yeah, how did I learn them? By listening to podcasts, focusing on the spoken side of it.

Like when I went to the Netherlands, Dutch was a very difficult language to learn. I lived in a place called Delved, where there were a lot of locals. They would speak Dutch in the local market, for example. And I joined the local sports team. I mean, take something you’re really passionate about, and when you’re trying to, you know, move in and settle into a new country, pick that particular passion point that you have. For me, it was rugby. I joined the local rugby team, and then that really helped me build a network there and helped me learn the language as well.

What’s your favorite software?

John: I have to say – good question. I mean, I clearly like ChatGPT, it is one that we’re all having great fun with now. One, but maybe that’s a bit too obvious. I think for B2B sales – HubSpot. It’s expensive. But they have a nice HubSpot for Startups program, which is startup-friendly. I’m finding that really, really powerful.

And then LinkedIn. It’s funny how things have gone with the different social media platforms over the last couple of years, but for me, LinkedIn has always been a really good platform for creating, you know? Where I find authentic connections. Of course, it depends on who you’re following and the content you get access to. But for me, I’m able to create some really strong connections with people from all around the world on LinkedIn that I wouldn’t have been able to do a couple of years ago to the same degree, let’s say. For me, it works very well.

Podcast Host & Guest(s)

Cristian Dina

Host

Cristian Dina

Managing Partner & SaaS Podcast Host @ Tekpon
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Managing Partner & SaaS Podcast Host @ Tekpon

As one of the founding members of Tekpon, Cristian has worn many hats within the company, but perhaps none shines brighter than his role as the charismatic host of the Tekpon SaaS Podcast. With over 200 SaaS industry leaders gracing his episodes, Cristian's insatiable curiosity ensures he always has one more question. Cristian is a community builder at heart, being the Bucharest city leader for SaaStock Local and the author of the best-selling book King of Networking.

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