Have you considered using an Employment of Record solution (EOR)?
Utilizing an EOR can streamline the process of compensating an international cofounder, ensuring legal compliance and reducing the administrative burden on your startup. This approach lets you focus more on growing your business while maintaining global operational flexibility.
Just make sure that the EOR is compliant with the country of resident of your cofounder.
Based on your response I am assuming EOR is compliant with US laws, allows compensating individuals that do not reside and do not have legal status in US and people employed through this can be considered an employee of the company. Is that correct?
Yes, an EOR can help you set up compliance with a US Laws, especially when it comes to reporting and tax obligations related to foreign operations. An EOR is particularly useful for compensating individuals who do not reside in the U.S. or do not have a U.S. work visa.
Individuals employed through an EOR can indeed be considered employees of your company in a functional and operational sense. However, legally, they are employees of the EOR. This means the EOR is responsible for their employment rights, payroll, taxes, and adherence to local labor laws. Your company directs their day-to-day activities and integrates them into your team as you would with any employee.
Utilizing an EOR can streamline the process of compensating an international cofounder, ensuring legal compliance and reducing the administrative burden on your startup. This approach lets you focus more on growing your business while maintaining global operational flexibility.
Just make sure that the EOR is compliant with the country of resident of your cofounder.