Local Entity to PEO

Helping your business switch from a local entity or subsidiary to a Global PEO

Transition from a local entity to a Global PEO

If you have an established business operation overseas, you may be able to save significant money by moving from a local entity to a Global PEO.

New Horizons Global Partners assists companies transition from local entities (such as a subsidiary company) to Global PEO – quickly, compliantly, and cost-effectively.

Sometimes, when expanding internationally, setting up a local entity (such as a subsidiary of your enterprise) makes sense. It can often provide clarity around your legal and compliance obligations. 

However, maintaining multiple overseas entities can eventually become costly and time consuming. Switching from a local entity to a Global PEO has the potential to save you thousands in ongoing costs.

Why switch from a local entity to a Global PEO?

Switching from a local entity to a Global PEO – like New Horizons – can save your business considerable time and money. Through our Global PEO, we manage payroll, HR, recruitment, and employee onboarding. This removes the burden of establishing different entities in multiple locations. 

Ongoing Cost Savings

A Global PEO manages payroll, benefits distribution, and HR duties. This can lead to significant savings when compared to operating your own local entities.

Streamlined Global Footprint

Instead of managing multiple entities across different jurisdictions, you're able to deal with one entity and expansion partner - New Horizons.

Business Focus

We take time-consuming functions like payroll, HR, and legal compliance off your hands. This allows you to focus on your daily business operations.

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What is an International / Global PEO?

An International or Global PEO (Professional Employer Organization) is an outsourcing firm that provides services to businesses of all sizes. A Global PEO can offer HR expertise, safety and risk mitigation services, payroll processing, tax withholding, benefits administration, and training and development. A Global PEO like New Horizons will also recruit and onboard your international workforce. This enables companies to quickly and compliantly hire employees and operate a business overseas.

When you engage a Global PEO, it becomes the legal employer or ‘Employer of Record’ for a company’s employees. A Global PEO absorbs all local employer responsibilities, whilst the client company maintains autonomy and control over employees. 

Benefits of switching to a Global PEO

There are numerous benefits to your business in switching your international workforce from a local entity to Global PEO:

  • 1. Reduced operational costs as Global PEOs can administer payroll and benefits at a lower cost than subsidiaries.
  • 2. Reduced compliance costs, with no need to engage separate lawyers or tax advisors.
  • 3. All employer responsibilities, administration, and HR tasks are taken off your hands.
  • 4. One point of contact across all international sites (the Global PEO), rather than multiple entities/subsidiaries.
  • 5. Strategic advice from expansion experts in offices located across the world.
  • 6. Simplified payment across all offshore outposts, with just one monthly invoice.

How does switching to a Global PEO work?

1. Agree to Global PEO solution

First of all, a business and New Horizons enter into an agreement that sets out how the Global PEO will operate. This identifies the necessary solutions and support mechanisms provided by New Horizons, as well as the details of the ongoing Global PEO partnership. 

2. Switch any staff from the local entity to the Global PEO

You may have staff that are currently employed or contracted to a local entity, that you wish to switch to the Global PEO. If this is the case, arrangements need to be made to end existing contracts and commence new contracts with the Global PEO. Alternatively, workers can be switched from a local entity to a Global PEO under their existing terms. 

3. The Global PEO hires any new staff as required

New Horizons sources, hires, and onboards staff members for your overseas operations. Employees are transitioned into their new roles and compliant employment contracts are drafted that outline compensation, benefits, employee responsibilities, and rules around termination. 

4. Monthly payroll 

Once the Global PEO terms have been finalized, New Horizons is responsible for the ongoing management and processing of payroll. As well as paying wages and salaries, all income tax and compulsory employer contributions are administered. Payroll services include the management of employee expenses and reimbursements at no additional cost. 

5. Human resource management 

As the Employer of Record, New Horizons oversees HR duties and manages any employee grievances as they arise. New Horizons collaborates with you regarding employee performance and the effective resolving of any conflicts. In consultation with the client company, we facilitate all employee renewals and terminations.

Frequently asked questions

Yes. With your input throughout the process, New Horizons recruits and hires staff for the Global PEO. All employees are hired under an employment contract which is fully consistent with local laws. 

Yes. There may come a point in your international expansion where it makes sense to switch from a PEO to a local entity.  If that happens, we can ensure a smooth transition from PEO to local entity. 

If an international expansion is large enough, or there is a need to have a formal legal presence in a new country, establishing a local entity may be a good idea. We advise clients around the specifics of this, and provide support in setting up a local entity. 

In addition to the substantial savings associated with setting up a legal entity, engaging a Global PEO significantly reduces your ongoing costs. Instead of facilitating payroll, benefits administration, human resources, and compliance across a range of entities, a Global PEO takes care of it all. 

In addition to the substantial savings associated with setting up a legal entity, engaging a Global PEO significantly reduces your ongoing costs. Instead of facilitating payroll, benefits administration, human resources, and compliance across a range of entities, a Global PEO takes care of it all. 

When you engage a Global PEO, you pay one entity (the Global PEO) once a month. By contrast, if you operate multiple entities in different countries, you have to deal with separate employee payments in many different currencies.