Expanding to an international market brings new and exciting opportunities. The most obvious, of course, is access to new customers that come with a new market. But that is not the limit of the benefits for international expansion; businesses may also grow their capacity to understand how customers work differently, and can glean innovative ideas from local employees. International expansion also comes with working through a new regulatory environment. Because compliance can be tricky, most businesses that are looking to expand overseas could use international entity support from experts in that country.
International Entity Support and Local Labor Laws
Local labor laws are often pretty complicated. The world over, these laws tend to be labyrinthine, and it is easy to get lost while attempting to navigate their twists and turns; it can be difficult to keep track of just one set of labor laws without having to worry about even two countries. As a business continues to expand into new markets, it will need to keep track of several countries at once.
International entity support can help guide businesses through the diverse labor codes in every country in which it has employees. And good consultants will have experts in the legal codes for each country.
How to Protect Your Intellectual Property
Intellectual property is probably worth more to businesses than any actual property they own. Not every country has the same protections as the United States, and it can be complicated to keep track of how each country designs their IP protection systems. It gets especially complicated when businesses start to use contractors instead of employees. Many countries automatically assign copyright protections to the contractor, so they can use the employer’s intellectual property in their businesses.
Confidentiality agreements need to be appropriately vetted, too. If added to standard confidentiality language of a contract, businesses might not be protected. Instead, they need to make sure that every confidentiality agreement is appropriate for each jurisdiction so they can be enforced if needed.
Establishing an International Entity
One important aspect of global expansion is the need to establish a legal entity in the country in which a business is expanding. To hire employees, businesses need to have a taxable corporation or legal entity in the country. That’s the only way to report correct taxes, withhold employee taxes, and pay into the right social security funds to make sure you are compliant.
Establishing a legal entity can be difficult. Not only does it cost a lot of money, but it also takes a lot of time — typically five to six months once a bank account is setup.
That’s where our International PEO (Professional Employer Organization) can help you out. We are already experts in local compliance and can handle employee contracts, labor law, and other issues. By utilizing International PEO, you can begin operating in your target country while we assist you with setting up an entity should you choose to do so. We use our already established infrastructure and legal entity to get you started in-country, acting as your employer of record. With such a small investment, it can be much easier to try a test run in a new market without committing too many resources. Contact Velocity Global today to learn more.