> I once worked at a tiny company, and their first 'contractor' employee didn't realise he had to set aside money for certain taxes

It's a valid concern. Should be easy to solve though: add a reminder to the employee handbook, and also remind them to check out local tax codes and set aside money.

> Some countries have problems with sham contractor arrangements

This usually doesn't apply to cross-border relationships though (which we implicitly focus on here I think, given this is a thread about moving to Japan). It is possible in theory, of course, for tax authorities to go after international contractors clayming they are international employees, but I haven't heard about such cases yet.

But there's an easy way to distinguish employment and contractor relationships: if you set a specific goal and a deadline, and do not tell them how to do the job, you have a contractor. (The goal does have to be specific, though, but you can say in your contract that you will use Jira tickets for that, I believe.)

I think that overlaps pretty well with most remote work. Specifics might differ, but as a general rule this is it what tax authorities pretty much everywhere will look for.

Disclaimer: I'm not a lawyer nor a tax advisor, just doing a lot of freelance and run an Estonian LLC for fun