If you were working for them like a regular employee, that has quite a few pitfalls - you'd need to perform the duties that an employer has then (get a "Betriebsnummer" (employer registration number), register your contract etc) - working "on a freelance basis" where you actually act as an employee isn't legal (https://www.existenzgruender.de/SharedDocs/BMWi-Expertenforu...). And if compliance is important for a company, they'd need at least someone that is familiar with labor law in a country before they start employing people there, even if they don't explicitly need a business entity.

(Edited for clarity)

Sure, and it's a good point that I think companies should consider instead of downright rejecting this option.

There are implications though: - What about equity grants? A lot of comp in SV based companies is based on equity (both liquid/illiquid). If you are hiring someone on a pure cash basis vs other people who are not - what kind of dynamic / incentives that will create?

I'm very curios about hearing your experiences working in freelance capacity for a US based company though, it sounds like something I would like to do at some point (as of hiring someone), and would really appreciate the ideas

That was basically my experience, I wasn't given options only paid a normal salary ~25-30% higher to compensate me paying for my own health insurance, unemployment insurance, misc taxes etc.