All about the operational challenges and solutions of remote working, with a focus on payroll, HR, tax and compliance.

🗣️ SPEAKERS

🗒️ NOTES & RESOURCES

What are some of the things we should be thinking about?

• The most important: look at the tax residency of the individual. If they're working in a country that they're not employed / paying tax in, this can lead to issues.
• Generally, for many (not all!) countries it's about the 183 day rule: if the individual stays for more than that in any rolling 12 month period, it's very likely that they will incur tax obligation after that period. However, this should be looked into on country by country basis.
• An individual will have tax obligations once they trigger tax residency or they go over the time limit. As an employed you will ALSO have obligations. You have an obligation, as an employer, to know where your people are. Otherwise, you can face fines.
• Then look at HR implications. If they trigger the tax residency in the country they're working from, do they need to be payrolled and employed in that country, under local law.
• Entitlements to local employment rights at any country they're working from.
• Corporation tax implications (rare cases).
• Visa implications. You can end up with someone breaking visa regulations and becoming a tax resident in a country where they're not paying tax.

Brexit

• Talking to your team and understanding their long-term plans so you can act on that. Think about how you see a person throughout the lifetime of your company. It's all very situational.
• From employment perspective, it's an immigration issue. EU nationals will find it harder to work in the UK and vice versa.
• Any European employer can just register as a foreign employer in another European country and just have to run payroll in that country instead of setting up entity. Presumably that option will now be off the table after the cooling off period.
• From company's perspective, the impact has already felt severe from UK employer's perspective, e.g. number of applications plummeted which has increased the need for more international employment. However, this impact has been felt for a while already, not necessarily brought about by Brexit only.

How to think about global expansion?

• Consider the longevity of the engagement. Every country has very different rules around worker classification (contractor vs employee). If the individual is only working for you (no other clients), gets the same salary every month, has company email address, attends internal company meetings, many governments will ask for this individual to be classified as employee.
• You can start with contractor and then employ them full-time.
• Classification of worker's legislation varies widely depending on the country.
• Ask yourself "what's the relationship and what makes sense? What is practical? From the taxation, equipment perspective?"

Decision making

• Make sure you know what your options are before making a decision. There's no "only way". E.g. register, do contracting, use EOR. EOR isn't necessarily the best option for everybody.
• Might depend on the funding round and your business position.

Geographical locations

• Termination can be very challenging in many countries, so any country you look at - if you're considering to employ any people directly, or through EOR, the first thing you should look at is how easy is it to terminate someone in that country.
• UK, for example, is not hugely challenging. Not much grey area.
• E.g. The Netherlands, Germany, you have to go in front of a judge and plead your case why you're terminating this person. There's a chance that the judge will just say "no".
• EOR is a good place to start if you're thinking about a specific country.
• 3rd party employment isn't even regulated in most countries; it's not even a notion that governments have tackled. Some don't even consider 3rd party to be normal means of employment.
• Europe is one of the most challenging places to employ people because of termination and very employee centric legislation.
• Latin America is very challenging, Mexico has just passed a piece of legislation that's "just madness".
• North America is relatively easy. Australia is very easy (much like UK and Canada).
• Asia is fairly straight-forward.
• Africa is a massively mixed bag (depends on former colonies, e.g. South Africa is easy as ex-UK colony)
• Also very important: if you're in a position where you're considering your strategy around international employment, consider your ability to harmonise the employee experience and benefits for employees in different places. If you have a very distributed team, perfect harmonisation will not be possible.

Boundless infographics [click to download PDFs]

• Ireland benefits 🇮🇪
• UK benefits 🇬🇧
• Portugal benefits 🇵🇹
• Germany benefits 🇩🇪