What is International PEO?
1. For almost any business operating today, international expansion is a realistic prospect as it grows over time.
2. While all businesses want to expand internationally, it’s not just something that happens overnight. It requires careful research, planning, and timing.
3. To make international expansion a success, businesses should be prepared to comply with the laws and customs of each country they want to operate in (i.e., tax and employment laws).
4. For businesses that don’t have the time or resources to carry out all the necessary research, planning, and execution, it’s not the end of the road – international expansion is still a possibility with the right partner.
What Does ‘PEO’ Stand For?‘PEO’ stands for ‘Professional Employer Organization’. In essence, these are organizations that provide global employment solutions, enabling businesses like yours to hire employees anywhere in the world quickly and compliantly, without the need to establish and operate your own foreign legal entity such as a company or corporation. By partnering with an international PEO, businesses like yours can efficiently expand overseas and gain an understanding of relevant foreign markets without the full burden of having to do everything yourself. This is because global PEOs are experts in global expansion, staffed by consultants with all the necessary niche knowledge and understanding required to prepare businesses for foreign market entry. Below are some examples of where an international PEO’s services can help a business with its overseas operations:
How Does an International PEO Work?
If you’re looking to expand overseas, an international PEO can help your business gain a legal presence in virtually any foreign jurisdiction. In addition, they make it easier for businesses to source, hire, and onboard skilled employees based in the locality they have expanded to.
This is possible due to the way international PEOs operate: Their in-country recruitment and employment experts hire your international employees and become their legal “Employer of Record”. As the Employer of Record, the international PEO is responsible for all compliance, tax, payroll, employment benefits, and risk mitigation.
This reduces a significant amount of the burden from your business, allowing it to save up to 85 percent on standard expansion costs and focus on what’s important without being bogged down by the formalities.
What is an Employer of Record?
An employer of record is a way for companies to benefit from international talent without having to set up a legal entity and comply with local laws, regulations, and customs.
This is because the employer of record (the international PEO) already has a registered company within the country that you’re hiring international employees in. They handle all the legal formalities while you reap all the benefits.
The employer of record arrangement also allows you to scale your international operations very quickly. This is because you can add new international employees as you need them without having to worry about the expense and compliance risks.
When an international PEO acts as an employer of record, your business handles the employees’ day-to-day while the PEO takes care of hiring, payroll, taxes, HR, and more on your behalf.
How an International/Global PEO Differs from a Domestic PEO
A PEO’s remit isn’t limited to international expansion; plenty of businesses use domestic PEO services to outsource specific HR tasks and other administrative responsibilities for their domestic operations.
Some examples of domestic tasks that a business may outsource to a PEO include: