There are plenty of options available for hiring overseas workers, whether you are a start-up business or a business that has been running for years. Here is an in-depth guide, looking at everything you need for employing overseas workers, the different options available, and how to hire them without the need to set up multiple branches in different destinations.
How Your Company Can Hire Overseas Workers
You can usually choose to hire the staff in one of two ways. The first route is to hire them as an employee. You also have the option of hiring them as an independent contractor. Both have their advantages and disadvantages, and this decision would ultimately come down to what is best for your business and what the laws are in the given country. Depending on where you are hiring, there will be local regulations and rules that must be followed. According to BradfordJacobs, a reputable professional employment outsourcing organization, your overseas workers need the correct work permit to be employed by your company in another country.
Hiring as a Contractor
Many companies look at hiring overseas workers as independent contractors. This is because labour costs can be kept down, and for those venturing into a new market, this is the perfect solution until your company finds its feet. In fact, contractors can cut costs by up to 40% rather than choosing to hire an employee. You also don’t need to follow any payroll or employment rules in the country that you are expanding to.
While this can be great for the money side of business, there are also many pitfalls to this plan. One of the biggest risks of hiring a contractor overseas is that the contractor could then be reclassified by the country as an employee. You will then be responsible for paying any benefits and taxes that they are owed, and you could be fined for withholding these benefits. If you want to work in certain countries such as China, you won’t be able to use this option at all, as they only allow companies to hire employees, whether this be local citizens or expats.
Hiring as an Employee
Hiring as an employee may be your only choice depending on what country you are working in. Employees will cost more than a contractor, and you will need to follow any regulations and rules about holiday pay, sick pay and hiring. This means checking the legalities for the country and ensuring that you follow the right rules when hiring an employee. When hiring as an employee, you can choose to send a local from home out to the country, or you can hire residents overseas.
You can choose to find your own employees, but this can be costly and timely, as you will need to set up a complaint payroll system and this also requires local incorporation. Your best option in this circumstance is to use a Global Employment Organisation (GEO). This is both cost effective and time saving, allowing you to focus on your start-up abroad whilst they manage any compliance risks and reduce any administrative burden.
Paying Your Overseas Workers
Once you have chosen how you are going to hire your overseas workers, you can then look at payments. There are several ways in which you can pay employees and contractors, and here we take a closer look at each method:
- Remotely – In some countries you can pay your overseas workers from your home country payroll. Contractors can be paid this way, but only if a proper invoice is written.
- Directly – Again, contractors can be paid via direct payments with a proper invoice, as well as some form of project completion confirmation. To directly pay employees, you must have an international payroll in place within the other country, as otherwise you may be breaking local laws.
- Third Party – There are options available such as using a third party or employment service payroll. For those businesses just starting up, GEO is your best option for hiring and paying employees, and for contractors it may be best to use contractor management services. This third party then takes responsibility for payment, withholding pay and work permits, making this a great option for companies just starting overseas.
Remember to research any laws and regulations regarding hiring overseas workers within the given country that you wish to expand to.