Monthly Archive: July 2018

How to Manage Payroll if your Company has No Legal Entity in the Country

INTRODUCTION

Employing foreign staff resident abroad looks attractive to many employers of labour and quite easy with the rise in exploitation of opportunities presented by the internet. Across the shores of your operating country, lies many skilled workers , representatives and specialists whose services can add flavour to your business. The headache sets in when you try to evaluate what modes are available to manage  payroll services, especially as you are not yet registered as a legal entity. In choosing a payroll model for a foreign subsidiary or employee , issues of cost and the risk of non-compliance with payroll and employment laws must be well thought out.

EMPLOY VIA A THIRD PARTY

This is not a new avenue for persons conversant with circumventing foriegn employee laws. All you need is to employ your worker through a third party already set up in your choice destination. This will require a sort of existing relationship with the local  vendor existing as a corporate entity , who will place your employee on their payroll. Otherwise, a deal is reached with the vendor to be paid some amount as commission for placing your employee on their payroll. This will mean that you channel the salary to the third party who will be paying on your behalf.

GEO PAYROLL OUTSOURSING

A great way of handling payroll services abroad., is through GEO payroll outsourcing. They have links with local employers that can readily hire your employee legally. This option is best when you can’t find a trusted third party vendor on your own. The GEO sts up the payroll, calculate all statutory contributions and pay the employee.

AFFILIATE /SUBSIDIARY FIRMS

In cases where the number of employees is reasonable, the local workers can form a local company and enter into a business agreement with the offshore company. Trade between both parties will be at arm’s length, with the employing firm paying for the services of the local company but the local company will take care of its administration and tax issues. This means that the foreign company has no operational control over the local company.

INCORPORATE AND REGISTER A LOCAL ENTITY

If the commitment to the foreign market is tangible, setting up a corporate entity is the best option. Although, this may be tasking and require arduous registration, it is worth the stress especially If the number of employees is growing. This will require that you engage consultants or people in the business environment of your choice destination to enlighten you on the best options available, risks , benefits and all other information. In this new model, your payroll services can either be done in-house but it is wise to subscribe to payroll outsourcing.

CONCLUSION

Venturing into new grounds is not at all an easy step, especially when it is abroad. There are new regulations and tax / employee laws to comply with but the services of skilled professionals in those places make the stringent regulations look surmountable. Through any of the above steps your payroll services can be taken care of , visit payrollserviceaustralia.com.au for more guidance.