The most important rules when hiring abroad without a legal entity – the “how to” guide on hiring internationally

hiring abroad without a legal entity

Hiring employees abroad can be a great way to expand your business and tap into new markets. However, it can be a complex and challenging process, particularly if you do not have a legal entity established in the country where you want to hire. This is where a global mobility services company such as International Payroll Services comes in to help you hire locally, adhere to the local rules and customs, prepare the global payroll, help with payment processing and do all of it compliantly.

More about IPS International Payroll Service

Here are some of the most important rules to keep in mind when hiring abroad without a legal entity

1. Understand local labor laws

One of the most critical things you need to do when hiring abroad in the course of international expansion is to understand the local labor laws. Each country has its own set of regulations governing employment, and it is crucial to comply with them. For instance, you need to know the minimum wage requirements, working hours, vacation time, and overtime rules to avoid potential legal problems down the line. Using our international human resources management team, we can help you navigate the legal jungle and guide you with our local payroll knowledge.

2. Check the visa requirements

Before you can hire someone abroad, you need to ensure that they are eligible to work in that country. Make sure to check the visa requirements and work permits needed to employ foreign nationals in the country. Some countries may have strict requirements, so it is vital to be aware of these before making any hiring decisions and to ensure one is in employment compliance from the start. An EOR Service provider may be able to help in getting the required visa for a desired candidate.

More about IPS EOR Service

3. Understand and comply with local tax obligations

When hiring an employee abroad, as an employer, you will be required to pay taxes and social security contributions on behalf of your employees according to local employment regulations. The amount will differ from country to country so be sure to be aware of the additional costs on top of the gross salary. Make sure to comply with all local tax regulations to avoid any penalties or legal issues and ensure employer compliance. With the help of our in-country payroll expertise, we can give estimations of total costs so you can budget accordingly and ensure labor law complianc

4. Be aware of cultural differences

Cultural differences can significantly impact your hiring process when hiring abroad. Make sure to research the cultural norms and expectations in the country where you plan to hire employees. This can help you better understand how to communicate with potential international candidates, negotiate salaries, and manage your remote workforce effectively. With the help of our global employment solutions team, we can guide you around any possible pitfalls.

5. International Employee Benefits

Benefits packages can include a wide range of offerings, such as health insurance, retirement plans, stock options, vacation time, sick leave, and more. However, the types of benefits that are commonly offered and expected can vary greatly from country to country. Some countries do not need additional benefits whereas in other countries, extra benefits are necessary to remain a competitive employer. Our global HR Management team can advise on what benefits a candidate may expect in the respective country and ensure the best global HR solution. 

6. Use local resources

When hiring abroad, it can be helpful to use local resources such as recruiters or HR consultants. These professionals can help you navigate the local labor market, understand the legal requirements, and find the right candidates for your business. They can also provide valuable advice on cultural differences and how to manage a remote workforce effectively. A global workforce management company such as a global PEO service provider can guide you with local knowledge and tips as they have the local knowledge in-house.

More about IPS global PEO services

7. Choose the right employment model

There are different employment models available when hiring abroad without a legal entity, such as independent contractors, hiring with the help of a global PEO service or global EOR service, hiring directly through a Virtual Company or a specialized cross-border employment solution (secondment). Each model has its own pros and cons, so it is important to choose the right one based on your specific needs and budget. At International Payroll services, we can provide a customized solution to ensure your international HR outsourcing service delivers what is needed.

In conclusion, hiring employees abroad without a legal entity can be a complicated process, but it is possible to navigate it successfully with the right knowledge and preparation. By understanding local labor laws, visa requirements, tax obligations and cultural differences, our international employment services team can help you build a successful remote team and grow your business globally. With a global PEO Service provider at your side such as ourselves, hiring successfully internationally has never been easier!

Contact form
No Blog Title Set