Hiring Considerations by CountryCurrency selectionEmployer of RecordIndicative offer lettersOption GrantsImmigrationH-1BO-1Country Specific Hiring Considerations
OCV supports a fully remote workforce, but many jurisdictions outside the USA have restrictions that do not align with the needs of an early stage startup workforce. With flexibility and speed in mind, OCV recommends prioritizing hiring workers in the United States classified as employees and workers outside the United States to be engaged as contractors through a third party firm.
Hiring employees in the United States can offer several benefits for businesses. Some of these benefits include:
- Flexibility in hiring laws for ramping up and down a team (short notice periods etc).
- Culture for startups, Entrepreneurship and Innovation: The entrepreneurial spirit and culture of innovation in the U.S. can foster a dynamic business environment that encourages creativity and risk-taking.
- Strong infrastructure: reliable internet, easy to ship computers, teams can meet easily for occasional face to face get togethers (no need for Visas or international travel)
- Intellectual Property Protection: U.S. laws offer strong protections for intellectual property, which is critical for companies relying on patents, trademarks, and copyrights.
- English as a Business Language: English is widely spoken and used as a business language, making it easier for international companies to operate in the U.S.
- Tax Benefits: Depending on the state and industry, there may be various tax incentives and benefits available to businesses operating in the U.S.
- Employee Equity: This is a standard practice for employee incentives and retention in the U.S. Outside of the U.S. the implementation and administration is complex and expensive.
Exceptions are made for critical hires outside the USA. We expect no more than 2 key employees outside the USA to be hired. A critical hire is someone who has extensive experience with your open source project and can make significant contributions to your company success.
In general, we recommend portfolio companies pay employees and contractors in their local currency to avoid situations of adverse exchange rate fluctuations for the employees. Exchange rate management is not a core activity to scaling the business and will create an unnecessary distraction for the management team down the road.
An Employer of Record (EOR) is a third-party company that is responsible for administrative tasks related to employing a worker such as payroll and tax compliance. The EOR is considered the legal employer of the worker while the worker is under the direction and supervision of the client or hiring company. The EOR provides services such as human resources, payroll, and benefits administration services to other companies.
Open Core Ventures companies which support a global workforce where the company may not have a legal entity leverage an EOR in helping manage local employment laws and regulations.
OCV presents employment candidates with indicative offer letters prior to an employment contract to demonstrate intent to hire an employee. OCV companies utilize an employer of record (EOR) firm to generate the official employment contract.
Indicative offer letters generalize and outline intended terms while local employment contracts are dictated by local law and include relevant local employment statutes. Indicative offer letters provide written documentation to move forward with providing notice to current employers and signify an intent to move forward with an opportunity but are not directly binding until an employment contract is signed.
In some countries (e.g. Netherlands, France, and Belgium) collective bargaining agreements provide industry-wide terms and conditions that will apply on top of employment contracts which will cover items such as the notice period required from employer to employee in the event of termination. When employing executives or senior leaders, local legal teams can inform employment contracts beyond the guidance offered by the EOR.
Template documents reviewed periodically by local legal teams may be used for preparing option agreements for a company’s personnel. For executive hires, it may be necessary to consult directly with local legal teams themselves.
See additional details on option grant processes at Option grant process and capitalization table management.
Because of the difficulties in ensuring sponsorship and renewal can be expensive and time consuming, OCV companies absolutely cannot support visa sponsorship or transfers for team members. We would look into supporting executive relocation (CEO or CTO) only.
H-1B visas are temporary US employment visas for a period of three years which have the option to renew after another three years. After 6 years (initial 3 years and a 3 year renewal), if employees don’t have a green card which would provide permanent resident status (renewed every 10 years), they would have to leave the United States.
O-1 visas are for individuals who possesses extraordinary ability in the sciences, arts, education, business, or athletics, etc. See specific details from the US Citizenship and Immigration Services (USCIS) here.
O-1 visas can be transferred, and the transfer process may be easier if the beneficiary (i.e. founder) has a copy of the complete O-1 filing. It is favorable if the beneficiary has already been approved for an O-1 visa. The new O-1 filing will be separately assessed by USCIS.
O-1 visa transfer process for founders:
- A US legal entity must be established first (this is the US petitioning entity) before an employment-based petition can be filed with USCIS.
- [To be confirmed with legal team]: founders can still purchase common shares during the company formation process.
- There are no issues if the founder is paid through a PEO if the PEO only functions to manage compensation. The employee must have an employer-employee relationship with the US petitioning entity.
- Timing: typically 6-8 weeks (could be longer), depends on how long it takes to gather the initial information. O-1 is one of the most intensive filings, so if the beneficiary has a copy of the prior petition, this can be leveraged and shorten the new O-1 filing preparation process.
- Estimated Cost: $15,000 to $18,000