Cross-Border Payments & Compliance for Solo Developers

Selling software internationally as a one-person company is easier than ever—until money has to cross a border. Then you meet three-headed problems: getting paid, keeping the tax authorities happy, and not getting your account frozen. This guide covers the pragmatic path: what to set up, what to avoid, and where the real risks hide.

Pick a Payment Rail That Matches Your Customers

Most solo developers default to Stripe, and for good reason: it handles card processing, subscriptions, and 135+ currencies in one dashboard. But Stripe is not always the cheapest or most available option.

• Stripe / Paddle / Lemon Squeezy: Best for SaaS and digital products. Paddle and Lemon Squeezy act as merchant of record (MoR), meaning they handle sales tax and VAT collection on your behalf. For a solo developer, an MoR is often worth the ~5% fee because it removes a huge compliance burden.
• PayPal: Ubiquitous but expensive (4–5% + FX spread) and prone to holds on new accounts. Keep it as a fallback, not a primary rail.
• Wise Business / Payoneer: Great for receiving B2B invoices and paying contractors. Wise gives you local account details (IBAN, ACH, sort code) in multiple countries, which reduces friction for clients.
• Crypto / stablecoins: Only if your customers demand it. Treat it as a niche add-on, not a foundation.

Actionable tip: If you sell to consumers in the EU or UK, use an MoR. If you sell B2B to a handful of companies, invoice them directly via Wise or Stripe Invoicing and let them handle their own VAT reverse-charge.

Understand Where You Owe Tax

Cross-border tax is where solo developers get blindsided. Two concepts matter most:

1. VAT/GST on digital services. The EU, UK, Australia, and many others require you to charge VAT based on the customer's location, not yours. This is called the destination principle. The EU's OSS (One-Stop Shop) lets you file a single return for all EU sales once you exceed the €10,000 threshold. Below that, you can charge your local rate.

2. Income tax and permanent establishment. If you're a sole trader in Country A selling to customers in Country B, you generally owe income tax only in Country A—unless you create a permanent establishment (office, employee, dependent agent) in Country B. Remote software sales rarely trigger this, but don't set up a local entity or hire locally without advice.

Actionable tip: Use an MoR until you're doing meaningful volume (say, $100k+/year). Then talk to an accountant who specializes in cross-border digital businesses. A one-hour consultation costs less than a single penalty.

Banking, FX, and the Hidden Costs

Currency conversion is a silent tax on solo developers. If you earn in USD, EUR, and GBP but live in a country with a different currency, you can lose 2–4% per conversion through banks.

• Open a multi-currency business account (Wise, Revolut Business, or a local fintech). Hold balances in the currencies you earn and convert only when you need to.
• Watch FX spreads, not just headline fees. A "0% fee" transfer with a 2% spread is worse than a 0.5% fee with a tight spread.
• Keep separate accounts for business and personal. This simplifies bookkeeping and makes audits painless.

Actionable tip: Set a rule: never convert more than you need for the next 30 days of expenses. This reduces exposure to rate swings and keeps your accounting simple.

Compliance Hygiene for a One-Person Company

You don't need a compliance department, but you do need a paper trail. The basics:

• Invoices: Include your business name, address, tax ID, the customer's details, a sequential invoice number, and the VAT treatment (e.g., "reverse charge" or "VAT exempt"). Most invoicing tools (Stripe, Wise, Wave) handle this.
• Records: Keep contracts, invoices, and payment receipts for at least 5–7 years, depending on your jurisdiction.
• Sanctions and KYC: Payment processors will freeze accounts if a customer matches a sanctions list. Don't fight it—respond quickly with documentation. Avoid customers in sanctioned regions entirely.
• Data protection: If you collect customer data (you do), you're subject to GDPR or similar. A simple privacy policy and data minimization go a long way.

Actionable tip: Write a one-page "compliance runbook" for yourself: what to do if a payment is disputed, if a processor asks for KYC documents, or if a customer requests a VAT invoice. Future-you will thank present-you.

Next Steps

1. Audit your current setup: List every payment rail, currency, and country you touch. Identify the biggest FX leak.
2. Choose an MoR or direct invoicing based on your customer mix, and migrate if the fees or compliance burden justify it.
3. Open a multi-currency account and stop converting unnecessarily.
4. Book a one-hour call with a cross-border accountant to confirm your VAT and income tax obligations.
5. Write your compliance runbook and store it where you'll find it during a crisis.

Cross-border payments aren't glamorous, but getting them right is one of the highest-leverage things a solo developer can do. Keep it simple, keep records, and let the processors handle what they're good at.