As businesses grow, especially in remote-first and global setups, working with multiple freelancers becomes the norm rather than the exception. Product teams hire developers across countries, marketing teams work with designers and writers worldwide, and startups often rely on freelance specialists to scale quickly.
While hiring freelancers is relatively easy today, paying them efficiently and compliantly is not. Managing separate contracts, invoices, tax rules, currencies, and payment schedules can quickly turn into an administrative burden.
This is where the idea to pay multiple freelancers through one consolidated invoice becomes attractive- and where the Merchant of Record (MoR) model plays a key role.
In this blog, we explain:
The focus is on businesses and teams operating in Europe or working with European freelancers.
When a business works with several freelancers, payments usually involve:
For example, a company may work with:
Each freelancer sends their own invoice, often with different formats, VAT rules, and payment terms. The finance team must review, approve, and process each one individually.
This setup creates problems such as:
A single-invoice model means the business receives one invoice covering all freelancer costs, instead of managing multiple invoices. Businesses prefer this model because it:
However, freelancers are independent contractors, not employees. You cannot simply merge their invoices into one unless there is a legal and financial structure that supports it.
That structure is the Merchant of Record model.
In practice, this does not mean freelancers stop invoicing entirely. Instead, it means:
From the business’s perspective, there is only one vendor, one contract, and one invoice.
That vendor is the Merchant of Record.
A Merchant of Record is a legal entity that becomes responsible for selling services to the end customer.
In the context of paying freelancers, the MoR:
The client pays the MoR, not the individual freelancers.
Let’s break this down step by step.
Multiple freelancers deliver services for a client project. They may be based in different countries and work under separate agreements.
The MoR aggregates all freelancer services into a single commercial offering.
From a legal perspective, the MoR is now the seller of those services.
The MoR issues one VAT-compliant invoice to the client covering:
The client only needs to process one invoice.
The client pays the MoR using a single payment method, currency, and transaction.
The MoR distributes payments to freelancers based on:
The client does not need to manage freelancer payouts directly.
Result: High admin workload and higher risk of errors.
Result: Cleaner accounting and faster payments.
VAT handling becomes simpler for the client when using a Merchant of Record.
The MoR:
The client does not need to analyse each freelancer’s tax status.
No. A payment gateway only processes transactions.
A Merchant of Record:
This legal responsibility is what makes the single-invoice model possible.
This model is especially useful for:
It is less relevant for very small teams working with one or two local freelancers.
Remotify operates as a Merchant of Record for businesses working with freelancers.
By acting as the MoR, Remotify:
This allows businesses to focus on delivery and growth rather than payment operations.
Paying multiple freelancers does not have to mean managing multiple invoices, tax rules, and payment processes.
By using a Merchant of Record model, businesses can consolidate payments into a single invoice while staying compliant across borders. This approach is particularly valuable in Europe, where VAT and regulatory requirements vary by country.
For companies scaling remote teams, a Merchant of Record like Remotify offers a practical way to simplify operations without sacrificing compliance.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice.
While hiring freelancers is relatively easy today, paying them efficiently and compliantly is not. Managing separate contracts, invoices, tax rules, currencies, and payment schedules can quickly turn into an administrative burden.
This is where the idea to pay multiple freelancers through one consolidated invoice becomes attractive- and where the Merchant of Record (MoR) model plays a key role.
In this blog, we explain:
The focus is on businesses and teams operating in Europe or working with European freelancers.
When a business works with several freelancers, payments usually involve:
For example, a company may work with:
Each freelancer sends their own invoice, often with different formats, VAT rules, and payment terms. The finance team must review, approve, and process each one individually.
This setup creates problems such as:
A single-invoice model means the business receives one invoice covering all freelancer costs, instead of managing multiple invoices. Businesses prefer this model because it:
However, freelancers are independent contractors, not employees. You cannot simply merge their invoices into one unless there is a legal and financial structure that supports it.
That structure is the Merchant of Record model.
In practice, this does not mean freelancers stop invoicing entirely. Instead, it means:
From the business’s perspective, there is only one vendor, one contract, and one invoice.
That vendor is the Merchant of Record.
A Merchant of Record is a legal entity that becomes responsible for selling services to the end customer.
In the context of paying freelancers, the MoR:
The client pays the MoR, not the individual freelancers.
Let’s break this down step by step.
Multiple freelancers deliver services for a client project. They may be based in different countries and work under separate agreements.
The MoR aggregates all freelancer services into a single commercial offering.
From a legal perspective, the MoR is now the seller of those services.
The MoR issues one VAT-compliant invoice to the client covering:
The client only needs to process one invoice.
The client pays the MoR using a single payment method, currency, and transaction.
The MoR distributes payments to freelancers based on:
The client does not need to manage freelancer payouts directly.
Result: High admin workload and higher risk of errors.
Result: Cleaner accounting and faster payments.
VAT handling becomes simpler for the client when using a Merchant of Record.
The MoR:
The client does not need to analyse each freelancer’s tax status.
No. A payment gateway only processes transactions.
A Merchant of Record:
This legal responsibility is what makes the single-invoice model possible.
This model is especially useful for:
It is less relevant for very small teams working with one or two local freelancers.
Remotify operates as a Merchant of Record for businesses working with freelancers.
By acting as the MoR, Remotify:
This allows businesses to focus on delivery and growth rather than payment operations.
Paying multiple freelancers does not have to mean managing multiple invoices, tax rules, and payment processes.
By using a Merchant of Record model, businesses can consolidate payments into a single invoice while staying compliant across borders. This approach is particularly valuable in Europe, where VAT and regulatory requirements vary by country.
For companies scaling remote teams, a Merchant of Record like Remotify offers a practical way to simplify operations without sacrificing compliance.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice.
