Ask HN: What is the best jurisdiction for internationally distributed teams?

With a fully remote setup like you describe, what are the mechanics of hiring a foreign team member?

Do you need a subsidiary or some legal entity in the foreign country in order to pay employment taxes? If they're direct employees of the US entity, what's their legal status in the US? Can you avoid all these questions by using foreign contractors rather than hiring foreign employees?

These are all really good questions. I am not sure. I think that you could work around these issues by either "hiring" people as contractors or using something like https://remote.com/ or https://www.letsdeel.com/. But I'd definitely be interested in hearing how other companies solved this problem (which is partially why I created the post).

I've heard lots of people talking about Estonia but can you name any international remote-first startup that became successful and raised money with an Estonian entity? I don't and this makes me somewhat suspicious :)

I recently had to consider this and was quite surprised to discover that the US was the best place. Compared to most countries the US has been a tax haven for a long time, but the 2017 tax change meant that in most cases the US would be a significantly cheaper place to recognize revenue.* Also the mechanics of getting the boring things done is significantly easier, as noted by the Germany post cited in your question.

Because of the US FATCA law you may have trouble opening a bank account in some countries (smaller entities simply can’t be bothered with the paperwork the US demands on accounts for “US Persons”, a term which has specific meaning). In practice this just means you have to deal with larger banks.

Note I’ve been a US resident for decades, and started several companies here, but am not a US citizen and have lived and worked on three other continents as well so had no prior bias.

* Note 2: this business is intended to be quite profitable relatively soon, rather than a “focus on user growth and toggle the profit switch later business.

One thing to note if, as a Dutch person (and possibly even if you're another European), you incorporate in the US:

Many Dutch financial institutions hate people who have the "US person" status. If you own a US-incorporated company then I believe you will gain that status. Banks, lenders, stock brokers, etc will either refuse to do business with you, or will give you a lot of paperwork headache and/or charge you more tax. I think this has to do with the fact that US persons have to comply with FACTA.

For example I have 3 stock brokerage accounts (1 for personal, 1 for pension, 1 for business). They all ask me whether I have the US person status, and 2 of them just flat out tell me that they won't do business with me if I answer yes.

Not sure whether financial institutions in other European companies also come with this caveat. But since it's related to FACTA, I believe they do.