We are a SaaS startup based in EU trying to set up an affiliate program. Since we sell globally, we want to accept affiliates globally as well.
After some investigations, we realized it's extremely complex to sort out tax & compliance due to local law, unlike how straightforward it is in the US. It was quite shocking as I'm sure many non-US startups that have a 'payout' flow(e.g. marketplace) will need to get around this.
What options do we have to make it possible?
Currently, we are looking into: 1. Open a US entity – not sure if accounting/lawyer costs can be justified.
2. Find a US intermediate to handle payout & contractor relationship – not sure whether such service even exists.
Any suggestions?
For example, you mention tax. An affiliate is a cost to you and in principle you account for that cost in the same way whether that affiliate is next door or on the other side of the world.
There's also potentially VAT. My understanding is that VAT treatment of services received from EU and non-EU service providers is the same. If so there should be no added complexity.
In any case, this is quite a technical topic and if you want to understand your position and your options you should really hire a professional knowledgeable in that very topic.