Operating from Europe, selling to the US

This page is research, not legal advice. Re-verify every date, threshold and rate before it reaches a contract, filing or board paper.

#Entity: European parent, US Inc. on the paper

The common pattern is an EU or UK parent — Ltd, GmbH, BV, Dutch or Irish holdco — plus a US Inc., usually Delaware, as the contracting party for US customers. Four reasons it is close to mandatory [UNVERIFIED — practitioner reasoning]:

• Large US labs' procurement and legal teams prefer, and sometimes require, a US-law MSA with US venue and a US entity to sue.
• It removes the W-8BEN-E and treaty-withholding conversation from every invoice.
• It simplifies US state sales-tax registration if any output is a taxable data or information service — taxable in a meaningful minority of states [UNVERIFIED].
• It makes US bank rails, insurance placement and vendor-onboarding portals work at all.

The costs: transfer pricing between parent and US Inc. (a documented intercompany services agreement at a defensible margin), US federal and state filings, and a permanent-establishment analysis.

#Being vendor of record for a US lab

Vendor of record means you are the principal: you own the deliverable, the liability and the crowd relationship — which also means you book gross (GMV is not revenue) and your contract terms carry the exposure (Pricing and the contract). Three consequences.

Enterprise vendor onboarding. Security questionnaire, SOC 2 Type II under NDA, pen-test summary, DPA, sub-processor list, insurance certificates, W-9 or W-8BEN-E, sanctions attestations. Expect readiness plus audit in the tens of thousands for a first cycle; all-in programme costs are reported around $150k [WEAK — low-quality source; a ceiling anecdote].

A bar set by the buyer's own certifications. OpenAI's trust centre lists SOC 2 Type 2, ISO/IEC 27001, 27017, 27018, 27701 and 42001, PCI DSS v4.0.1, CSA STAR, GDPR, TX-RAMP and FedRAMP 20x, plus a supplier code of conduct and a documented supply-chain risk process (trust.openai.com). A buyer holding ISO 42001 and FedRAMP runs a formal risk assessment on anyone touching training data.

Flow-downs to mirror into contributor agreements. Confidentiality, IP assignment, data handling, and increasingly AI-specific terms — no LLM use on the task, no exfiltration to third-party models. The mismatch between what a US MSA flows down and what German or Indian contractor law lets you flow down is the recurring failure point (Where the supply can legally live).

#2 December 2026, and why it argues for non-EU supply

Directive (EU) 2024/2831 requires implementing law in force by 2 December 2026 (EUR-Lex). Four articles decide the geography question.

• Art. 2(1)(b) — the trigger is work "performed in the Union." A Berlin GmbH with a non-EU crowd is largely outside it; a Delaware Inc. with Polish annotators is inside it.
• Art. 5 — employment is legally presumed where facts indicating direction and control are found, and the platform must prove otherwise. Art. 5(6) applies this prospectively to contracts already running.
• Art. 3 — intermediaries do not firewall you: protection extends through them, "including, where appropriate, joint and several liability systems."
• Art. 7 — bans processing biometric data to establish identity by one-to-many comparison against a stored database, from the start of recruitment, plus emotional-state inference and collection while the person is not performing platform work.

That last one is the operational killer. The most effective anti-fraud control — periodic 1:N face re-verification against your enrolled gallery — is unlawful for EU-resident contributors, forcing a two-track stack: full biometrics outside the EU, document and behavioural checks inside it. Art. 13 also requires a platform with more than 250 workers in a Member State to pay for the workers' own expert. Full detail in The law is about to arrive.

#Payment rails and mass payouts

At crowd scale the binding cost is FX spread times payout frequency, not the per-payout fee.

Paying weekly rather than monthly multiplies fixed per-payout costs by about 4.3x [UNVERIFIED — arithmetic]. Fast payment is still a real recruiting weapon; it is bought twice, once in rails and once in the widened funding gap.

On tax: under VAT Directive Art. 44, B2B services are supplied where the customer is established, so a US business customer is outside the scope of EU VAT and you invoice without it. Under Art. 196 you reverse-charge on contributor invoices from taxable persons — nil net cash cost with full recovery, but a real filing obligation requiring each contributor's status to be documented. US sourcing follows place of performance: services performed wholly outside the US are foreign-source, so no 30% withholding, no 1042-S, no 1099 — collect W-8BEN anyway [WEAK — inference from the sourcing rule; confirm against Pub. 515].

#The net-60 gap

You pay the crowd weekly. The lab pays net-30 to net-60, sometimes net-90, from invoice acceptance.

The full arithmetic, and the reason growth funds the gap several times over, is in You pay weekly, they pay in sixty days. Fund it in this order: deposits and milestone billing; shorter terms bought with a discount (2/10 net 60 costs about 14.9% annualised); receivables financing — a lender looking at a book that is 91% two customers sees one obligor, and no factoring rate for this sector exists anywhere in the research; then equity, the most expensive lending facility ever constructed.

Do not fund it out of the crowd. Free on the day; a docket, a discovery process and a collapsed recruiting funnel eighteen months later. You pay weekly, they pay in sixty days has the full case, including the Handshake and Mercor records.

#Sanctions screening a global crowd

Strict-liability territory, and the threat is live. OFAC designated a DPRK IT-worker network in March 2026 [WEAK]; Christina Chapman was sentenced to 8.5 years in July 2025 for running a laptop farm hosting company-issued devices for North Korean remote workers [WEAK]; an eleven-nation advisory in August 2026 warned those workers now use real-time deepfakes to beat hiring checks [WEAK]. EU sanctions bind the European parent independently and differ from OFAC's lists — dual screening.

Minimum control set: screen every contributor at onboarding against OFAC SDN plus EU and UK lists, and re-screen on a schedule and on any list update; geo-block registration and payouts from embargoed jurisdictions; verify IP and device geography against declared residence and treat a mismatch as a hard block, not a flag; require payout instruments in the declared country of residence; keep the evidence, because that is what makes a voluntary self-disclosure survivable. See Who is actually on the other end.

#The buyer is in two metros

In the twelve months to June 2026, the Bay Area took 51.5% of every AI venture dollar and 53.2% of every B2B dollar; Bay Area plus New York is 67.5% of AI dollars and 72.2% of B2B (Carta via SaaStr).

If delivery has any on-site or secure-facility component, that concentration is good for delivery cost and bad for correlated risk — and it compounds whatever buyer concentration you already carry. From Europe it also means an eight-to-nine-hour offset to San Francisco: your ops day ends as the buyer's begins. Workable for asynchronous delivery, an active liability for anything needing same-day escalation — which is most first contracts. Budget someone in the time zone before you need them, not after the first missed escalation.