Globalization Partners

How Can a Non-Resident Employer Legally Pay Employees?

by Globalization Partners
August 2020
Reading Time: 2 minutes

 

 

When you think about international expansion, your goal is to achieve success by competing in global markets. To achieve this, you will need to attract and onboard the best talent available. This is not always an easy task, especially if you do not have a business entity set up in the country in which you wish to hire.

You have to figure out how to run payroll, put together compliant, competitive benefits packages, and onboard employees – all without having a presence in-country. For companies that don’t want to go through the process of having an entity in place, there are other solutions available.

Some countries offer the possibility to register with local authorities to issue payroll. This option is known as “non-resident employer payroll,” or “payroll only registration.” 

Another solution is to hire through an Employer of Record. The Employer of Record takes on all legal, financial, and HR matters, allowing companies to hire quickly and compliantly through the EOR’s in-country entities.

What is Non-Resident Employer Payroll?

Non-resident employer payroll allows you to make a specialized “payroll only” registration with in-country tax and social security bodies. This registration will enable you to pay employees without the need for a legal entity. It’s only available in some parts of the world such as Canada, Australia, and some European countries.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) allows you to globally hire employees by placing them on its locally compliant payroll. You find, hire, and manage employees directly. The EOR handles salary, benefits, taxes, and all HR functions and related issues.

Payroll Only Registration and Employer of Record Side by Side

 

What Else Do You Need to Know?

Keep these factors in mind when considering non-resident employer payroll:

  • Application and approval time may significantly slow your go-to-market plan.
  • You will be 100 percent responsible for running a fully compliant local payroll.
  • Registering your payroll may establish your corporate footprint, which could complicate corporate taxes in the future.
  • There’s no real escape from the burdens of dealing with legal, financial, and HR issues.
  • All these hurdles could also make it challenging to attract the best talent.

Want to Learn More?

We invite you to read our eBook 10 Things You Need to Know About Payroll Only Registration.

Download eBook

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