Free HR Webinar on Global Expansion
View our free HR webinar to earn free HRCI & SHRM credits
Ascentis recently hosted a free HR webinar titled Understanding Your Options for Global Expansion in 2017. This free HR webinar recording is approved for 1.0 free SHRM credit and 1.0 free HRCI credit and available to watch here. Our expert speaker from this webinar, Ben Wright from Velocity Global, presented on this topic on expanding globally and wrote the below reflection on this topic.
Options for Global Expansion in 2017
by Ben Wright
In a recent free HR webinar, I discussed the importance of building an effective global expansion strategy before expanding business operations overseas. In today’s volatile market, global expansion has become a necessity for companies who want to remain competitive, and doing so compliantly and efficiently is of the utmost importance.
For HR professionals looking to build human capital overseas, choosing the right employment method is essential. Depending on your company’s needs there are four major international employment methods.
Non-Resident Employer (NRE)
In some countries, companies have the ability to file forms allowing them to employ people in other countries without setting up a “true” legal entity in those foreign countries. This option is cheaper than entity establishment and has fewer regulatory requirements. However, this option has limited functionality, a very short shelf-life, and is often scrutinized for lack of compliance.
Foreign Independent Contractors
International contractors are highly qualified, flexible workers that can help your company enter a market quickly. However, the use of foreign independent contractors is one of the most common international employment traps as most contractor agreements fail to address employment, legal or tax issues, and do not protect intellectual property. Protect your company by utilizing a locally compliant contractor agreement and ensuring they remain firmly in the contractor category.
Foreign Branch or Subsidiary Establishment
If a company has the financial resources, plans to hire a large head count, and is committed a country’s market for the long-term, then creating a foreign establishment could be their best option. However, setting up a branch or subsidiary is expensive and can take an average of 3-4 months, which can be a roadblock when time is of the essence. Additionally, if a market or hire doesn’t work out, the cost and time frame needed to shut down operations in a country is expected to increase by a factor of three, compared to set-up. With a foreign subsidiary, HR and legal departments need to consistently stay updated on the ever-changing labor laws in countries where their company operates.
Companies looking to enter a foreign market efficiently and compliantly can accomplish this by utilizing an International PEO. This method of hiring allows for flexibility and provides your company with on-going employment support to ensure all employees overseas feel like a true part of the company. This solution is quick, cost-effective and simplifies compliance issues. For HR professionals, International PEO is the answer to their international hiring and compliance woes.
Although there is no one-size-fits-all solution, International PEO can streamline the task of global expansion for companies who are ready to take advantage of international opportunities. Visit VelocityGlobal.com or download our free eBook to find the right employment solution for you.
If you enjoyed this topic and would like to learn more, click here to view our free HR webinar recording and by viewing this recording you can earn free HRCI & SHRM credits.
This topic is one of an ever-growing library of HR education. So be sure to sign up for one of our free HR webinars, our free Payroll webinars, and our HCM News & Trends newsletter so you can stay up to date on current HR practices in 2017.