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Global Consulting – 3 Common Areas of Need

By September 16, 2016March 31st, 2023No Comments
Global Consulting – 3 Common Areas of Need

As the global leader in employer of record services, we get frequent requests from current and prospective clients regarding global consulting. There have been some common themes across the requests so we thought we would share an overview the most common areas of global consulting.

1. Independent Contractor Compliance Review

Most commonly, we receive inquiries from clients sounding something like this:

“We didn’t know how else to employ this person abroad, so we just made her an independent contractor. Is that ok?”

Sadly, it’s not as simple as a yes/no answer without a deeper dive. There are a variety of factors that come into play that are even more complex than the standard IRS test on Form SS-8 that so many US employers rely on.

  • For example, it is nearly impossible to employ independent contractors in certain markets like Brazil.
  • What kinds of intellectual property do this individual produce or have access to?
  • Does the individual perform similar services for other organizations? Or are you her primary source of income?
  • Does the individual have her own business license established?
  • How long as the relationship been in place?
  • What does your gut tell you?

Chances are, if it walks like a duck and talks like a duck, you know the rest. The risks and costs are just too great to chance an international employee misclassification. It’s not as simple as an IRS slap on the wrist either. Imagine the Chinese government demanding registration of a WOFE (Wholly Owned Foreign Enterprise) as well as fines, penalties, back taxes and a capital deposit requirement to become compliant because they think you should be a registered employer in the country. That’s not a pretty picture.

We’ve posted a variety of articles on this topic in the past considering how common the inquiry is and frankly how frequent we find companies, not in a compliant position. Velocity Global does offer global consulting around independent contractor compliance if you would ever like to chat.

2. Regional Recommendations

We also have clients come to us in the planning stages of global growth looking for regional direction and recommendations. A client will say something similar to:

“We believe Asia poses the next best opportunity for us, but we’re flexible with where we put boots on the ground. What do you recommend?”

You could replace “Asia” with any variety of regions and we can gladly consult. In fact, we just posted an analysis between Singapore and Hong Kong. Looking at the Nordics? We can share with you why a gift of company stock in Sweden is more complex and less valuable to an employee than you might think for a surprising reason. Or why employer contributions are so low in Denmark? Someone has to pay for their robust social system. Spoiler: It’s the employees. Or perhaps considering South America as an emerging market. As Brazil quickly falls into the ranks, South America still provides ample market opportunity that we can consult with you on internationally to navigate the market easier than you ever thought possible.

No matter the region you are considering, let’s discuss and make sure your global growth and hiring strategy are as tight as possible.

3. International Benefits Strategy

Last but not least, the approach to international benefits is such a frequent request for global consulting. In the age of the Affordable Care Act in the US, it’s no wonder that US employers looking to grow internationally have questions about benefits strategy outside US borders. Here’s the typical question:

“We offer robust health insurance and benefits to our US employees. Do we do the same for anyone we hire internationally? What do international benefits look like?”

In most instances of HR and employment, it is easiest to think of the US as the outlier. Many foreign markets have more robust statutory social insurances through employment than we have in the US. The question becomes is the level of care from the government-provided benefit sufficient for your employment goals in that specific market? It looks quite different between Colombia and Ireland, or between Australia and Kenya. Despite the fact that it is wildly different between markets, we will gladly have a discussion about your benefit goals globally, do they stack up, what can you do to retain your international resources and stay out of trouble?

If any of these three common global consulting topics resonate, shoot us a note. We would love to chat!