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Introduction

The business world is full of opportunities, and every new country presents an international business with a unique opportunity for expansion. That’s why more and more businesses around the world are looking to expand into new markets. Of course, international business expansion is nothing to take lightly. It’s a big decision that requires careful planning, complex and comprehensive due diligence, and strategy. However, the most crucial step comes with hiring the right team to get your new operations established on the ground. Regardless of your industry, market sector, or area of specialization, you’re going to need human capital.

In this comprehensive eBook, we’re going to introduce you to one of the best ways you can go about hiring your new international workforce as you plan your international business expansion. If you’re not already familiar with a Global Professional Employer  Organization (PEO), then it’s time for you to see just how beneficial it can be to partner with one for your international business expansion.

Not only does it help you get your overseas operations up and running quickly, but it also shields you from some of the logistical and bureaucratic hurdles that often come along with formally incorporating into a foreign country.

By the time you’ve finished reading, you’ll have a better understanding of what a Global PEO is, what an organization like this can do, how it can help you establish your international workforce quickly, and how to select the right Global PEO partner.

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Chapter 1: What Is the Purpose of a Global PEO?

Sure, the idea of tapping into an untapped market, finding a new target audience to connect with, or hooking up with regional partners in order to simplify or expand your supply chain sounds good on paper — but what happens when it’s time to put your research, your prospects, and your vision into practice?

You’ll undoubtedly need a skilled, experienced, and dedicated workforce ready to take your vision in stride right from the beginning. Perhaps you’ll be able to bring some of your people over from your home operation, but it’ll be more likely that you’ll require a full and standalone workforce to help you build your expansion project from the ground up. Think about it—the international talent market is large, diverse, and quite robust, but it’s also competitive. How easy do you think it’ll be to break out into an international talent pool and quickly find high-end talent and experienced professionals to help you grow your international efforts?

Your HR team at home is already tasked with working with your domestic employees. Can you simply assign them the responsibility of enlisting the services of an international team of workers who speak a different language, follow different employment rules and regulations, and have different expectations?

You can certainly see the trend. The bottom line is simple—expanding internationally is a challenging and complex maneuver that takes a great deal of time and effort to get right. And, more often than not, it takes a critical partnership that allows expanding businesses to focus on what they know best.

What Exactly Is a Global PEO?

A PEO is an entity that can provide employee management services, administrative assistance, and compliance strategies for multinational organizations, businesses, and institutions operating outside of their domestic jurisdictions. In other words, they provide virtually everything from talent acquisition, to payroll, to benefits, to employee rights protections and employee management for a fee, all while your HR team focuses on the core of your employee relations back at home.

Essentially, a PEO is a legal entity that stands as the Employer of Record for your multinational organization. This ultimately grants the entity the permission to hire, manage, and pay taxes for your organization within your new host country on your behalf, without the need for your HR or administrative staff back at home to get involved and bogged down with foreign bureaucracy.

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What Exactly Is the Purpose of Working with a Global PEO?

There are several reasons why so many international expanding businesses choose to work with a Global PEO. We’ll cover the benefits of most of these later on, but for now, keep in mind that working with a Global PEO is essentially the same as working with an outsourcing HR company.

Your PEO is a legal entity that hires your international workers, except instead of working directly for you, they work for the PEO. This provides expanding businesses with greater flexibility in terms of how they navigate employment law, compliance, benefits, and so much more.

It also negates the need for businesses to formally incorporate themselves as an international legal entity within their country or region of choice. This is such an important consideration for companies looking to expand internationally because the process is time-consuming, stress-inducing, and quite labour-intensive.

By partnering with a Global PEO, your incorporation as a formal legal entity in your home country is more than enough to begin moving forward internationally.

Essentially, your PEO will act on your behalf within your new host country.

Through this partnership, you can bypass all the complex legal hurdles that come along with international incorporation. From there, your PEO will work to hire full-time and part-time employees on your behalf to manage your new company. In other words, you can sit back at home base and watch your international operations come to life right before your very eyes.

As you can see, the purpose of a Global PEO is essentially to make it easier for new businesses to take a keen eye toward international expansion. It provides an easy entry point, comprehensive partnership with an HR company that knows the legal requirements of the region, and a limitless pool of talent that your PEO can leverage to find you the very best workers in your area of expertise.

Now that you understand why Global PEOs exist, let’s talk a bit more about the problems that they solve.

Chapter 2 : What Problems Do Global PEOs Solve?

While we mentioned earlier that enlisting the services of a Global PEO make it easier for businesses to avoid establishing an international legal entity in a new country, in addition to hiring an international workforce, there is another problem that Global PEOs can solve. And even though it could be considered an intangible, it’s still such an important fact to consider when looking to expand internationally.

Essentially, partnering with a Global PEO makes it possible to dip your toes into the water before diving in head first. In other words, partnering with a Global PEO provides businesses with a window to test the waters before going through the process of establishing an international legal entity. Remember, formally incorporating into a foreign country is time-consuming, expensive, and quite challenging. Not only are there a ton of logistical hurdles that need to be crossed, but the bureaucracy is truly mindboggling. A Global PEO allows businesses to give it a go in a new market, without all the added risks of a poor investment. Partnering with a Global PEO might even make your international endeavours more enticing to potential investors.

For example, because you wouldn’t be establishing a legal entity, you can show your potential investors a clear and seamless exit strategy that you have available should the need arise. If things do take a turn for the worse, your Global PEO will be the one on the hook for your international workforce, not your home base.

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Give Your HR Team A Boost

There’s another considerable problem that Global PEOs solve, and this one relates to your HR team. Each day, your entire HR team works diligently to cover things like benefits, payroll, healthcare, vacation time, compliance, legal issues, and so much more. When you bring another location into consideration, even a domestic expansion, you’re now asking your HR team to take on double the workload.

When it comes to expanding internationally, it’s not even a question—you’ll undoubtedly be placing some serious strains on your HR team, especially if you don’t grow it.

Remember, your PEO will be staffed with regional specialists who understand everything from employment classifications to payroll requirements. Plus, they’ll already be familiar with the values, customs, and traditions of your new international workforce, ultimately freeing your organization from liability should employee claims or issues arise in the future.

By working with a Global PEO, you can give your HR team a boost back at home, while succeeding abroad.

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Filing Taxes Doesn’t Have to Be a Challenge

Every business knows just how stressful tax season can be, especially in your accounting department. When you’re a business operating in a single country, you don’t have to worry about separating revenue and income, following different tax laws, and searching for tax credits or potential liabilities. When you’re expanding internationally, however, tax law becomes much more complicated.

By choosing to work with a PEO, you won’t have to stress out about tax season. Instead, your PEO will take control over your international taxes and handle everything from tax preparation to tax filing—all while your domestic accounting team dedicates 100% of its attention to your at-home expenses and profits.

Now that you’ve learned how Global PEOs work, what they have to offer, and the problems that they solve, it’s time to learn how you can select your very own Global PEO partner.

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Chapter 3: How to Select Your Global PEO Partner

Selecting a Global PEO partner isn’t as complicated as it sounds. Essentially, you’ll want to work with a Global PEO that has a strong track record of working with companies in your industry. From there, you’ll want to look at their services, the scope of those services, and any relevant examples of where they’ve been able to make an impact. In this section, we’ll take a closer look at the different criteria you should look for in a Global PEO partner.

After all, because this company will be working with you closely to help you get your international operations up and running quickly, you’ll want to be sure that you’ve partnered with the right one. With that in mind, let’s look at some of the things you should keep in mind when selecting your Global PEO partner.

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Looking at What’s Available in Your Region

First and foremost, looking at the region in which you plan to expand into is of the utmost importance. You want to gain a closer understanding of what the Global PEOs in this region have to offer.

This means that conducting a simple Google search would be an excellent first place to begin. However, if you’ve already got a location in mind, then it’s likely that you have some connection to this new region. Perhaps another company recently expanded into this region, or maybe you already do business with a logistics partner in this region. Whatever it may be, use your relationships to inquire about Global PEOs in the region. From there, you can conduct your due diligence and ensure the proper fit.

Know Your Needs First

Because Global PEOs typically offer comprehensive services, it’s essential to know and understand the needs of your organization before contacting a Global PEO. First, what are your intentions with this new international expansion? Second, how many employees will you need? Will you need full-time employees, part-time employees, contract employees, etc.? Next, what level of experience are you looking for? Are you seeking top-of-the-line executives or skilled trade workers? You’ll know you’ve found the right Global PEO partner when they’re able to provide answers for all of the questions above.

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Contact Multiple PEOs

We always recommend keeping your options open. This means that it’s okay to contact multiple PEOs. In fact, you should! Contact different providers, learn more about who they are, what they do, and what they have to offer. Explain your vision and your intentions and see if there’s a fit. This is always a great way to begin looking into a potential partnership.

And once you’ve determined the right fit, it’s time to decide which services you require.

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Chapter 4: What Services Does a Global PEO Provide?

As mentioned earlier, Global PEOs essentially provide comprehensive, end-to-end services related to HR, staffing, training, and staff management for businesses looking to expand overseas. In addition to these services, they make it easier for firms to sidestep the need to formally incorporate, ultimately providing them with a more accessible point of entry. In addition to some of these overarching benefits, PEOs also provide specialized services across many critical areas for internationally expanding businesses. Let’s look at some of these services down below.

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Payroll and HR Administration

It’s critical to keep in mind that working with a PEO is so much more than simply outsourcing your HR processes. They take comprehensive control over everything from payroll to HR administration, leaving you with not much else to manage in terms of your new international workforce.

Instead, you can dedicate your attention solely to your new global operations.

Employment Tax

Tax compliance is often a significant point of concern for businesses looking to expand internationally. More than likely, the tax code in your chosen region will differ from your own, ultimately bringing new complexity into the mix when it’s time to pay your due taxes at the end of the year. When working with a Global PEO, they handle all your employment tax requirements, ultimately ensuring that the proper amount of taxes is withheld with each paycheck.

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Benefits Administration

Because benefits are guaranteed and required differently based on the location and region where you choose to expand, benefits administration for your workforce could differ quite significantly. This means that dealing with everything from maternity and paternity leave requirements, to paid time off, health insurance, and retirement benefits can become a challenging landscape to navigate. Global PEOs take these responsibilities off your shoulders, ultimately ensuring compliance across all these critical employment areas.

While it might only seem like these are simply three small sections, the scope of services that Global PEOs offer are quite extensive. They essentially serve as the bearer of responsibility for the entire scope of your employment infrastructure overseas—and that’s what makes them so important.

Now, while PEOs are unique, you may be familiar with other entities or systems that offer something similar. In the next chapter, we’ll show you how PEOs differ from, say, EROs and co-employment systems.

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Chapter 5: The Differences Between a PEO, an EOR, and Co-employment

At this point, you should have a pretty good idea of what a Global PEO is, what it offers, and the benefits that it provides. However, some other entities and systems provide similar services, just not at the level of complexity or scope that a Global PEO can offer you.

In this chapter, we’re going to take a quick look at EORs and co-employment systems to demonstrate precisely how these differ from a Global PEO.

What Is an EOR?

We mentioned earlier that a Global PEO essentially serves as an Employer of Record for your company when expanding internationally. While this is true, it’s essential to acknowledge the fact that an EOR (Employer of Record)  is not exactly a PEO.

An EOR, according to Innovative Employee Solutions, “puts a portion of your business and employees on its payroll. A PEO takes on all of your employees and provides all HR-related functions.”

In other words, an EOR simply places some of your business and some of your employees on your payroll. A Global PEO, on the other hand, offers comprehensive coverage, ultimately putting the entire scope of your international workforce onto its payroll, while also offering complete HR coverage for everything from payroll, to benefits, to claims, to HR administrative duties, and so on. So, while a PEO can be an EOR, an EOR cannot be a PEO.

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What About Co-Employment?

Co-Employment is a little bit different from each of these. Instead of placing your employees on the payroll of your PEO, a co-employment system would allow you to have the same employee on your payroll, plus your PEO’s payroll.

Essentially, there is a contractual agreement that is signed between both employers. In the case of a PEO, it would be possible to enter into this type of relationship for your new international employees, but it might not be worth the risk, should you decide to withdraw later on down the line.

Now that you’ve seen just how PEOs differ from EORs and Co-Employment systems, we can move onto the final section of this eBook.

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Chapter 6: Why a Global PEO Is the Right Choice for Business Expansion

No matter how you do it, international business expansion will always be a risk. Moving into a new market will always include some growing pains, but by partnering with a Global PEO, you might allow yourself to bypass some of the immediate challenges, avoid some of those growing pains, and hit the ground running for a successful endeavour. Given all the points mentioned in this eBook, all of the services covered, and all of the benefits presented, it should seem quite simple as to why a Global PEO is a right choice for business expansion.

Remember, Global PEOs provide the following:

  • Hiring
  • Payroll Services Benefits Administration HR Requirements
  • Tax Compliance Employer of Record Services

From there, they help to mitigate the following:

  • Risks Associated with Expansion Tax Liabilities
  • Non-Compliance Lawsuits Costly Incorporation Fees Expanded HR Duties

As you can see, the benefits of working with a Global PEO are simply too substantial to ignore. Now, it’s time  to see for yourself just how positive it can be to find a dedicated Global PEO partner for your business expansion.

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Conclusion

Congratulations!

Now that you’ve finished reading, you should have everything you need to know to find the right Global PEO to aid you in your international business expansion. You’ve now learned the services that PEOs have to offer, the benefits they can provide to your business, and how they differentiate themselves from EORs and Co-Employment systems.

If you’re ready to learn more about Global PEOs, contact us today, and we’d be happy to show you more about who we are, what we do, and why we do it.

Thanks for reading—and good luck with your international business expansion!

 

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