Outstaffing can have a few different meanings depending on your industry and geography. “You say tomato, I say tomahto,” goes the George Gershwin song. Well, in the case of full employer of record services across the globe, the lingo is dependent on where you are geographically.
While diving into this industry, I noticed the term outstaffing has a very specific definition in regards to the CIS (Commonwealth of Independent States) countries.
Given my personal interest for these states, I decided to look into why outstaffing is right for your company in the region. So if you are coming from the tech/IT industry and looking for a specific reason on why you should use outstaffing, then this article is not for you, unless of course, you are looking to do so in the CIS.
Outstaffing and Doing Business in the CIS
The top countries where foreign companies do business in the CIS are Russia, Belarus, Ukraine, and Kazakhstan. If you’re looking at opening a subsidiary or representative office in these countries on paper registering your entity with the proper authorities is fairly painless. The steps that follow to maintain the entity are quite arduous. Soviet-style bureaucracies, and the amount of time it takes to maneuver through them, affect opening a bank account. These hurdles can even affect organizing a legal address, obtaining work visas for foreign employees, translating and notarizing all legal documents, and recruiting and hiring a local general director or head of the representative office.
Combine this with the current political and economic situations. In many of these countries, you have a justifiable hesitation to opening a legal entity. So how do you bypass these steps? Which strategies are out there to save time and mitigate risk?
The Outstaffing Solution
Outstaffing allows companies to take a lean approach to international expansion. It allows companies to utilize the legal entity to serve as the employer of record in your target CIS country so that you do not have to maintain a legal entity. There is no need to reinvent the wheel unless your business model absolutely demands it. Companies that may need to open a foreign legal entity or company are usually involved in manufacturing or real estate. Their bottom line requires owning many physical assets.
Want to expand your business into the CIS the Lean and Agile way? Take a look at International PEO. We can have your employees set up as quickly as your business needs!