July 31, 2015 at 14:00How and why SOLAR STAFF was created
As we promised in the previous post, we talk in more detail about our service and how it was created.
Let's start from afar. Once upon a time there was a boutique law firm Seneschal International, long and fruitfully engaged in legal support for Internet businesses. Internet projects came across different, and each project had its own problem points, sometimes similar, sometimes completely different. But the most painful question for all projects was one: how to legally and regularly pay a large number of individuals - webmasters, freelancers, speakers - for their work and services?
We began to think how to be. Naturally, “black” schemes were not considered, since the task was to get rid of them; but it turned out that legal options are not so simple. I had to abandon the idea of concluding contract agreements almost immediately — why, exactly, we talked about in a previous publication . In short: documentation and reporting plus the tax burden on social contributions were beyond the margin of services, and withholding personal income tax led to non-competitiveness.
As an experiment, we suggested that one advertising partner network (Mixmarket) try to make their webmasters individual entrepreneurs. We started writing manuals: how to register as an individual entrepreneur, how much it is more profitable in taxes, and the guys from Mixmarket, as part of the loyalty program, made a system of compensation for registration costs - but this did not help. Then we created an “autofill” of registration forms, wrote instructions for filling out and submitting reports (“My business” wasn’t there yet), found a lot of companies in the regions that help register IPs, found offices for accounting support, agreed with everyone about significant discounts . But here the result was not very joyful, because IPs became just a little more than 6% of webmasters.
Having recorded this experiment as one of the “non-working” options, we conducted surveys among the services and realized that more than 10% of the total number of webmasters couldn’t be recruited into IP by anyone. Accordingly, we decided not to return to this method.
Then we began to study how Yandex lives with its affiliate network - at that time, using one of the Russian companies of the group as a DSP. But I also had to abandon the idea of the CPCs at the stage of the theoretical model, because, apart from spawning “dumps”, such a scheme of work could not lead to anything good (and legal).
Then we decided to study the experience of Google. Since Google is not a Russian company at all, it pays its webmasters not from the Russian Federation. For this reason, such a company cannot be a tax agent of such individuals (according to the Tax Code of the Russian Federation), does not charge social contributions and does not withhold personal income tax, shifting the burden of paying tax to the webmasters themselves. Having studied the working scheme of Google, we invited our “wards” Russian projects to enter the international market, while dividing their services into the Russian part, which has no business with individuals, and the foreign part, which will work with such individuals. For these purposes, we have found jurisdictions in which our Russian Internet business lives comfortably.
Again - no “black” options! We organized access to international markets for our clients in full compliance with all requirements of applicable laws: with the opening of offices in places of presence, the hiring and / or relocation of part of the IT infrastructure, personnel, the localization of products, and the transfer of required business processes. So we “saved” just over ten of the largest Russian Internet projects. But even this option was not a panacea - although such a division of business closed the issue of payments to individuals, and companies no longer frightened Russian and foreign investors with “strange” expense items, but the requirements for the very possibility of such a restructuring were and remain, as they say, far from for all.
Having understood that we were tired of ordering each time to restructure another project from scratch and re-go through all these “circles of hell”, we came to the only right conclusion - to serve the interests of a wide variety of Internet projects, both Russian and foreign, we need a single online a service designed with a conscious approach to the problem. This is how SOLAR STAFF appeared - a service that allows our contractors to work with individuals according to the customer-general contractor model (SOLAR STAFF service) - subcontractor (individual webmaster or freelancer), which in turn gives companies the opportunity to work with individuals without unnecessary workflow and taxes, while not wasting time and money to truly become an international business.
But what exactly had to be done in order for SOLAR STAFF to work, we will tell in the next post.
Let's start from afar. Once upon a time there was a boutique law firm Seneschal International, long and fruitfully engaged in legal support for Internet businesses. Internet projects came across different, and each project had its own problem points, sometimes similar, sometimes completely different. But the most painful question for all projects was one: how to legally and regularly pay a large number of individuals - webmasters, freelancers, speakers - for their work and services?
We began to think how to be. Naturally, “black” schemes were not considered, since the task was to get rid of them; but it turned out that legal options are not so simple. I had to abandon the idea of concluding contract agreements almost immediately — why, exactly, we talked about in a previous publication . In short: documentation and reporting plus the tax burden on social contributions were beyond the margin of services, and withholding personal income tax led to non-competitiveness.
As an experiment, we suggested that one advertising partner network (Mixmarket) try to make their webmasters individual entrepreneurs. We started writing manuals: how to register as an individual entrepreneur, how much it is more profitable in taxes, and the guys from Mixmarket, as part of the loyalty program, made a system of compensation for registration costs - but this did not help. Then we created an “autofill” of registration forms, wrote instructions for filling out and submitting reports (“My business” wasn’t there yet), found a lot of companies in the regions that help register IPs, found offices for accounting support, agreed with everyone about significant discounts . But here the result was not very joyful, because IPs became just a little more than 6% of webmasters.
Having recorded this experiment as one of the “non-working” options, we conducted surveys among the services and realized that more than 10% of the total number of webmasters couldn’t be recruited into IP by anyone. Accordingly, we decided not to return to this method.
Then we began to study how Yandex lives with its affiliate network - at that time, using one of the Russian companies of the group as a DSP. But I also had to abandon the idea of the CPCs at the stage of the theoretical model, because, apart from spawning “dumps”, such a scheme of work could not lead to anything good (and legal).
Then we decided to study the experience of Google. Since Google is not a Russian company at all, it pays its webmasters not from the Russian Federation. For this reason, such a company cannot be a tax agent of such individuals (according to the Tax Code of the Russian Federation), does not charge social contributions and does not withhold personal income tax, shifting the burden of paying tax to the webmasters themselves. Having studied the working scheme of Google, we invited our “wards” Russian projects to enter the international market, while dividing their services into the Russian part, which has no business with individuals, and the foreign part, which will work with such individuals. For these purposes, we have found jurisdictions in which our Russian Internet business lives comfortably.
Again - no “black” options! We organized access to international markets for our clients in full compliance with all requirements of applicable laws: with the opening of offices in places of presence, the hiring and / or relocation of part of the IT infrastructure, personnel, the localization of products, and the transfer of required business processes. So we “saved” just over ten of the largest Russian Internet projects. But even this option was not a panacea - although such a division of business closed the issue of payments to individuals, and companies no longer frightened Russian and foreign investors with “strange” expense items, but the requirements for the very possibility of such a restructuring were and remain, as they say, far from for all.
Having understood that we were tired of ordering each time to restructure another project from scratch and re-go through all these “circles of hell”, we came to the only right conclusion - to serve the interests of a wide variety of Internet projects, both Russian and foreign, we need a single online a service designed with a conscious approach to the problem. This is how SOLAR STAFF appeared - a service that allows our contractors to work with individuals according to the customer-general contractor model (SOLAR STAFF service) - subcontractor (individual webmaster or freelancer), which in turn gives companies the opportunity to work with individuals without unnecessary workflow and taxes, while not wasting time and money to truly become an international business.
But what exactly had to be done in order for SOLAR STAFF to work, we will tell in the next post.