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Cutting through the red tape
Key points
- An employer of record (EOR) structure is a third party operated business that can be used to employ overseas workers.
- An EOR can be used as an alternative to setting up a branch or company in the jurisdiction of employees.
- Fast growing but loss-making tech business with the need to take on people quickly and easily would be attracted to the EOR approach.
- Be wary of whether someone who is employed by a third party creates a permanent establishment (PE).
- PEs are normally created with the employment of senior managers and salespeople or if local branches are created for the purposes of local company law.
Advising small and medium-sized enterprises (SMEs) on the tax issues associated with expanding overseas can be daunting so new ideas to reduce the inherent complexity for the busy entrepreneur is always welcome.
An ‘employer of record’ (EOR) structure is something to consider...
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