Business is great with US customers and now you are ready to hire a sales team in EMEA
or APAC and expand internationally?
Can’t find the talent you need to get your product off the ground and need to hire developers outside of the US?
Clients in Australia love you, but you really need to provide local customer service?
Our clients run into all these scenarios and more more. Once upon a time, going global was only for big companies but right now small businesses and even startups are jumping in and going global. But hold on a second Jack: There’s rocks under that water. Before you take the leap into worldwide dominance, make sure you have the information, processes, and details down otherwise it can be an expensive dive.
Every country has its own set of rules and regulations regarding employment by foreign entities. “That’s okay, “ you say, “I will just hire a contractor.” Not so fast. Many countries have strict rules about that too. For instance, in China it is literally illegal to hire an independent contractor there. You must have a business entity set up and then hire an employee to work under that entity. Can you cross your fingers and try to do the contractor thing, especially if you already have an interested and qualified candidate? Sure, but the consequences may be your product being banned from the country. Not sure you would want to take that risk.
So, what do you need to consider (and whose advice should ou seek) before you spring into this venture.
The country/region you are considering
Make sure you understand the cost of employment in wages, social programs, required benefits as well as employment laws. In many countries, there is no at-will employment status so companies must have documentation and good reasons for terminating employment and it can be costly. Having a good international HR expert will benefit you greatly here (hint, hint- we do that).
Also, if setting up an entity in that country is required, consult with an international business and tax expert.They can also help you understand business tax implications. (We know some of these folks and are happy to recommend one that fits your business.)
Some countries in the EU and EMEA region are easier, cheaper and better to hire in than others. Good advice here can really matter.
The length of potential engagement/employment
If you just not ready for full time or the expense and time of setting up an entity and employee, consider working with a third party employer in that region. Just like PEOs here in the US, there are international PEOs that are already set up and can handle payroll, benefits, taxes, pretty much everything for that employee for a price.
There are also companies that are focused on specific industries or expertise, such as a sales group that can represent your product, assigning one person to take direction from your sales team. .
And you probably know about outsourcing development or manufacturing or support to a third party. This has been around for quite a while and may be the solution as well.
Yeah, but I only need the one person in the one country, any other solutions?
You could consider having a potential contractor from that country create a business entity and make himself or herself an employee of that entity. Now you don’t have an employee arrangement, you have an international corp-to-corp arrangement. We recommend that you and that individual go through an international business services firm that registers entities in foreign countries, administers on-boarding, accounting and payroll. That way, all the details are ironed out and he/she is focused on doing the work for you and not running the business.
ValentineHR will be conducting a series of classes on various management related topics the first Thursday of every month. Our next session will be on Management/Leadership Best Practices from 8:45 a.m. to 11 on Sept 5. Free breakfast included. Contact firstname.lastname@example.org for pricing and location details.
As always, we can help! Contact us if you have any questions.