All about the operational challenges and solutions of remote working, with a focus on payroll, HR, tax and compliance.
As the pandemic continues, more companies are making a shift to being remote-first, or at the very least, adapting to the new conditions of temporarily operating on a remote basis. Whilst this shift creates more opportunities and flexibility, it can come with a heavy administrative burden and a ton of questions around managing this from an operational perspective. With so many things to factor in such as different residencies, nationality, destinations, tax implications, as well as which option to go for - contracting, outsourced payroll, subsidiary, etc., how do you know what's the right way? To answer some of the above questions, on 19th November 2020 we held an online panel featuring three amazing speakers, all co-founders of companies helping to navigate the intricacies of international employment.
💰 For Operations Nation attendees:
📧 Get in touch with...
🗣️ SPEAKERS
Alex Bouaziz, Co-Founder & CEO @ Deel
Deel is a payroll platform dedicated to supporting and hiring remote workers globally, that connects localised compliance and payments in one system of record and automates everything. They are backed by Y Combinator and Andreessen Horowitz.
Alex is a MIT alumnus and a true international entrepreneur, who helped to build startups such as Sarona Ventures, Lifeslice, and Cryptofighters earlier in his career.
Duncan Macintosh, Co-Founder @ Shield GEO
Having dealt with thousands of international workers over the last 20 years, Shield GEO is on a mission to make international employment simple.
Originally from Australia, Duncan has been living in the UK, France, Switzerland, Spain and Korea, and therefore firsthand experiencing all the issues Shield GEO's customers and international teams face. To escape the COVID and British winter, Duncan has recently moved to work from Barbados!
Dee Coakley, Co-Founder & CEO @ Boundless
Previously a three-time COO, Dee has spent the last 10 years building B2B SaaS businesses, and has experienced the operational challenges of setting up remote teams firsthand.
Boundless is the international employment platform for remote teams. It takes the hard work out of remote people ops by allowing companies to compliantly employ people wherever they are, and to get set up to handle payroll & tax filings in minutes.
Discussion moderated by Charlene Chen, COO @ Lantum
The panel discussion was moderated by Operations Nation Co-Founder, Charlene Chen. Charlene was a Co-Founder and COO at BitPesa (now AZA), managing global teams across 5 international offices and therefore is very familiar with all the challenges of international employment.
🗒️ 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.
Name | Link | Tags | Source | Type | Topic |
---|---|---|---|---|---|
The Ultimate Guide to Independent Contractors | Contractors | Shield GEO | Article | Remote Working Operations | |
Why Hiring Remote People as Independent Contractors is a Bad Idea - Compliant Employment | Contractors | Boundless | Article | Remote Working Operations | |
Remote Teams and Compliance Issue | Contractors | Shield GEO | Article | Remote Working Operations | |
Why Hiring Remote People as Independent Contractors is a Bad Idea | Contractors | Boundless | Article | Remote Working Operations | |
10 Inherent Inequalities Between Independent Contractors and Employees | ContractorsContractor to FTEFTEs abroad | Boundless | Article | Remote Working Operations | |
All You Need to Know When Hiring Independent Contractors in 2020 | Contractors | Deel | Article | Remote Working Operations | |
Independent Contractor Guide: Definition, Legal Aspects & Benefits | Contractors | Deel | Article | Remote Working Operations | |
Misclassification of Employees as Independent Contractors: Everything You Need to Know | Contractors | Deel | Article | Remote Working Operations | |
Independent Contractor vs. Employee: A Complete Guide | ContractorsContractor to FTEFTEs abroad | Deel | Article | Remote Working Operations | |
Create a great independent contractor agreement: A step-by-step guide | ContractorsRemote hiring | Deel | Article | Remote Working Operations | |
What to Do When a Foreign Contractor Starts to Resemble an Employee | ContractorsContractor to FTE | Deel | Article | Remote Working Operations | |
Risks of Non-compliance with Tax Laws for Multinational Companies and Employees | COVID "movers" | Shield GEO | Article | Remote Working Operations | |
How to continue employing people who want to move to another country | COVID "movers" | Boundless | Article | Remote Working Operations | |
How to be a Compliant Remote Company in 2020: A 10-step Guide | COVID "movers" | Boundless | Article | Remote Working Operations | |
Should You Hire an Independent Contractor to Work for Your Company Overseas? | Contractor to FTE | Shield GEO | Article | Remote Working Operations | |
Converting a Contractor to a Full-Time Employee: A Guide for Overseas Employers | Contractor to FTE | Shield GEO | Article | Remote Working Operations | |
The Pros and Cons of Setting Up a Foreign Subsidiary | Subsidiary setup | Shield GEO | Article | Remote Working Operations | |
How do you Pay Remote Employees in Different Countries? | FTEs abroadPayroll | Shield GEO | Article | Remote Working Operations | |
Can You Pay Your Overseas Employee Remotely? | FTEs abroadPayroll | Shield GEO | Article | Remote Working Operations | |
How to Manage Payroll if your Company has No Legal Entity in the Country | Payroll | Shield GEO | Article | Remote Working Operations | |
The Ultimate Guide to Payroll Outsourcing | Payroll | Shield GEO | Article | Remote Working Operations | |
When and how to outsource payroll | Payroll | Boundless | Article | Remote Working Operations | |
A Guide to Benefit in Kind Tax Around the World | Payroll | Boundless | Article | Remote Working Operations | |
An 8-Step International Payroll Set-up Guide | Payroll | Boundless | Article | Remote Working Operations | |
Five areas of international payroll you need to understand | Payroll | Boundless | Article | Remote Working Operations | |
What is an Employer of Record? | EOR (Employer of Record) | Shield GEO | Article | Remote Working Operations | |
How to choose your Employer of Record with 11 questions | EOR (Employer of Record) | Boundless | Article | Remote Working Operations | |
What is an Employer of Record? | EOR (Employer of Record) | Boundless | Article | Remote Working Operations | |
The Complete Guide on Employer of record (EOR): Definition, Benefits, and Liabilities | EOR (Employer of Record) | Deel | Article | Remote Working Operations | |
What is a Global Employment Organization? | GEO (Global Employment Organisation) | Shield GEO | Article | Remote Working Operations | |
PEO Solution vs. GEO or Employer of Record Service | PEO (Professional Employment Organisation) | Shield GEO | Article | Remote Working Operations | |
How to Hire Remote Workers | Remote hiring | Shield GEO | Article | Remote Working Operations | |
Setting Up Safe Workspaces For Your Remote Employees | Remote hiringRemote management | Shield GEO | Article | Remote Working Operations | |
Should You Pay Your Overseas Employee a US Salary? | Remote hiring | Shield GEO | Article | Remote Working Operations | |
How to successfully onboard remote employees | Remote hiring | Boundless | Article | Remote Working Operations | |
How to Conduct a Remote Interview: Preparation, Questions & Setup | Remote hiring | Deel | Article | Remote Working Operations | |
Five things that helped me become a good remote People Ops Partner | Remote hiringRemote cultureRemote management | Boundless | Article | Remote Working Operations | |
Why Should You be a Compliant Remote Employer? | Remote hiringCOVID "movers" | Boundless | Article | Remote Working Operations | |
Best Management Practices for Supporting Remote Workers | Remote management | Shield GEO | Article | Remote Working Operations | |
10 Essential Software Tools for Your Remote Team | Remote managementRemote tools | Shield GEO | Article | Remote Working OperationsTools | |
How to Run Inclusive Online Meetings with Your Remote Team | Remote management | Shield GEO | Article | Remote Working Operations | |
The Art of Remote Team Alignment | Remote management | Boundless | Article | Remote Working Operations | |
Suddenly Remote: Tips for Leaders to Succeed | Remote management | Boundless | Article | Remote Working Operations | |
A First-Aid Kit for Remote Newbies | Remote management | Boundless | Article | Remote Working Operations | |
How to Draft a Great Remote Work Policy for Your Remote Workers | Remote management | Deel | Article | Remote Working Operations | |
Remote Workers 101: A Guide to Managing a Successful Virtual Team | Remote management | Deel | Article | Remote Working Operations | |
Working From Home: A Productivity Guide for Managers and Employees | Remote management | Deel | Article | Remote Working Operations | |
How to Track Performance in Remote Teams | Remote management | Deel | Article | Remote Working Operations | |
Diversity and Inclusion in the Remote Workplace | Remote culture | Shield GEO | Article | Remote Working Operations | |
Leadership and Shaping Company Culture in a Remote Team | Remote culture | Shield GEO | Article | Remote Working Operations | |
Succeeding as a Remote Company: Lessons from Shopify | Remote cultureRemote managementRemote hiring | Boundless | Article | Remote Working Operations | |
Top Remote Work Tools & Software for a Productive Team | Remote tools | Deel | Article | Remote Working OperationsTools | |
Country specifics | Country specifics | Boundless | Article | Remote Working Operations |