More than 200,000 not-for-profit organizations have been founded in the U.S. since 1970, each with a unique mission to help others. While some are focused on making a difference in the United States, others aim to impact lives on a global scale. Taking a non-profit into new countries requires thorough planning and innovative thinking to find success. For those that are ready to share their mission in new international markets, we have provided best practices and tips to help non-profits hiring overseas find success.
Overcoming the Challenges of Non-Profits Hiring Overseas
Hiring talent overseas is not a straight-forward task. Organizations need to invest time in researching local labor laws, customs, and cultural expectations in their target countries. Each country has its own employment requirements, and they can have a large effect on how non-profits approach their global growth. As non-profits begin hiring overseas, paying attention to different compliance requirements can make all the difference for a successful global expansion.
With the growing popularity of global mobility and non-conventional workspaces, now more than ever, companies need to remain flexible when vying for talent overseas. Non-profits notoriously have smaller budgets, meaning they need to be strategic in how they approach expansion and hiring overseas.
Organizations can balance budgetary restraints by offering mobility-friendly solutions. These include short-term international assignments, commuter-friendly policies, and other practices that give international employees more freedom with their work environment.
Given the growing competitive landscape for finding global talent, companies need to remain flexible in their expansion and come up with innovative ways to recruit team members.
Avoid a Permanent Establishment
Non-profits don’t always need to create a foreign subsidiary when expanding into new countries. In fact, when entering a new international market, it’s best to remain agile and test the market before making a full commitment. This ensures organizations avoid the risks involved with setting up a foreign subsidiary, which include:
- High cost for set-up
- Long lead times
- Costly and time-consuming teardown
- Maintaining compliance with ever-changing labor laws
An alternative option for non-profits hiring overseas is an Employer of Record solution, such as International PEO (Professional Employer Organization). International PEO is a lean hiring method that reduces costs associated with expansion by up to 60%, allowing non-profits to better utilize their limited budget. In addition to being a cost-friendly option, International PEO also helps organizations reduce hire time by up to 90%, and ensure their practices are compliant with local labor laws.
When entering new markets, organizations should consider forging valuable partnerships with in-country experts. Whether it’s forming a local board of directors or partnering with in-country companies, non-profits can gain a lot of traction by working the locals to build a reputation in new markets.
In addition to providing credibility within new markets, forming strategic partnerships can help organizations gain a better understanding of local culture and customs. Working with an International PEO gives companies access to its knowledge of local labor laws, best practices for hiring, and provides guidance for how to navigate new foreign markets.
Pay Attention to Tax Requirements
Non-profit organizations are not subject to traditional tax payments that for-profit organizations within the U.S. have to pay, but there are some exceptions. For example, if a non-profit organization in the U.S. earns $1,000 or more in gross revenue from a business activity that is not related to its exempt purpose, it has to pay income tax on the money earned.
This same rule is applicable in many foreign markets. Organizations should consult with an international expert with experience in their target markets to ensure cover all tax requirements.
In Canada, for example, most non-profit organizations are exempt from income tax. Although they’re exempt, they still need to complete an income tax return each year for the Canada Revenue Agency. In addition, registered charities must file a Form T3010 and financial statements within six months from the end of each fiscal period.
One of the most important aspects for any organization to consider when expanding overseas is compliance. Non-profits hiring overseas need to ensure that they are managing all of the legal requirements associated with employment. These include, but are not limited to:
- Employment Agreements
These important rules and regulations vary from country to country and can be challenging for many organizations to handle alone, especially those on a limited budget. One of the most effective methods for managing compliance during the overseas hiring process is through International PEO. This expansion solution takes care of all the compliance requirements listed above and also helps with work permits, payroll management, onboarding, and ongoing employee support.
Learn more about how our International PEO solution can help your non-profit hire top talent by offering non-profit work abroad in 185 countries. Reach out to our team of experts today and begin sharing your non-profit’s mission with a new, international market.