Every business, no matter what the size, understands the importance of global mobility solutions. International growth is the natural progression of a successful firm. When you find yourself considering this in your company’s strategy, start putting together a list of questions to ask and metrics to prioritize to determine if global growth is right for your business right now. Things to consider including market vitality, product readiness, and the best global mobility solutions for employers.
One rule of thumb is to determine if it’s time for international growth is if 25% or more of your business is fueled by activity overseas, it’s time to expand into those markets. If that’s the case, start working with your entire organization to develop a global strategy that meets the needs of your target market while staying true to your original business plan. Here are some tips to guide your planning process.
A section of your strategy will explore options for hiring employees and maintaining compliance. Let’s look into your solutions below so you can determine an option, or two, to explore.
Global Mobility Solutions for Employment
The scale of options spans from a full in-country commitment to working solely with non-employee contractors. When reading through these solutions, think about your business’ structures and needs to move forward with the best fit.
The heaviest commitment is establishing a foreign subsidiary in your target market. If you’re new to the country, you should avoid this solution. Here are a few reasons why:
- High Startup Costs
- Complicated Compliance Management
- Choosing a Local Director
- Lengthy Process
- In-Country Requirements
If you’re in specific industries such as manufacturing or real estate, you may be required to establish a foreign subsidiary. Work with an international consultant to learn about requirements and find out if this is your only option for hiring overseas.
Employer of Record Services
If you want to get started up in your target market without the expensive startup fees and time commitment, consider using an EOR. This service gives companies the option to work with a third-party who acts as your employees’ employer of record. Options like Foreign Subsidiary as a Service (FSaaS) and International Professional Employer Organization (PEO) allow companies to hire employees and manage them daily without having to worry about compliance requirements. The EOR handles those for your company.
Compliance requirements include:
- Payroll Taxation
- Social Security
- Paid Time Off
The reason employers benefit from putting these responsibilities into the hands of a third-party partner is because of the changing regulations. Also, countries vary, as you can imagine, in the types of labor law requirements. It’s a lot to manage and if you don’t have, or want, a dedicated member of your team to take care of these important tasks.
In addition, global mobility solutions like FSaaS provide your team with a legal presence in your target market. If you run into any issues, you have a presence in-country, which is very important.
If you have one-off projects or temporary work, contractors may be the perfect solution for you. There are a few areas of concern with international contractors that you should be aware of before hiring. First, your domestic agreement is not valid in foreign countries. Make sure to establish a localized contract when working with a contractor overseas. On the same token, if a dispute arises with your contractor, courts will view the work performed as a basis for determining employment. As a result, your contract is thrown out the window.
Before hiring an international contractor, check out the risks v. rewards associated with them.
Also, your IP is not protected when working with international contractors. If you choose to work with them on a project, do your company a favor and protect your IP by not disclosing important information and trade secrets.
As mentioned in the EOR section, you should have a legal presence even when working with contractors, so setup an entity in-country using FSaaS to quickly take care of this requirement.
Whether you’re considering hiring local nationals or sending expatriates into your market, a solution like FSaaS will help. It reduces costs by as much as 60%, reduces hire time by up to 90%, and increases morale by producing timely and accurate payroll. Plus, your company complies with foreign laws and benefits.
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