I’ve been building my company across borders since 2010 and have encountered a persistent challenge when hiring high-income earners in emerging markets like India. It has nothing to do with talent or capability—some of the smartest, hardest-working people I’ve worked with are in these markets. But there’s a recurring friction point that I feel compelled to talk about openly: the cultural dissonance around taxation and what it means for employment relationships.
In developed economies like the United States, most of us grow up with the expectation that taxes are a fact of life. We may not enjoy paying them, but we recognize them as part of the social contract. As entrepreneurs, we might optimize here and there, but within boundaries. There’s an acceptance that income tax, payroll tax, compliance, and benefits are baked into what it means to be employed or to employ someone.
But in some countries, especially where a large part of the economy has historically operated informally or in cash, tax culture is still maturing. When individuals in these economies begin to earn at global rates—$60K, $80K, $100K+ per year—suddenly they find themselves confronting tax burdens they’ve never had to face before. And too often, the instinct is not to comply—but to avoid.
I’ve seen this play out more times than I can count and always with high earners. They set up private entities or consulting firms, ask to be paid as contractors, resist any shift toward formal employment, yet demand the benefits of full time employment. Not because they’re committed freelancers—but because the contractor status allows them to manage, minimize, or completely evade taxes. When you try to convert them to full-time employees to offer benefits, the discussion often breaks down entirely. The resistance isn’t about the role or the work—it’s about taxes.
What’s more surprising (and frankly frustrating) is that they almost always ask the employer to “cover” their tax losses if they consider changing their status—as if tax were a negotiable deduction that can be passed off to someone else. It’s a fundamentally different mindset, one rooted in a culture where formal taxation is alien and outright tax fraud is an option.
From an American perspective, this causes complications. Contracting relationships carry different legal, financial, and cultural expectations. We associate full-time employment with responsibility, accountability, and long-term commitment. Contractors are a different class of worker—usually specialized, autonomous, and self-managing. But when someone functions like an employee but insists on being paid as a contractor for tax avoidance reasons, it puts the business in an awkward and often risky position. Then when we are expected to provide the benefits of both to workers, it can come off as unfair.
Let me be clear: this is not about criticizing individuals, but recognizing a systemic challenge that employers need to understand. In many of these cases, the individuals are simply doing what they’ve seen others do. The problem is, when these norms go unexamined, they create mistrust, reduce the potential for long-term collaboration, and introduce unnecessary complexity for companies that want to operate transparently and globally.
As businesses continue to go global and remote work breaks down borders, this kind of tax culture clash will become more common. It’s time we talked about it—openly, respectfully, and constructively. Because if we don’t, we’re left with unsustainable arrangements and strained relationships between global employers and high-potential talent in emerging economies.
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