When you choose to hire remote employees in a different country, you will have a decision to make on the best way to accomplish your hiring goals. Tech companies that hire remote employees overseas have four primary methods of hiring — create your own legal entity in the country, hire with the help of an Employer of Record (EOR), hire with the help of a Professional Employer Organization (PEO), or hire independent contractors.
No matter which direction you choose to go to expand your team and your business, it is important to know and understand that each hiring strategy has its own list of pros and cons that you need to weigh. A legal entity operates in a different country from the parent company as an extension of that company — which provides a level of autonomy and freedom that other hiring methods may not. With that being said — it is important to understand the common difficulties when setting up an entity to hire abroad.
Truss provides tech companies with global recruiting, hiring, and management services with a comprehensive platform that adds employer of record services. Truss provides U.S.-based tech companies with access to premier talent in emerging markets like Central Asia and Eastern Europe. We are here to help you find, recruit, hire, and manage remote employees across the globe that will help your company drive success.
Contact Truss today for more information on our global hiring services!
READ MORE: Common Difficulties When Hiring Through an EOR
What Are the Challenges of Hiring Abroad with a Legal Entity?
Hiring abroad through a legal entity gives you access to a global talent pool, but it also introduces a complex set of challenges that you will need to navigate. When you know and understand the challenges you may face when you hire with a legal entity, you can better prepare for the future and potential outcomes. Here is a closer look at the challenges that go hand in hand with hiring abroad and creating your own legal entity.
1. No Compliance Support
When you hire remote employees in another country, you must remain compliant with local employment laws that dictate taxes, payroll, employment contracts, employee benefits and more. Tech companies that hire with a legal entity do not have the compliance support provided by an EOR or a PEO — running the risk of compliance mistakes that can result in legal and financial penalties.
2. Higher Costs
Creating a legal entity in a different country means you need to find an office, have a team on the ground, and register the business. These aspects of a legal entity translate to higher costs for you and your business. Add global taxes, fees, and financial withholdings to the equation and a legal entity can cost more than working with an employer of record.
3. More Time Invested
It can take weeks or months to set up a subsidiary of your business or legal entity in a different country and that can put additional strain on your business operations. Even after you have created a legal entity, it will take additional time to find the right people to fit your company and complete the hiring process.
4. Cultural and Language Differences
No matter which method you use to hire global remote employees, cultural and language barriers present a challenge. With a legal entity, you will need to address these challenges directly, while an employer of record will be your primary point of contact, alleviating concerns with those barriers, and recruiting English-speaking employees.
5. Protecting Intellectual Property
Tech companies that create software, mobile applications, and more are no strangers to intellectual property law in the United States — but that can be more difficult to navigate when you operate with a legal entity and in multiple countries.
READ MORE: Common Difficulties When Hiring Through a PEO
Why Choose Truss as an EOR for Remote Hiring
Is hiring abroad with a legal entity the right choice for your tech company? Before you make your decision, it is important to understand the common difficulties when setting up an entity to hire abroad. Truss is here to help answer your global hiring questions and provide you with an alternative.
Truss is an employer of record provider in Central Asia and Eastern Europe with a comprehensive global hiring platform that will help you find the right people to join your team. We are here to help you find, recruit, hire, onboard, and manage remote global employees — handling everything from payroll and employee benefits to compliance with local employment laws.
Contact Truss today to learn more about the advantages of hiring with an employer of record!
