How to organize the work of a team in Russia with customers in the EU?

Question

Law in IT

There is a customer in the EU (Germany), a team leader in the same place, and developers in Russia. What is the best way to organize this work legally?
For example, you can create a GmbH in Germany (similar to an LLC), and an LLC in Russia. The customer pays the German company, the company concludes an agreement with the LLC, sends the money. LLC pays salaries to programmers.
What can be pitfalls? Maybe there are better options?
Thanks for the info!

Answer 1

schematically, yes, so
add VAT, employees in Germany, pricing, etc. to the figures.
for small turnovers Pioneers will roll with personal income tax / simplified tax system (slippery)
in the scheme they usually change the country to another in the EU or Offshore, customers do not like offshores, the Germans
also do not like any “other country”: the Baltic states are very negative, Cyprus is semi-negative

Answer 2

you can create a GmbH in Germany (similar to an LLC), and an LLC in Russia. The customer pays the German company, the company enters into an agreement with the LLC, sends the money. LLC pays salaries to programmers.

Normal scheme. Absolutely legal, if you drive normally. Choose a taxation system for an LLC, comply with currency laws, register programmers and pay salaries, pay taxes, and file reports. And there shouldn't be any problems
In terms of taxes and reporting, it is comparable to registration under an employment contract. The fundamental difference is that there are no guarantees for the TC - vacation, sick leave. Employees are motivated and not for such registrations)
If the contract is between a GmbH in Germany and an LLC in Russia, and developers in the Russian Federation, then GmbH will not have a relationship with employees.
But you can conclude contracts directly with programmers in the Russian Federation, they themselves will pay personal income tax and submit a declaration. Individuals can register. This is also legal and legal.