The prospect of companies going abroad has great potential, and a large number of companies have achieved notable business success in globalization. However, for most companies, globalization layout and development is not smooth sailing. Companies need to be familiar with local regulations, taxation, employment, laws and other aspects of going abroad to ensure eventual business success, and also need to consider the cost and time, which is obviously not an easy task.
Whether a business should set up a overseas entity？
The cost and time required to set up a local entity overseas varies depending on the country and region, but the average cost is about $80,000, or about 520,000 RMB, and the average time can take up to 5 months. (*varies depending on country data)
During this process companies must have professional legal and financial teams to ensure compliance, HR teams to handle onboarding of overseas employees, and global payroll providers to support the establishment of the entity.
For companies going overseas for the first time or entering new regional markets, whether full-time or part-time, it is a better choice to entrust the HR business to a quality service provider, which can significantly reduce the cost, time and risk of hiring overseas employees by eliminating the need for companies to build their own entities.
With the help of third-party services, the complex process of building your own entity and then hiring employees is simplified into a few short steps, and the whole process is handled by the professional team provided by the service provider.
How to hire part-time employees？
Some companies hire overseas employees on a part-time basis depending on their business. The advantages of this approach are low cost and flexibility, but it can also present some compliance challenges. And for some demanding positions, a full-time job will be more attractive than a part-time job.
Some enterprises sign paper contracts with overseas part-time employees directly with domestic subjects in the early stage of going abroad, without considering a series of problems such as taxation and social security. Although it reduces the time to a certain extent, such a way is totally undesirable and will probably violate local labor laws, and in case of labor disputes employers will probably face legal actions and huge compensation. At the same time, failure to complete background checks on overseas employees can lead to the freezing of corporate bank accounts and government requirements for consolidation, which will undoubtedly have a huge impact on the normal operation of the company.
The service provider can provide the necessary compliance procedures and template contracts for companies to complete online contracting with employees in a regulated and approved manner. The service provider also conducts compliance background checks on overseas employees to ensure that they have not engaged in improper business and have no criminal records, thus avoiding the risk of litigation or bank account freezes.
The service provider will provide a monthly payroll after the employee joins the company. Instead of arranging for monthly accounting and payment of various fees, the company only needs to adjust the bill according to the specific situation and deliver a lump sum of fees to the service provider according to the amount on the payroll, and the service provider will complete the payroll distribution according to the payroll, and the company is free to choose the currency of payment to the employee.
How to Hire Full-Time Employees？
The advantage of this method is that it provides complete social security protection for employees, which is more attractive for enterprises to recruit high net worth positions and easier for enterprises to plan and manage in the long term, but the full-time method will bring more problems for enterprises to consider, such as the tax and social security of employees and the contracting body.
The way of self-built main body and employee contracting is accompanied by high cost and long time, which is a huge cost even for mature enterprises, and it is difficult and unnecessary for enterprises in the early stage of going abroad. At the same time, self-built subjects also need to complete background checks on employees, and in case of legal, compliance or violation of local labor laws, the subject of the enterprise will be the first responsible subject.
Employing full-time employees through a service provider allows for the hiring and management of employees, background checks, local tax and mandatory benefits (similar to social security provident fund), legal compliance, local currency payroll, local culture and policy consulting, and other matters to be completed without the company having an overseas entity.
Although the company hires the employees, legally, the employees are the subject of the service provider, and with the compliance and payroll services provided by the service provider, the company will be fully legal and risk-free in its employment. This is a purely HR service that helps the company deal with the complexities of the day-to-day business while retaining the management rights of the employer, who still has full discretion.
At the onboarding stage, the service provider will provide the same background checks as part-time employees to ensure compliance, and will provide a contract template and online contracting service for full-time employees. Of course, the employer can also choose the contract of their choice.
Once the employee is onboarded, the service provider will provide the company with a monthly payroll that protects social security, personal tax and other necessary expenses based on the employee’s contracted salary, eliminating the need for the company to arrange for monthly accounting and payment of fees.
The service provider will ensure that the company’s employment is fully legal and compliant. The company only needs to adjust the bill according to the specific situation and deliver a lump sum of fees to the service provider in the amount stated on the payroll.
Conclusion
Whether full time or part time, the service provider can provide full process services for companies to legally hire their first overseas employee overseas. In a changing environment, the service provider also provides real-time tips on local policy changes to help companies respond in advance.
It provides an efficient, compliant, low-cost and risk-free globalization solution for enterprises, which truly simplifies the overseas employment of enterprises.
In the process of globalization, companies no longer need to worry about various issues, focus on business development and business success, and set sail.
