Building a remote-first business: Legal and financial essentials for 2025

The traditional office is dead. Well, not entirely, but the rules have undergone significant changes. Remote-first means that all employees are not required to come to a centralized physical office, and this approach is reshaping how businesses operate worldwide.

If you're thinking about starting a remote-first business in 2025, you're not alone. Thousands of entrepreneurs are ditching expensive office leases and building companies that exist entirely in the digital space. However, here's the catch – going remote doesn't mean disregarding legal and financial requirements.

Let's walk through everything you need to know to build a legally sound and financially innovative remote-first business.

What makes a business truly remote-first?

Remote-first goes beyond allowing people to work from home occasionally; it enables them to work from anywhere. It's a complete business philosophy where remote work becomes the default, not the exception.

Remote-first characteristics:

• No central office requirement for any employee
• Digital-first processes and communication
• Distributed team across multiple locations
• Technology-driven collaboration tools
• Flexible work schedules and time zones

Remote-friendly vs remote-first: Remote-friendly companies have offices but allow remote work. Remote-first companies build everything around distributed teams from day one.

Think of companies like GitLab, Buffer, or Zapier. They've never required employees to work from a specific location. Every process, meeting, and decision happens digitally by design.

Legal foundations you can't ignore

Starting a business remotely doesn't mean skipping legal requirements. You still need to register your company, file taxes, and ensure compliance with relevant regulations. Here's what you must get right:

Choose your business structure wisely.

Limited Liability Company (LLC): The most popular choice for remote startups. Protects personal assets and offers flexibility in management and taxation. You can form an LLC in any state, regardless of where you live or work.

Corporation (C-Corp or S-Corp): Better for businesses planning to raise venture capital or go public. More complex tax requirements, but a more transparent structure for investors.

Partnership Works for multi-founder businesses but offers less protection than LLCs or corporations.

Sole proprietorship: Simplest structure, but provides no liability protection. It is only suitable for tiny, low-risk businesses.

Register in the right state.

You don't need to register where you live. Delaware, Wyoming, and Nevada offer business-friendly laws, low fees, and strong legal protections. Many remote-first companies choose these states even if the founders live elsewhere.

Delaware advantages:

• Well-established business court system
• Investor-friendly laws
• Privacy protections for owners
• No sales tax on intangible property

Handle business licensing properly.

Business licensing requirements must be met when starting an online, home-based business, as well as when working remotely in some instances. Requirements vary by:

• Business type and industry
• States where you operate
• Local city and county rules

Common licenses needed:

• General business license
• Professional licenses (if applicable)
• Sales tax permits (for product sales)
• Employer identification number (EIN)

Research requirements in every state where you have remote employees. Some states require a business registration if you have even one employee working there.

Employment law in the remote world

Managing remote employees across different states creates complex legal obligations. You must follow employment laws wherever your workers live, not just where your business is registered.

Multi-state employment challenges

Wage and hour compliance: Each state has its own unique minimum wage laws, overtime rules, and break requirements. A remote employee in California follows California labour laws, even if your business is registered in Delaware.

Workers' compensation insurance: You typically need coverage in every state where you have employees. Some states offer reciprocal agreements, but most require separate policies.

Unemployment insurance: You must pay unemployment taxes in each state where employees work. This means separate registrations and quarterly filings for each state.

Creating bulletproof employment agreements

Remote work contracts need extra protections:

Work location specifications: Define approved work locations and require approval for changes. This helps control which state laws apply.

Equipment and security requirements: Specify who provides computers, internet, and security software. Include data protection and confidentiality clauses.

Communication expectations: Set clear guidelines for availability, response times, and meeting participation across time zones.

Performance monitoring: Establish measurable goals and check-in processes since you can't observe work directly.

Time tracking and wage compliance

One way to address this concern is by allowing employees to self-report their daily time worked, starting from the time they begin and end work, while excluding any non-working time.

Best practices for time tracking:

• Use reliable time-tracking software
• Require detailed activity logs
• Set clear boundaries between work and personal time
• Document break times and meal periods
• Regular audits to ensure accuracy

Financial management for distributed teams

Running a remote-first business requires different financial strategies than traditional companies. You're dealing with multiple currencies, international payments, and distributed expense management.

Banking solutions for remote businesses

Brex reimagines business banking for the digital age by combining corporate treasury management, spend controls, and automation into a single, unified platform.

Digital-first banking features to prioritize:

• Mobile-first account management
• Automated expense categorization
• Multi-currency support
• Integration with accounting software
• Virtual cards for remote employees
• Real-time spending controls

Traditional banks vs. fintech solutions: Traditional banks often require in-person visits and have limited digital capabilities. Digital-only banks operate entirely online without physical branches, making them perfect for remote-first businesses.

Expense management across borders

Remote employees incur different expenses than office workers:

Home office setups: Budget $1,000-$ 3,000 per employee for desk, chair, monitor, and other necessary equipment.

Internet and phone stipends: Many companies provide a monthly allowance of $50-100 for home internet and phone service.

Co-working space memberships. Some remote workers prefer co-working spaces. Budget $100-300 monthly per employee who uses them.

Plan travel and team retreats, as well as annual or quarterly in-person meetings. Budget $2,000-5,000 per employee for travel and accommodation.

Tax implications you must understand

Remote-first businesses often face complex tax situations, particularly when employees are based in multiple states or countries.

State tax nexus issues

Having remote employees creates a "nexus" – a tax connection to the state where they are located. This can trigger:

• State income tax filing requirements
• Sales tax obligations
• Business registration requirements
• Annual report filings

Nexus thresholds vary by state:

• Some require nexus with just one employee
• Others have minimum revenue or activity thresholds
• A few states have no corporate income tax

International tax complications

Hiring employees or contractors internationally adds another layer of complexity:

Permanent establishment rules: Having employees in other countries may create tax obligations in those countries.

Transfer pricing requirements: International transactions between related entities need proper documentation.

Withholding tax obligations: You might need to withhold taxes on payments to international contractors.

Working with tax professionals

Remote-first businesses need specialized tax help:

• Multi-state tax specialists
• International tax advisors
• Payroll tax experts
• State nexus consultants

Don't try to handle complex tax situations alone. The cost of professional help is far less than the penalties for getting it wrong.

Technology infrastructure essentials

Your technology stack becomes your office infrastructure in a remote-first business.

Security and compliance requirements

Data protection measures:

• VPN access for all employees
• Multi-factor authentication on all accounts
• Encrypted file sharing and storage
• Regular security training and updates
• Incident response procedures

Industry-specific compliance:

• HIPAA for healthcare-related businesses
• SOX compliance for public companies
• GDPR for businesses serving EU customers
• PCI DSS for payment processing

Communication and collaboration tools

Essential software categories:

• Video conferencing (Zoom, Microsoft Teams)
• Project management (Asana, Monday.com)
• File sharing (Google Drive, Dropbox)
• Communication (Slack, Microsoft Teams)
• Time tracking (Toggl, Harvest)
• Accounting (QuickBooks, Xero)

Budget 10-15% of revenue for technology tools and subscriptions.

Building financial controls and processes

Without physical oversight, you need stronger financial controls:

Expense approval workflows

Multi-level approval processes:

• Employees submit expenses through dedicated software
• Managers review and approve within spending limits
• The finance team handles the final processing and payments
• Automated flagging of unusual or significant expenses

Cash flow management

Remote businesses often have irregular income and distributed expenses:

Forecasting challenges:

• Multiple currencies and exchange rates
• Varying payment terms across regions
• Seasonal fluctuations in remote work productivity
• Currency hedging for international operations

To help them in their cash flow management, neo-banks prove to be very useful.

Financial reporting for investors

Remote-first businesses need robust reporting:

Key metrics to track:

• Revenue per employee (often higher for remote companies)
• Employee satisfaction and retention rates
• Technology costs as a percentage of revenue
• Geographic distribution of revenue and costs

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Scaling considerations for growth

As your remote-first business grows, complexity increases exponentially:

Hiring across jurisdictions

Employer of record services: Companies like Deel, Remote, and Globalization Partners handle employment compliance in countries where you don't have entities.

International expansion timeline:

• Start with contractors in new countries
• Use employer of record services for early employees
• Establish local entities once you have 5-10 employees in a country

Building distributed teams effectively

Cultural considerations:

• Time zone overlap for core collaboration hours
• Cultural sensitivity training for global teams
• Local holidays and customs respected
• Language barriers and communication styles

The remote-first business model offers numerous advantages, including access to global talent, lower overhead costs, and maximum flexibility. However, success requires careful attention to legal compliance and financial management from the outset.

Start with solid legal foundations, implement robust financial controls, and invest in the right technology infrastructure. The complexity might seem overwhelming, but thousands of businesses prove it's not only possible but profitable.

Platforms like Winvesta can help remote-first businesses manage international payments, currency conversions, and global financial operations seamlessly. Your distributed team can focus on building great products while you handle the financial complexity with the right tools and expertise.

The future belongs to businesses that master remote-first operations. Get the legal and financial foundations right, and you'll build a company that's not just surviving in 2025 – it's thriving in the new world of work.

Frequently asked questions about building a remote-first business?

1) What remote business should I start?

Popular remote businesses for 2025 include freelancing (writing, design, development), virtual assistant services, online coaching, e-commerce, content creation, and digital marketing agencies. Choose a business that matches your skills and interests for the best chance of success.

2) What is a remote first business?

A remote-first business is one where remote work is the default, not the exception. Employees can work from anywhere, and all company processes, tools, and culture are designed to support and empower remote teams equally with any in-office staff.

3) How do I set up a remote business?

• Create a business plan

• Register your business and get a virtual address

• Set up the right tech/tools for remote work

• Hire and onboard remote staff

• Establish clear communication and remote work policies

• Promote your business online

4) How to build and scale a successful remote first company?

• Build a strong remote culture and clear communication

• Invest in the right collaboration tools

• Focus on results, not hours

• Hire and retain top global talent

• Automate processes and regularly review workflows

• Foster trust, accountability, and team connection.

Disclaimer: This blog is for informational purposes only and does not constitute financial, legal, or tax advice.