• International Investment, Global Expansion Opportunities, and HR Risks
• 3 Options for Multi-location International Employment
• Benefits of Working with a Global EOR (Employer of Record) Partner: Get Compliance Right
• How Global Employer of Record (EOR) Partner Can Solve Major Challenges Founders Face
• Quick and Easy Foreign Market Entry with a Global Employer of Record Services
• Benefits of Global Employer of Record: What Acumen International Can Bring to the Table
• Let Acumen Global EOR Handle the Employment, Tax, and Compliance Aspects of Your Global Expansion

International Investment, Global Expansion Opportunities, and HR Risks

Globalization has resulted in significant interconnectivity, meaning businesses can travel and reach new markets like the Silk Road of old. The commercial space is now a globalized network, and companies that raised investments in the last 12 months can and should take advantage of it. The economic effects of a globalized market are amplified because founders and investors can access new opportunities at a greater distance than ever before — their physical location or proximity no longer limits their reach to the consumer. 

To rise above the competition and become industry leaders, tech companies need to expand into new markets. For startups and scale-ups, global growth can mean gaining access to more customers, increasing revenue, and boosting brand visibility globally — not just in one region. Companies with international team members can benefit from a larger talent pool, faster time-to-market, and significant cost savings.

However, as startups and scale-ups grow and their staffs expand, the potential for HR issues and compliance violations increases. Navigating the maze of international laws isn’t easy — even small mistakes can lead to compliance issues down the road.

Those who take the time and effort to mitigate and adequately manage these employment-related risks will ensure that they don’t face a pile of unexpected legal fees — or worse, a severe issue that results in lawsuits, damaged relationships with employees, or regulatory fines. This is especially true for startups and scale-ups taking on remote employees when your company is growing too fast and needs to figure out how to hire overseas.

As technology companies expand globally, they must manage HR risks carefully. There are several ways to enable overseas employment, with different risk tolerance, benefits, and drawbacks. Each company must decide which approach is best for it. We’ll discuss how to mitigate the risks of a multi-location workforce during global expansion.

3 Options for Multi-location International Employment

Businesses establishing a global presence face the challenge of managing and scaling an employee base with no common borders or language. To successfully expand abroad, companies have several options for enabling hiring in international markets. 

The most commonly used ways are by doing the following: 

1. Establishing an overseas entity
2. Selecting independent contractors to handle tasks remotely.
3. Work with a global EOR (Employer of Record) partner. 

Let’s take a closer look at each of the available options. 

Get Express Quote

Risks and Drawbacks of Setting Up a Foreign Entity

Traditionally, setting up a foreign entity has been the most common approach. It requires a significant upfront investment but can be a good option for companies committed to operating in a country for at least five years. It also works well for companies that plan to employ dozens of workers or acquire physical assets in-country. However, the approval process can take months, and recent global events have led many countries to halt approvals for new foreign entities.

As a stand-alone solution, foreign entities still work well for small companies operating in a single country. But they are becoming less common as companies with global ambitions increasingly look to more agile and faster approaches.

Cultural norms, employee expectations, and economic climates vary widely from country to country. Yet many companies fail to conduct due diligence before establishing a legal entity in a new locale. The result is that they come unprepared for the HR-related challenges that inevitably arise when expanding into global markets. 

Risks and Drawbacks of Working with Independent Contractors

Tech companies always try to find cheaper and easier ways to expand their business. Using independent contractors to launch in a new country is one solution. While it sounds like a simple solution, and these workers provide flexibility and cost savings, there are more than a few legal and compliance risks that companies need to consider before leaping. One of the most significant risks is misclassifying contractors, leading to severe penalties. The company must be careful not to fall into this trap. 

Penalties are harsher than you might think. If contractors working for your business are considered to be permanent employees and are therefore misclassified, labor authorities will consider them to be full-time and backdate payroll taxes onto your business — as well as on the workers themselves. Getting compliant can be difficult — it requires a lot of effort and time, which costs money. It’s better to take a proactive approach by outsourcing to a reliable Global Employer of Record partner.

Benefits of Working with a Global EOR (Employer of Record)

You have a lot on your plate as an entrepreneur and business leader. But, what you probably don’t have time or expertise to manage is your company’s global employment risks. 

From managing multi-location employment and talent risk to mitigating local compliance risk when expanding internationally, outsourcing your global employment management to an Employer of Record Partner can save you time and money while controlling your legal compliance. Why subject yourself to all of the risks and complexities listed below when a global EOR partner can handle them?

Global Expansion: Top 20 Challenges for Startup and Scaleup Founders 

1. Recruitment in international markets
2. Mitigating multi-location employment risks, such as permanent establishment risk, worker misclassification risk, under-taxation, and regulatory non-compliance risk)
3. Establishing a foreign entity requires significant investment in time, money, and long-term commitments.
4. Misclassifying overseas employees as independent contractors could put tech companies at risk of incurring severe foreign penalties.
5. Managing employee immigration and relocation
6. Monitoring country-specific employment laws and regulations
7. Finding the most cost-efficient ways to pay foreign employees
8. Foreign taxation tracking and adherence
9. Labour law regulations monitoring and compliance
10. Complying with foreign regulations
11. Managing different payroll processes in multiple locations
12. Finding expert consultancy in international markets 
13. Communicating long-distance with clients 
14. Lack of government support
15. Need to navigate the risks of finding a reliable local EOR/PEO partner 
16. Dealing with hidden costs and non-transparent pricing models
17. Lack of adherence to information security standards
18. Foreign employment delays and bottlenecks 
19. Lack of full in-country HR support
20. Need to broaden competitive horizons beyond home countries
21. Managing hidden business risks when establishing a presence in multiple countries.

How Global Employer of Record (EOR) Partner Can Solve Major Challenges Founders Face

Startup founders should consider hiring a global EOR Partner since if a business owner isn’t careful with their human resources, they could end up in financial trouble. If you’re not familiar with EOR solutions yet, it’s worth learning how they can help ease some pressures around managing HR risk during global expansion!

The global Employer of Record market size is projected to reach US$ 6604.4 million by 2028, from US$ 4299.1 million in 2021, at a CAGR of 6.8% during 2022-2028.

A comprehensive array of Employer of Record (EOR) services can help manage HR risk in your company’s global expansion journey  – whether a startup, scale-up, or enterprise-grade company. 

The EOR service provider is a legal employer of your international workforce and pays employee taxes, social security, and other benefits on behalf of your company. Additionally, the EOR already has a registered business in the country of interest, meaning your business can expand faster and more flexibly. This can be particularly beneficial when requiring a contingency workforce to meet business demands.

Employer of Record (EOR) services are crucial for your international expansion strategy. Collaborating with an Employer of Record (EOR) partner allows you to manage global employment risk better and reduce the administrative and tax burden that multi-location employment can create. An experienced and reliable EOR partner can help you keep costs low, maximize productivity, and ensure that your international teams are compliant and adequately compensated. 

Typically, this is done by taking over the responsibility of hiring workers from you and paying them directly. Still, an Employer of Record (EOR) partner may also assist with payroll processing, tax withholding, filing, insurance administration, compliance reporting, etc. EOR service providers like Acumen International offer these services to technology businesses looking to expand internationally faster without building out their workforce infrastructure in every location where they operate.

Global Employment Journey — Recruitment. Onboarding. Management. Retention. Termination

A Global Employer of Record ensures labour, tax, and immigration compliance and provides legal guidance at every step of the Global Employment Journey.

1. Recruitment

• Talent skilled in highly-specialized areas
• Executive search
• Contingency workforce

2. Global Mobility

• Employee Work Visa and Work Permit sponsorship
• Dependent Visa
• Visa extension
• Application for a sponsor license for a foreign national
• Relocation assistance

3. Checks

• Health checks
• Criminal record checks
• Background checks
• Education checks

4. Onboarding

• Employment Agreement drafting
• Compliant worker onboarding on your behalf
• Account setup in the payroll and HR system​
• Employee data entry and records maintenance
• Managing probation periods

5. Payroll Administration

• In-country registration with statutory bodies
• Day-to-day payroll management
• Monthly pay slips or other pay frequency
• Accruals
• Allowances
• 13th and 14th salary

6. Working Time & PTO Processing

• Working hours
• Overtime
• Public holidays
• Annual leave
• Parental leave
• Sick leave
• Additional leave

7. Benefits Administration

• Mandatory Benefits
• Health insurance
• Workers’ compensation
• Unemployment insurance
• Voluntary Benefits
• Share plans for executives
• Bonuses & Equipment provision
• Expenses reimbursement & business trip processing
• Health insurance, dental treatment

8. Tax Administration & Reporting

• Tax Reporting
• Employer taxes & contributions
• Withholding tax
• Local tax payments and reporting to local authorities
• End of financial year reporting

Offboarding

• Employment agreement termination:
• Dismissal – by the employer
• Resignation – by the employee
• Termination by mutual agreement
• Notice period handling
• Final settlement & severance payments
• De-registration with statutory bodies

Get Express Quote

Quick and Easy Foreign Market Entry with a Global Employer of Record Services

1. Immigration Services to Support Global Employment via Global EOR Model

Employing international talent can be a real hassle. You have to figure out what immigration documents you need to hire them, which documents the local governments require from you, and how exactly you will fund hiring your international talent. A Global Employer of Record (EOR) is a third-party entity that can help you manage any of those headaches, including:

• Immigration requirements
• Visa applications
• Extensions of stay
• Work permit sponsorships
• Local labour law compliance.

2. Streamlined Onboarding, Benefit & Payroll Management with a Global Employer of Record

As your company grows, it can be helpful to streamline the process of onboarding new employees. An Employer of Record can help you minimize costs and increase efficiency by creating an easy, streamlined process for new international hires and HR staff. You’ll avoid losing valuable time and money searching for information or documents that could have been collected earlier.

Benefits packages are another area where streamlining the process can be helpful. Benefits are often complex (especially those mandatory employee benefits you must provide in certain countries). Therefore, your EOR partner can make it easy for employees to understand what benefits they are entitled to and avoid having employees feel confused about their benefits.

Finally, payroll management also needs careful attention when expanding globally. There are various laws worldwide concerning how much tax an employee owes on income earned overseas (this is known as “double taxation”). Streamlining this process with your EOR partner means making sure all payroll records are up-to-date, so there aren’t any errors when calculating taxes owed by employees who work abroad, which could result in penalties being applied.

3. In-country Labor and Tax Law Compliance

As you expand your business globally, it is essential to understand each country’s local labor laws and regulations. You must comply with these laws, affecting your employees’ working conditions and rights. If you do not meet these standards, you will be at risk of fines from various government agencies. In addition, if an adverse situation occurs with one or more of your employees due to this breach in compliance, it could have repercussions for your company’s reputation worldwide. 

To avoid this fate, founders and company leaders in charge of international operations need to understand the various compliance requirements that come into play during global expansion. The good news is that Acumen International, your Global EOR partner, can help you navigate them across 190 countries.

When setting up an international operation, it is important to consult legal counsel or a Global Employer or Record who has experience dealing with these issues so that you do not run afoul of the law by inadvertently violating any employment.

Compliance with labour laws and tax regulations can be complex because they are often inconsistent from country to country, state to state, or city. As a result of these inconsistencies, employers must ensure that their global human resource policies are consistent with local laws wherever their employees or independent contractors work.

When it comes to taxes, there is no universal agreement on how they should be calculated or collected. In many countries worldwide, income taxes are deducted from employees’ paychecks before they receive them. This is known as the “withholding” tax. In some countries, employers are responsible for collecting withholding tax directly from their employees and submitting it to the government along with their tax filings. Many countries also have strict rules about when employment-related taxes must be paid and what forms must be filed.

In some cases, these requirements change depending on which country the employee is working in.

Multinational employers should know the tax implications of hiring foreign workers in different countries. Some cases may withhold taxes on employee salaries and bonuses that must be paid to foreign governments. Employers must regularly send this withholding amount to the appropriate state tax authority annually. The employer may also pay income tax on these funds locally or in another country. In addition, many countries impose social security taxes on employees, which can result in double taxation if not properly managed. Employers should consult with their accountants or seek to the advice of a Global Employer of Record partner to learn how to address these issues.

4. Employee Benefit and Insurance Administration

As you expand your business from one country to another, you’ll want to ensure your employees are cared for. You won’t be able to manage everything by yourself, so you need an Employer of Record (EOR) partner to help with employee benefits management.

Your EOR Partner  partner should be able to assist with the following:

Health Insurance

Health insurance is crucial in international expansion because it helps ensure employee retention and reduces absenteeism.

Life Insurance 

This type of insurance provides financial protection for the family of a deceased employee. It can also provide financial support when someone is disabled by illness or injury.

Disability Insurance

Disability coverage pays out benefits when an employee becomes disabled due to an injury sustained while working at their job site (or while travelling on business). This coverage helps protect against lost income if an employee cannot work due to an illness or accident that prevents them from performing their duties as usual at work — even if they’re still employed with the company!

5. Handling Employment Contracts, Terminations, and Compensations

There are many benefits to outsourcing your company’s foreign employment management, payroll processing, and other HR-related activities to an Employer of Record. When you entrust these core responsibilities to a professional EOR, you can expect more remarkable accuracy and precision in these crucial areas of your business. Meanwhile, your in-house team can focus on other aspects of the business. Acumen International Global EOR can help you navigate those details.

Employee Contracts

While you may have a standardized employee contract, it’s essential to understand what steps should be taken when hiring abroad. Are there special employment laws? What about holiday pay or sick leave requirements? Acumen International Global EOR can help navigate those details.

Employee Terminations

If an employee is terminated from their position with your organization abroad, it could lead to legal complications. It’s crucial for both parties involved to fully understand how these situations are handled under local laws so they can avoid issues down the road.

Compensation Programs 

Companies’ compensation programs vary depending on where they operate — including compensation benefits such as health insurance plans and retirement contributions (if any). Some countries don’t require employers to provide these benefits at all! Be sure everyone knows what options exist before deciding what kind of compensation programs should be offered while expanding internationally.

Benefits of Global Employer of Record: What Acumen International Can Bring to the Table

The benefits of Global Employer of Record are the following:

• No need to set up a new entity in every country where you have operations. You are not required to hire local employees or worry about local compliance requirements.
• The ability to scale your business quickly by hiring employees in multiple countries without setting up a new entity in each country.
• A single point of contact for all employment-related questions and concerns.
• A single point of contact for all tax compliance questions and concerns.
• No need to worry about managing multiple payroll systems, tax filing requirements, or employee benefits programs across multiple countries since everything is handled by Acumen Global Employer of Record (EOR).

Headquartered in London, UK, Acumen International, a Global Employer of Record (EOR) and Professional Employer Organization (PEO) service provider, was founded in 2001. The company gives mid-sized and enterprise companies the power and flexibility to grow internationally with streamlined and simplified global labour expansion. 

Acumen International helps solve the frustrations faced by founders and leaders of technology companies looking to expand globally quickly but cannot or do not want to take on the liability, costs,  burden of direct employer status, or other risks associated with operating in individual countries. International employers can also use our global resources to test a new market quickly before establishing a local legal entity. 

Comprehensive Employer of Record (EOR) Packages and Budget-friendly Rates

With affordable packages and budget-friendly rates, Acumen International can offer secure, efficient global HR services to manage Global Payroll, HR & Benefits Administrations for businesses that need international talent but don’t have the resources or skills to handle it themselves.

Our full-service management solutions — from legal talent employment to benefits management, from compliance to payroll and taxation — are tailored to each client’s needs. 

Acumen International’s unique and integrated approach allows us to offer a comprehensive array of EOR functions, including:

1. Processing business immigration requirements
2. Visa applications & extensions
3. Work permit sponsorships 
4. Streamline onboarding, benefits, payroll, PTO
5. Local labour and employment tax law compliance
6. Audit-proof compliance requirements
7. Employee benefit management
8. Handling employment contracts, terminations, and compensation
9. Processing medical insurance and benefits
10. Payroll, including year-end tax statements 
11. Relocation services & housing  
12. Benefit management 
13. Special needs or requirements  
14. Multi-country employment without limitations 
15. Handling contract workers and foreign workforce management
16. Compliant employment or termination within 72 hours.

Let Acumen Global EOR Streamline Your Global Expansion 

As you can see, Global EOR is an option for business owners who want to expand their operations internationally. It’s a revolutionary way to internationalize your business without setting up a new entity, hiring local employees in each country where you have operations, or worrying about the legal and regulatory complexities of operating in multiple jurisdictions.

Acumen Global EOR can help you by removing some of the burdens of your busy schedule and the risks involved. Rest easy knowing that everything is taken care of. Global hiring is no longer a hassle! With Acumen Global Employer of Record, you can employ, manage, and pay your employees in over 190 countries. No entity is needed. Start international operations with no delay.

To learn more about how Global Employer of Record can help your organization grow into new markets, contact Acumen International today to discuss how we can help you achieve your goals.

Get Express Quote

Welcome to the Employee Benefits Guide for Global Employers operating across multiple jurisdictions, presented by Express Global Employment, your trusted global employer of Record.

Many businesses operate across borders today, managing a diverse workforce and navigating complex regulatory landscapes. As CEOs, HR Directors, Finance Leaders, and global employers, you understand the importance of attracting and retaining top talent while complying with varying labour laws worldwide.

We present this comprehensive Employee Benefits Guide, offering expert guidance on global employee benefits provisioning best practices.

Inside our Employee Benefits Guide 2024, we delve into the critical aspects of benefits provisioning, from mandatory benefits that ensure compliance with local labour laws to the strategic selection of voluntary benefits that elevate your organisation to an employer of choice worldwide. We provide expertise and clarity, helping you make informed decisions that align with your company’s vision, values, and budget.

What Are Employee Benefits?

Employee benefits, or perks or fringe benefits, are various forms of non-wage compensation provided to employees in addition to their regular salaries or wages.

These benefits are designed to enhance the overall compensation package, improve employee satisfaction, and contribute to their well-being. They can include a range of financial, health, and lifestyle advantages that support employees both in their professional and personal lives.

Employee benefits are far more than just contractual obligations – they are the heart and soul of a thriving workforce. A carefully designed benefits package can transcend borders, resonate with employees of different cultures, and contribute to a more engaged and motivated team. It is a key factor in creating an inclusive and supportive work environment where employees feel valued and empowered.

Types of Employee Benefits

Employee benefits are various types of non-wage compensation provided to employees in addition to their normal salaries or wages. These benefits are designed to attract and retain employees, boost morale, and enhance overall job satisfaction. Here are some common types of employee benefits:

1. Health Insurance: Covers medical expenses for employees, including doctor’s visits, hospital stays, and surgeries. Often includes dental and vision coverage as well.
2. Retirement Plans: Includes pension schemes, 401(k) plans, or other retirement savings programmes that help employees save for their future.
3. Paid Time Off (PTO): Includes holidays, sick leave, vacation days, and sometimes personal days that employees can use as they see fit.
4. Life Insurance: Provides a financial benefit to an employee’s family or designated beneficiary in the event of the employee’s death.
5. Disability Insurance: Offers income protection to employees who cannot work due to illness or injury.
6. Employee Assistance Programs (EAPs): Provide confidential support for personal issues, including mental health services, counselling, and financial advice.
7. Flexible Working Arrangements: Options such as telecommuting, flexible working hours, and job sharing to help employees balance their work and personal lives.
8. Professional Development: Includes training programmes, tuition reimbursement, and career advancement and skills development opportunities.
9. Wellness Programs: Initiatives aimed at promoting healthy lifestyles, such as gym memberships, health screenings, and wellness challenges.
10. Childcare Assistance: Subsidies or on-site childcare facilities to support employees with young children.
11. Transportation Benefits: Includes company cars, commuting subsidies, or access to public transport passes.
12. Bonuses and Incentives: Financial rewards based on performance, company profitability, or meeting certain targets.
13. Stock Options: Opportunities for employees to buy company shares at a discounted rate, aligning their interests with those of the company.

These benefits can vary widely depending on the employer, industry, and country. Employers often offer a combination of these benefits to create a comprehensive compensation package that meets the needs of their workforce.

Mandatory Employee Benefits: Harnessing Global Employment Compliance

Understanding and providing mandatory benefits is an essential responsibility for employers in global employment. As businesses expand their operations across borders, they encounter a complex tapestry of social security, healthcare, disability, and retirement systems that vary from country to country.

This section of the Employee Benefits Guide for Global Employers illuminates the significance of these mandatory benefits for employers and their valued employees while embracing diversity and inclusion.

Diversity and inclusion are not only moral imperatives but also strategic advantages. Employers foster a sense of belonging by offering inclusive mandatory benefits and creating a fair and respectful workplace. This section explores how optimizing global benefits provision through diversity and inclusion benefits employers and employees.

Mandatory Benefit	Employers’ Obligations	Benefits for Employees
Social Security	Fulfil legal requirements by contributing to social security schemes.	Financial protection during illness, disability, and retirement. Increased job satisfaction and loyalty.
Healthcare	Provide access to healthcare benefits, promoting a healthier and more productive workforce.	Peace of mind, improved work-life balance, and overall well-being.
Disability Benefits	Offer disability coverage, supporting employees during difficult times.	Essential income protection during unexpected disabilities. Financial security during recovery and rehabilitation.
Retirement Plans	Provide retirement plans to ensure long-term employee welfare.	Enables employees to plan for a secure financial future during retirement.
Leaves and PTO	Offer various leave types such as vacation, sick, bereavement, parental, military, jury duty leave, etc.	Supports work-life balance, time to rejuvenate, and attend to personal matters.
Severance Payment	Provide severance payment to employees upon termination under certain circumstances.	Financial support during job loss and transition periods.
Notice Periods	Comply with legal notice periods for termination or resignation.	Allows time for both parties to prepare for changes and seek new opportunities.
Other Statutory Benefits	Adhere to specific statutory benefits mandated by local laws and regulations.	Compliance with local labour laws, promoting fairness and employee rights.

It is important to note that mandatory benefits can indeed vary significantly based on a country’s economic development, labour laws, and cultural norms. As global employers, understanding and adhering to these diverse regulations ensures compliance and fosters a positive work environment for employees across borders.

Voluntary (Optional) Employee Benefits

Having explored the vital role of mandatory benefits in ensuring the well-being and security of your global workforce, we now delve into the world of voluntary employee benefits. These offerings extend beyond legal obligations, empowering you to design a benefits package that resonates with the unique needs of your diverse employees.

At Acumen International, we go beyond legal obligations, empowering you to craft a truly exceptional benefits package tailored to your diverse employees’ unique needs.

From innovative healthcare solutions and wellness programs to professional development initiatives, this section presents an array of opportunities to enhance employee health, productivity, and personal growth.

We aim to provide valuable insights and practical guidance, enabling you to create a benefits program that attracts and retains top talent and reflects your organizational values. Offering voluntary benefits is a powerful way to demonstrate your commitment to your employees’ holistic well-being and professional success.

Voluntary Benefit	Employers’ Incentives	Advantages for Employees
Retirement Savings Plans	Attract and retain top talent by offering an appealing retirement savings plan.	Opportunities to build a secure financial future, fostering peace of mind and financial independence.
Health and Wellness Programs	Enhance employee health and productivity by providing wellness initiatives.	Improved physical and mental well-being, reduced healthcare costs, and a positive work-life balance.
Employee Assistance Programs (EAPs)	Support employees during challenging times by offering counselling and resources.	Access to confidential counselling, guidance, and support, promoting overall emotional well-being.
Professional Development	Invest in employee growth and skill development through training programs.	Enhanced job satisfaction, career advancement opportunities, and increased loyalty to the organization.
Flexible Work Arrangements	Promote work-life balance and accommodate diverse employee needs.	Increased job satisfaction, reduced stress, and improved productivity through customized work schedules.
Childcare Assistance	Assist employees with childcare expenses to alleviate work-life challenges.	Reduced financial burden, enhanced focus at work, and a supportive environment for working parents.
Commuter Benefits	Offer cost-effective commuting options, such as public transport subsidies.	Savings on transportation expenses and reduced environmental impact, promoting employee well-being.
Employee Discounts	Collaborate with vendors to provide exclusive discounts and perks to employees.	Enhanced employee morale, increased job satisfaction, and a sense of value and appreciation.

Importance of Employee Benefits

Employee benefits play a crucial role in:

• Attracting and Retaining Talent: Competitive benefits packages can make a company more attractive to potential hires.
• Enhancing Job Satisfaction: Benefits contribute to employees’ overall well-being and job satisfaction.
• Improving Productivity: Health and wellness programs can lead to healthier, more productive employees.
• Boosting Morale: Benefits like flexible working arrangements can improve work-life balance and morale.

Employee Benefits Solution by Express Global Employment

1. Tailored Employment Solutions, Global Impact: Our benefits packages are crafted to meet local needs while adhering to global standards, ensuring employees feel valued and supported worldwide by a Global Employer of Record.
2. Compliance and Consistency: We navigate complex employment laws, ensuring benefits offerings comply with local regulations and safeguarding your organization and employees.
3. Employee-Centric Focus: We embrace diversity and offer a range of voluntary benefits, empowering employees with choices that foster engagement and loyalty.
4. Seamless Experience, Everywhere: Benefit from streamlined processes that provide employees with a seamless experience, regardless of location.
5. Strategic Partnerships: Access cost-effective, top-tier benefits solutions through our network of renowned vendors and stay ahead of industry trends.
6. Empowering Global Employers: Receive expert insights and best practices to make informed decisions with our comprehensive handbook and personalized guidance.
7. Agility and Adaptability: We proactively navigate market shifts and regulatory changes, enhancing the employee experience in an ever-evolving global landscape.
8. Seamless Onboarding and Offboarding: Prioritise a positive employee journey with clear guidance and support throughout their employment lifecycle.

Introducing the Global Payroll Calculator (GPC)

Harness the power of seamless global talent acquisition with our innovative Global Payroll Calculator (GPC), designed to provide instant and actionable insights into global payroll budgeting and the best hiring locations worldwide.

With GPC, you can effortlessly handle complex payroll calculations, budgeting, and talent insights across borders, saving valuable time and resources. Say goodbye to manual Tax and Labour Code research and welcome automated, accurate, real-time payroll estimations.

Benefits of Global Payroll Calculator

Global Talent Cost Insights: Navigate the complexities of cross-border hiring cost projections easily. Identify the ideal locations for talent without the tedious task of manual tax and labour code research.

Detailed Employment Cost Analysis: This tool provides a comprehensive breakdown of gross-to-net calculations, helping you understand employment costs across 190 countries at a glance.

Full Tax Breakdown: Get a comprehensive view of taxes, including social contributions, income tax, and more, for better financial planning.

No more sifting through constantly evolving labour laws. GPC keeps you updated with real-time regulations and a detailed breakdown of taxes and contributions across 190 countries.

1. Expertise-Infused Tool: Built upon our vast industry knowledge of Express Global Employment, ensuring accuracy and efficiency.
2. Practical Talent Insights: Quickly gauge cost projections and identify hiring potentials across 190 countries without the hassle.
3. Total Tax and Contributions Breakdown: Get a comprehensive view of taxes, including social contributions, income tax, and more, for better financial planning.
4. Efficient Payroll Estimation: Move from manual tax and labour research to automated, real-time calculations.
5. Cross-country Comparison: Instantly compare employment costs across multiple countries to identify cost-effective talent hotspots.
6. Transparent Cost Breakdown: Get a thorough tax perspective instantly from gross-to-net calculations upfront.
7. In-built Compliance: Navigate through evolving labour laws and tax regulations with up-to-date, reliable data across 190 countries.

Experience the practicality and ease of managing global payroll and talent acquisition with GPC. We’re confident it will significantly enhance your operational efficiency and decision-making process.

Start Free Trial

How to Design an Employee Benefits Program

Designing an effective employee benefits program involves several key steps to ensure it meets the needs of employees and aligns with the company’s goals and budget. Here’s a comprehensive guide to designing an employee benefits program:

1. Assess Company Needs and Goals

• Understand the Budget: Determine how much the company can afford to spend on benefits.
• Identify Company Goals: Align the benefits program with the company’s objectives, such as attracting top talent, improving employee retention, or enhancing productivity.

2. Understand Employee Needs

• Conduct Surveys: Use surveys, focus groups, or one-on-one interviews to gather input from employees on what benefits they value most.
• Analyse Demographics: Consider the demographics of your workforce, such as age, family status, and health needs, to tailor the benefits accordingly.

3. Research Legal Requirements

• Comply with Regulations: Ensure the benefits program complies with local, state, and federal laws regarding mandatory benefits like health insurance, retirement plans, and paid leave.
• Stay Updated: Regularly review changes in legislation to keep the benefits program compliant.

4. Choose the Types of Benefits

• Mandatory Benefits: Include legally required employee benefits like social security contributions, workers’ compensation, and statutory sick pay.
• Voluntary Benefits: Choose additional benefits that can attract and retain employees, such as:
  • Health Insurance
  • Retirement Plans
  • Paid Time Off (PTO)
  • Life and Disability Insurance
  • Wellness Programs
  • Professional Development Opportunities
  • Flexible Working Arrangements
  • Childcare Assistance
  • Transportation Benefits

5. Design the Benefits Package

• Flexibility and Choice: Consider offering a flexible benefits package (cafeteria plan) where employees can choose the benefits that best meet their needs.
• Competitive Analysis: Compare your benefits package with those of competitors to ensure it is competitive within your industry.

6. Communicate the Benefits

• Clear Communication: Develop clear, easy-to-understand materials explaining the benefits package.
• Regular Updates: Keep employees informed about any changes to the benefits program.
• Open Enrollment Periods: Hold regular enrollment periods where employees can sign up for or make changes to their benefits.

7. Implement and Administer the Program

• Choose Providers: Select reputable benefits providers for health insurance, retirement plans, and other services.
• Administrative Tools: Use benefits administration software to manage enrollment, track usage, and handle compliance.
• Support System: Provide resources and support for employees to understand and use their benefits, such as an HR help desk or online portal.

8. Monitor and Evaluate

• Track Participation and Usage: Monitor how employees are using the benefits and their satisfaction levels.
• Gather Feedback: Continuously collect feedback from employees to identify areas for improvement.
• Adjust as Needed: Regularly review and adjust the benefits program to ensure it remains relevant, competitive, and cost-effective.

9. Promote Wellness and Engagement

• Wellness Initiatives: Promote wellness programs encouraging healthy lifestyles, such as fitness challenges, health screenings, and mental health support.
• Engagement Activities: Organise activities and events that promote a positive work culture and enhance employee engagement.

10. Review and Update

• Annual Reviews: Conduct an annual review of the benefits program to assess its effectiveness and make necessary adjustments.
• Benchmarking: Regularly benchmark your benefits program against industry standards to ensure it remains competitive.

Ukraine remains resolute and determined despite facing severe adversities due russia’s aggressive actions. From the deliberate bombing of civilians in cities, towns, seaports, and even atomic power plants to the catastrophic decimation of cities like Mariupol, the scale of devastation is heart-wrenching. The malevolence didn’t stop in cities; hundreds of towns and villages also bore the aggression’s brunt. In a harrowing incident, the Kakhovka Dam, under the control of the russian military since their invasion, was breached in June 2023. 

This widespread destruction has forced over 8 million Ukrainians – women, children, and the elderly – to seek refuge in safer areas, leaving behind their homes and the life they once knew. 

This population exodus disrupted individual lives and has led many companies to see their core talents scattered, jeopardising critical operations and projects and putting Ukraine’s entire national economy at grave risk. People are irreplaceable as the very lifeblood of business and the economy. Their displacement has left a void that has threatened both the business continuity of individual companies and the nation’s broader economic framework.

Many companies, witnessing their key talents flee to safer regions, grappled with the looming danger of stalling critical operations and projects. However, amid these trying times, Express Global Employment’s unique third-party cross-border employment (Global Employer of Record) model emerged as a pivotal solution to navigate these challenging waters.

Redefining Business Continuity: Ukraine’s Response to Global Workforce Challenges

The resilience of Ukrainians was recently celebrated at the “TOP 100 USA Entrepreneurs with Ukrainian origins” Award ceremony in New York, USA. This event highlighted the unwavering spirit and significant contributions of Ukrainian entrepreneurs to the global business landscape. Among the honorees, Nick Ganzha, the founder and CEO of Express Global Employment, received special attention for his entrepreneurial success and timely and critical support to the Ukrainian business community.

The recognition of Express Global Employment speaks volumes. Beyond our business milestones, it emphasizes our unique role as the sole global employment solutions provider addressing the Ukrainian workforce displacement crisis.

Express Global Employment also recognised the significance of the “TOP 100 USA Entrepreneurs with Ukrainian origins” event in New York, USA. It provided us a platform to raise awareness about Ukraine’s global employment challenges and illustrate our company’s commitment to aiding Ukraine and its people.

Our services empower Ukrainian businesses to integrate their dispersed talent abroad seamlessly and cost-effectively. With the unpredictable movement of valuable talent to various global destinations, this approach is essential for maintaining uninterrupted business operations.

Navigating the Global Employment Landscape: The EOR Advantage

Given the tragic aftermath of russia’s relentless aggression against Ukraine, it’s more vital than ever to have nimble and quick-acting business strategies in place. The Global Employer of Record (EOR) model is a beacon of hope in a rapidly shifting employment landscape. Far from being a mere industry catchphrase, the Global EOR model presents a transformative approach to addressing massive workforce displacement in Ukraine. It allows companies to hire, compensate, and retain their key talent in foreign territories without the complexity and bureaucracy of establishing a foreign legal entity. It’s more than just a convenience; it’s a pivotal tool for ensuring business resilience and continuity amid geopolitical upheavals.

Express Global Employment is a shining example of the effectiveness of this model. With a strong presence in 190 countries, we’ve stepped up since the very outset of the war in Ukraine. By assisting national and multinational businesses, we’ve ensured the retention of irreplaceable talents and saved jobs for displaced individuals, especially women with children. Our efforts have ensured that crucial projects continue without interruption, highlighting the resilience and adaptability of the Ukrainian spirit in the face of adversity.

Express Global Employment: A Commitment to Serve Ukraine and its People

Rooted in Ukraine and globally active for decades, Express Global Employment remains committed to offering vital solutions for businesses during these challenging times. With Nick Ganzha at the helm, the company’s primary focus has always been to serve — whether addressing clients’ immediate needs or responding to the broader challenges that the current situation in Ukraine presents.

Nick Ganzha’s dedication to Ukraine goes beyond business. Actively supporting Ukraine in its fight against full-scale russian aggression, Nick’s profound patriotism and love for his homeland have translated into substantial donations. Having already contributed over $200,000 to support Ukraine’s cause, Nick commits to continuing these donations until Victory is achieved. 

Nick Ganzha, the founder of Express Global Employment, shared these profound words.

Express Global Employment originated in Ukraine, driven by a clear vision. I envisioned the ecosystem where businesses irrespective of their size or financial backing could seamlessly tap into any global market. Where geographical boundaries would not restrict the quest for the best talent, because now the entire world is your talent pool. To me success isn’t defined by the profit margins or market dominance.

It is about the aspirations we bring to life and the lasting impact we create. Each day, helping Ukrainian and international  entrepreneurs join the global business landscape, I see I’m living my dream. Now as millions of Ukrainians and all the people of the free world unite in the spirit and purpose, we inch closer to our most profound collective dream —Ukraine achieves Victory, standing tall and free, forever! 

We Wish We Knew!’ – The Power of the Third-Party Employment Approach in Trying Times

As millions of Ukrainians sought safety away from home, critical employees of our client – a prominent enterprise company- were displaced. The loss was felt deeply in numbers and years of irreplaceable expertise and intricate industry knowledge.

To compound the crisis, the company faced many challenges: the fluctuating demand for their products, interruptions in sourcing raw materials, and disrupted production and logistics chains. These adversities necessitated an agile rethinking of strategies. Realising the risk of depending heavily on a singular market, the management wisely chose diversification, eyeing opportunities in neighbouring countries.

Our engagement with a leading Ukrainian enterprise epitomises this insight. They found themselves in a unique predicament: some of the company’s key employees, integral to its core operations, had fled to various countries—Spain, Portugal, Slovakia, Poland, and Austria. These individuals were invaluable to our client enterprise, and their sudden absence posed a considerable challenge and potential disruptions.

The dilemma was about more than just replacing talent. It was about swiftly and compliantly re-employing these pivotal team members in their new locations without the bureaucratic and financial complexities of establishing multiple foreign legal entities. This is where Express Global Employment’s extensive expertise, global coverage, infrastructure, and agility of the Global Employer of Record model came into play.

Re-Employing Key Talent Across Europe

We acted promptly and with precision. In Spain, we streamlined the re-employment of one of their client’s key personnel. We meticulously handled every step of the process, from crafting the employment contract to ensuring comprehensive travel and benefit provisions. And, to our mutual satisfaction, the whole engagement was wrapped up in just a few days.

The momentum was sustained. Shortly after that, we onboarded another key team member in Portugal. Moreover, beyond aiding their expansion into new territories, we also played a crucial role in retaining the talents who had left Ukraine. This was particularly evident as we collaborated on retaining a vital team member in Slovakia. Within a month, we concluded another project in Poland, and currently, there’s keen interest in employing talent in Austria.

The tangible outcomes spoke volumes: our enterprise-grade client marked their presence in two new markets in just two weeks. Moreover, our intervention ensured the retention and productive engagement of the employes the company risked losing.

Hiring Globally: A Paradigm Shift for Ukrainian Enterprises

But beyond this particular success story, a broader realisation dawned upon us. Our approach was revolutionary for many Ukrainian companies accustomed to the conventional foreign entity establishment model.

The exclamation from our client’s HR director—”We wish we had known about it earlier!”—underscored this sentiment. Recognising this, we are now driven with an added purpose: to evangelise and popularise the third-party global employment model amongst a broader spectrum of Ukrainian business owners and the C-suite, ensuring they grasp its transformative potential.

Empowering Ukraine’s Future Through Adaptive Strategies

Ukrainian businesses have shown great resilience in these challenging times. Looking forward, mere persistence isn’t enough. Innovative strategies like the third-party global employment model are key to a fast-changing global scene.

By embracing such models, Ukrainian businesses can overcome geographic limitations, maintain their treasured workforce, and venture confidently into new territories. As Ukraine moves towards Victory over russian aggression, it isn’t just about reclaiming national stability but ensuring its businesses remain intricately woven into the fabric of the global economy with its remote work paradigm.

The message for Ukrainian entrepreneurs and businesses is resounding: change is inevitable. Yet, with smart strategies and partnerships, challenges become opportunities for growth. With innovation and Ukraine’s enduring spirit, our nation will thrive on both the domestic and global fronts.

Further Reading: Boundless Hiring: Nick Ganzha’s Vision for Global Employment

Worker misclassification is the practice of companies inappropriately classifying workers as independent contractors rather than employees to avoid costs and administrative burdens associated with the latter. Companies do this to save money on things like benefits, payroll taxes, and unemployment insurance.

Worker misclassification refers to an employment situation in which either an employer or an employee intentionally misrepresents the true nature of their working relationship.

Independent Contractors vs Full-Time Employees: How to Distinguish between Them

The distinction between independent contractors and full-time employees is important because it affects issues such as tax obligations, benefits, and labor laws. Here are some factors that can help distinguish between the two:

1. Control over Work

Does the company have the right to direct how, when, and where the worker does his or her job?

If the worker is free from control and direction in carrying out the duties under the contract and in practice, then the worker is likely an independent contractor.

At the same time, full-time employees typically have more control and are subject to the direction and control of their employer.

2. Skill Level

How much training was required for a position?  – The more training a company requires its employees to have, the less likely that company is going to hire an independent contractor.

The skill level of an independent contractor is often directly related to the type of work they do, in that there’s a certain expectation that they have a more specialized level of expertise than a full-time employee.

An independent contractor is hired with their specialized skills in mind, while a full-time employee is generally hired to perform a specific job function within your company.

3. Financial Control & Tax Obligations

Are the business aspects of a worker’s job controlled by an employer or are they in control of their own finances?

Tax obligations are one of the major differences between independent contractors and full-time employees. Independent contractors are responsible for paying their own taxes, while employers are required to withhold taxes from the pay of full-time employees.

4. Benefits

Full-time employees are often eligible for benefits such as health insurance, retirement plans, and paid time off,

When an employee is misclassified, that person may not have access to various benefits, such as health insurance and pension plans. Independent contractors are typically responsible for their own benefits and social security.

5. Duration of Work

Full-time employees are typically hired for a longer period of time, while independent contractors are often hired for specific projects or short-term work.

6. Type of Relationship

Is there a written contract or agreement that outlines what will be done and how much will be paid?

When you treat someone as an independent contractor, they are not part of your company’s payroll. Rather, they operate as freelancers paid for their services—no matter how many hours they log in an average week. Independent contractors are often hired for specific projects or jobs that will end at some point and are not an ongoing source of work. In general, if a person does other work besides what you bring them in for (such as taking additional jobs from other employers or working independently), she’s more likely to be considered an independent contractor than a full-time employee.

Visual Comparison of Independent Contractors and Employees: Understanding the Key Differences and Factors to Consider

The chart below represents a comparison between an independent contractor and an employee regarding various factors.

Several factors differentiate independent contractors from employees. These include factors such as tax responsibilities, control over work, flexibility, benefits, and job security. The chart highlights that while independent contractors have more flexibility and control over their work, they do not receive the same level of benefits and job or social security as employees.

11 Practical Steps for Properly Classifying Workers

Employers should carefully evaluate each of these factors when classifying their workers. It’s important to note that misclassifying workers can result in legal and financial consequences for the employer, including fines, back pay, and penalties.

or C-level executives of businesses operating internationally, it is crucial to be aware of the differences in worker classification and the potential implications on your business. With the increasing number of cross-border workers and remote work arrangements, navigating international labor laws and regulations can be challenging. Misclassifying workers as independent contractors or employees can result in costly legal and tax consequences, including fines, penalties, and back taxes owed.

To avoid these risks, it is recommended that C-level executives consult with legal and tax professionals who specialize in international labor law. These professionals can guide compliance requirements and help ensure your business adheres to local laws and regulations.

In addition, it is important to regularly review and update worker classifications as job responsibilities, reporting structures, and other factors may change over time. This can help mitigate risks and ensure that your business is operating in compliance with relevant laws and regulations.

Here are some practical steps that employers can take to ensure they are properly classifying their workers. By taking these steps, employers can ensure that they properly classify their workers and avoid potential legal and financial consequences.

1. Understand the difference between employees and independent contractors: The first step is to understand the legal and tax differences between employees and independent contractors. E
2. Review job descriptions and employment agreements to accurately reflect the worker’s status as independent contractors or employees.
3. Review the worker’s responsibilities, work schedule, and the level of control the employer has over their work.
4. Develop clear and consistent policies: Develop clear policies and guidelines for employee classification and apply them consistently across the organization. Ensure that all workers understand their classification and the expectations associated with their role.
5. Consult with legal or tax professionals to ensure local laws and regulations compliance.
6. Regularly review and update worker classifications as necessary, as job responsibilities and other factors may change over time.
7. Use a worker classification tool. Various worker classification tools are available, including the IRS’s “Independent Contractor or Employee” questionnaire. These tools can help determine whether a worker should be classified as an employee or an independent contractor.
8. Review contracts and agreements with independent contractors to ensure they are properly classified and their contracts reflect their status.
9. Provide training for managers and supervisors on worker classification and the importance of proper classification. This can help prevent misclassification from occurring in the first place.
10. Keep accurate records: Keep accurate records of all workers, including their classification, hours worked, and payments made. This will help you demonstrate compliance in the event of an audit or legal dispute.
11. Seek legal guidance. If you are unsure how to classify a worker, seek legal guidance from an experienced employment attorney. They can help you navigate the complex legal and regulatory landscape and minimize the risk of misclassification.

By following these tips and best practices, you can minimize the risk of worker misclassification and ensure that your organization is in compliance with all relevant laws and regulations.

Get Express Quote

What Are the Laws that Determine or Regulate Employee Misclassification?

If you use a temporary service to fill your staffing gaps, avoiding worker misclassification is critical. This means that you must ensure that you are properly classifying the workers you’ve hired and that you’re meeting all of your legal obligations with regard to payroll tax withholding, workers’ compensation insurance coverage, and other factors.

Worker classification laws and regulations vary across different countries, and it’s important for employers operating globally to be aware of the laws and regulations that apply to their particular jurisdiction. Here are some examples of laws and regulations related to worker classification in other countries:

Canada

In Canada, worker classification is determined by the Canada Revenue Agency (CRA). The CRA looks at factors such as control over the worker, ownership of tools and equipment, and the worker’s chance of profit or risk of loss. Misclassifying a worker can result in significant financial penalties in Canada.

United Kingdom

In the UK, worker classification is determined by employment law and tax law. The key factor in determining worker status is the employer’s level of control over the worker. Other factors include the degree of integration into the employer’s business, the worker’s ability to substitute someone else for doing the work, and the financial risk the worker bears. Misclassifying a worker can result in financial penalties and legal action.

Here are some links to relevant laws and regulations in the UK regarding worker classification:

1. Employment Rights Act 1996 sets out the legal definitions of UK employees, workers, and self-employed individuals. It also outlines the rights and protections afforded to each category of worker.
2. IR35 Legislation: This legislation applies to workers who provide services through an intermediary, such as a limited or personal service company. It is designed to prevent tax avoidance by workers who should be classified as employees for tax purposes.
3. The National Minimum Wage Regulations: These regulations set out the minimum wage rates employers must pay to workers in the UK based on their age and employment status.
4. The Employment Equality (Age) Regulations 2006: These regulations prohibit age discrimination in employment, including recruitment, promotion, and dismissal.
5. The Working Time Regulations 1998: These regulations set out the maximum number of hours workers can work per week, rest breaks, and annual leave entitlements.

It’s worth noting that this list is not exhaustive, and other laws and regulations may be relevant to worker classification in specific industries or sectors.

Australia

In Australia, worker classification is determined by the Fair Work Act. The Act distinguishes between employees, independent contractors, and “sham” contractors who are classified as independent contractors but are actually employees. Misclassifying a worker can result in legal action and financial penalties.

1. Fair Work Act 2009 is Australia’s main legislation governing employment and workplace relations. It sets out the rights and responsibilities of employees and employers and distinguishes between employees and independent contractors.
2. Independent Contractors Act 2006: This act provides additional protections for independent contractors in Australia, including protections against unfair contracts and treatment.
3. Fair Work Ombudsman: The Fair Work Ombudsman is the government agency responsible for enforcing workplace laws in Australia. Their website provides information on worker rights and entitlements, including determining whether a worker is an employee or an independent contractor.
4. Australian Taxation Office: The Australian Taxation Office (ATO) administers tax and superannuation laws in Australia. Their website provides information on worker classification for tax purposes, including information on determining whether a worker is an employee or a contractor.

European Union

The European Union has established rules regarding worker classification and the protection of workers’ rights. The rules vary by country, but generally, worker classification is determined by factors such as the degree of control the employer has over the worker, the worker’s ability to substitute someone else for doing the work, and the level of financial risk the worker bears. Here are some links to relevant laws and regulations in the European Union regarding worker classification.

1. EU Labour Law. This website provides an overview of EU labour law and regulations, including information on worker classification and employment contracts.
2. Directive 2003/88/EC. This directive establishes minimum standards for working conditions in the EU, including maximum working hours, minimum rest periods, and annual leave entitlements.
3. Directive 2014/67/EU. This directive guides the enforcement of EU rules on the posting of workers, including rules on worker classification and the protection of workers’ rights.
4. European Labour Authority. The European Labour Authority is the EU agency responsible for promoting and enforcing EU labour laws and regulations. Their website provides information on worker rights and protections, including information on worker classification.
5. European Trade Union Confederation: The European Trade Union Confederation is the umbrella organization for trade unions in the EU. Their website provides information on worker rights and protections, including information on worker classification and the protection of workers’ rights.

Get Express Quote

Understanding Benefits and Risks of Hiring Independent Contractors and Full-time Employees

Hiring independent contractors or full-time employees across borders can have benefits and risks, which should be carefully considered before deciding. Here are some points to keep in mind.

Benefits of Hiring Independent Contractors

1. Access to a Global Talent Pool

Hiring independent contractors from other countries can provide access to a wider range of skills and expertise than may be available locally.

2. Cost Savings

Independent contractors may be willing to work for lower rates than local employees, which can help businesses save on labor costs.

3. Flexibility

Independent contractors can be hired project-by-project, allowing businesses to adapt to changing workloads or market conditions.

Risks of Hiring Independent Contractors

1. Legal and Regulatory Compliance

Hiring independent contractors across borders can be complex from a legal and regulatory perspective. Different countries may have different laws governing employment relationships and tax obligations.

2. Communication and Cultural Barriers

Working with independent contractors from different countries may require navigating language and cultural differences, creating communication challenges and misunderstandings.

3. Data Security

Sharing confidential information with independent contractors in other countries can pose security risks, as different countries may have different privacy and data protection laws.

Benefits of Hiring Full-time Employees

1. Long-term Commitment

Hiring full-time employees across borders can provide a more stable and long-term commitment to the business, which can help build relationships and foster loyalty.

2. Cultural Diversity

Having employees from different countries can bring diverse perspectives and ideas to the business, leading to innovation and creativity.

3. Stronger Communication

Having employees in different countries can facilitate stronger communication and collaboration across borders, which can help businesses operate more efficiently and effectively.

Risks of Hiring Full-time Employees

1. Legal and Tax Compliance

Hiring full-time employees overseas can be complex from a legal and regulatory perspective, as different countries may have different employment laws and tax obligations.

2. Administrative Burden

Hiring full-time employees internationally s can require significant administrative work, such as obtaining work visas and complying with local labor laws.

3. Cost

Hiring full-time employees across borders can be more expensive than hiring independent contractors, as businesses may need to provide additional benefits such as health insurance and retirement plans.

Overall, when considering whether to hire independent contractors or full-time employees when going global, businesses should carefully evaluate the benefits and risks in light of their specific needs and circumstances. Consulting with legal and tax experts can also help businesses navigate the complexities of international employment relationships.

Get Express Quote

What Are the Consequences and Liabilities of Misclassifying Employees?

Misclassifying employees as independent contractors can result in various consequences and liabilities for employers, including:

1. Back taxes: Employers may have to pay back taxes at the national, state, and local levels.
2. Back benefits: Employers may be responsible for providing backdated benefits to the employee, such as medical insurance, worker’s compensation, vacation pay, and sick leave.
3. Legal penalties: Employers may be subject to legal fines, including liquidated damages and attorney fees. In some cases, misclassification can lead to class action lawsuits.
4. Damage to reputation: In addition to financial and legal repercussions, employers risk damage to their reputation among peers and potential hires.

How Global Employer of Record Can Help Address Worker Misclassification Risk?

Global Employer of Record (EOR) service providers can help employers operating internationally address the risk of worker misclassification by providing expert guidance and support on compliance with local labor laws and regulations. Here are some ways that EOR service providers can help.

1. Compliance with Local Laws in 190 Countries

Global Employer of Record has expertise in local labor laws and regulations and can help employers ensure compliance with worker classification rules in different jurisdictions. They can guide whether a worker should be classified as an employee or an independent contractor. They can also assist with the necessary paperwork and documentation to ensure compliance.

2. Worker Misclassification Risk Management

Global EOR service providers can help employers manage the risks associated with worker misclassification by supporting tax compliance, workers’ compensation insurance, and other regulatory requirements. They can also help employers stay up-to-date with changes to labor laws and regulations in different countries.

3. Flexibility

A Global EOR can offer flexible employment solutions for international workers, such as short-term assignments, contract work, or permanent employment, depending on the needs of the employer and the worker. This flexibility can help employers manage their workforce more effectively while minimizing the risk of worker misclassification.

5. Administrative Support

A Global Employer of Record can handle administrative tasks related to employment, such as payroll processing, benefits administration, and compliance reporting. This can help employers focus on their core business activities while ensuring that their international workforce is managed effectively and compliantly.

Global EOR can help employers navigate the complex and ever-changing landscape of worker classification laws and regulations across different jurisdictions. By leveraging the expertise and support of a Global EOR, employers can reduce the risk of worker misclassification and ensure compliance with local labor laws and regulations.

Get Express Quote

Wrapping Up

Understanding worker classification and its implications is critical to managing a successful international business. By staying informed and seeking expert advice when needed, C-level executives can help protect their businesses and avoid costly legal and financial consequences.

By partnering with a Global EOR, businesses operating internationally can ensure compliance with local labor laws and regulations and avoid the risks associated with worker misclassification. A Global EOR can help with everything from onboarding and payroll management to tax compliance and HR support.

Benefits of the Global EOR Talent Engagement Model

1. Reduced risk of worker misclassification and associated legal and financial consequences.
2. Simplified and streamlined HR and payroll processes across multiple jurisdictions.
3. Compliance with local labor laws and regulations, including tax compliance.
4. Access to global talent without the need for setting up a legal entity in foreign jurisdictions.
5. Improved flexibility and scalability for global talent engagement.

Overall, the Global EOR talent engagement model can help businesses minimize the risks associated with engaging global talent while providing a streamlined and compliant solution for managing a global workforce.

In the rapidly evolving landscape of global payroll management, the nexus between technology, user needs, and regulatory shifts is driving revolutionary changes. Today’s organisations are focused on ensuring accuracy and compliance in their payroll processes, enhancing user experiences, and meeting the diverse demands of a global workforce.

This article encapsulates 25 emerging trends shaping the contemporary world of payroll management. From harnessing the power of cloud technologies and AI to adapting to the rise of the gig economy, these trends provide a comprehensive glimpse into the future of payroll. Let’s delve deeper into each trend to understand its significance and the value it brings to modern businesses.

Navigating a Global and Diverse Work Landscape

The era of globalisation has ushered in a new set of challenges and opportunities for businesses, especially when it comes to managing payroll across multiple jurisdictions. Global employers are not merely grappling with numbers—they’re crafting strategies that address regional disparities, workforce diversities, and ever-evolving regulatory environments.

1. Globalisation of Payroll

• Insight: A globally integrated payroll system is not just a matter of convenience—it’s a linchpin for cohesive business operations and informed strategic decisions. A singular view can highlight disparities, identify cost-saving opportunities, and foster organisational alignment.
• Actionable Strategy: Embrace a global payroll platform that provides centralised reporting. Yet ensure that it remains agile enough to address local regulatory shifts. Integrate real-time analytics to monitor cross-border transactions and facilitate instant financial decision-making actively.

2. Customisation

• Insight: Payroll isn’t one-size-fits-all. Regional nuances, from holidays to union rules, can significantly affect payroll. Understanding these distinctions is crucial to ensure compliance and employee satisfaction.
• Actionable Strategy: Regularly collaborate with regional teams and third-party local experts. This knowledge sharing will ensure payroll systems are appropriately customised and infuse global strategies with regional insights.

3. Gig Economy Adaptation

• Insight: The gig economy is rewriting the rules of employment and compensation. It’s not just about processing payments differently—it’s about understanding how non-traditional employment impacts benefits, talent retention, and legal liabilities.
• Actionable Strategy: Establish clear protocols for freelance and contract-based engagements. Develop a comprehensive understanding of how gig workers fit into your global workforce strategy and what their inclusion means for financial forecasting.

4. Centralisation

• Insight: While centralising payroll operations can offer better control, balancing this against the need for regional expertise is crucial. Centralised processes disregarding regional nuances can lead to compliance oversights and financial missteps.
• Actionable Strategy: Implement an integrated model where regional expertise centres complement central oversight. This approach combines the efficiency of centralisation with the nuanced understanding of decentralisation.

The Digital Revolution in Payroll

As the digital age continues its relentless march forward, no business operation remains untouched, and payroll is no exception. Technological advancements are not just about automating routine tasks; they are fundamentally altering how companies think about and manage their payroll operations. For businesses looking to thrive, understanding these shifts is not just beneficial—it’s imperative.

5. Cloud-Based Systems

• Insight: Shifting from traditional on-premises systems to cloud-based platforms isn’t merely a trend—it’s a necessary evolution. The cloud offers unparalleled scalability, flexibility, and security, facilitating seamless operations irrespective of a company’s size or geographic spread.
• Actionable Strategy: Prioritise transitioning to a cloud-first approach for payroll. Its flexibility regarding access, backups, and updates makes it a worthy investment for future-proofing payroll operations.

6. AI and Machine Learning

• Insight: AI and ML are much more than buzzwords. They’re tools that can predict payroll anomalies, optimise salary distributions, and even forecast hiring needs based on financial data.
• Actionable Strategy: Integrate AI-driven analytics into your payroll processes. Leveraging predictive analytics can proactively address potential issues, ensuring smoother payroll cycles and more informed financial decisions.

7. Real-Time Analytics

• Insight: In an age where data drives decisions, having access to real-time payroll analytics is invaluable. It empowers HR and finance teams to make informed, timely decisions directly impacting the company’s bottom line.
• Actionable Strategy: Equip your payroll systems with robust analytics tools. Review this data regularly to identify trends, efficiencies, and areas for improvement.

8. Mobile Accessibility

• Insight: The modern workforce is mobile-first. Ensuring payroll information and functionalities are accessible on mobile devices is not a luxury—it’s an expectation.
• Actionable Strategy: Opt for payroll solutions that offer comprehensive mobile applications. This enhances user experience and ensures consistent access, irrespective of location.

9. Integrated Systems

• Insight: Siloed operations are a relic of the past. Integrated systems that combine HR, finance, and even CRM functionalities can streamline operations, improve data accuracy, and enhance inter-departmental collaboration.
• Actionable Strategy: Work towards systems integration. Ensuring that different tools speak to each other reduces redundancies and paves the way for a holistic view of company operations.

10. SaaS Payroll Solutions

• Insight: The shift to Software as a Service (SaaS) isn’t just about cost-effectiveness. It ensures payroll systems are always updated, compliant, and scalable based on ever-changing business needs.
• Actionable Strategy: Consider transitioning to a SaaS model for payroll. The regular updates, built-in compliance checks, and scalability make it a strategic choice for modern businesses.

11. Use of APIs

• Insight: In an interconnected digital ecosystem, APIs are the bridges that connect different software solutions, enabling them to work together harmoniously.
• Actionable Strategy: When selecting payroll software, prioritise solutions that offer robust API integrations. This ensures that your payroll system can easily connect with other business tools, enhancing overall efficiency.

12. Blockchain Technology

• Insight: Beyond cryptocurrency, blockchain’s transparent and immutable nature has vast potential in payroll—particularly in fraud prevention and ensuring transactional transparency across borders.
• Actionable Strategy: Stay updated on emerging blockchain-based payroll solutions. While this field is nascent, early adoption could offer a competitive edge regarding security and transparency.

Employee-Centric Payroll Innovations

The employee experience is undergoing a radical transformation. Today’s workforce seeks compensation, empowerment, flexibility, and tools to contribute to their well-being. Innovative payroll solutions are emerging that place employees at the centre, recognising that a satisfied and empowered workforce can greatly contribute to business success.

13. Self-Service Portals

• Insight: Gone are the days when employees would wait for HR to address their payroll queries. Today’s workforce seeks autonomy in managing payroll details, from checking payslips to updating tax information.
• Actionable Strategy: Implement comprehensive self-service portals that offer a blend of autonomy and security. Regular feedback loops can help refine the portal’s features based on employee preferences.

14. Enhanced User Experience

• Insight: User experience in payroll systems is no longer a back-end concern. A system that’s intuitive, responsive, and easy to navigate can significantly boost employee satisfaction and reduce the need for frequent support.
• Actionable Strategy: Prioritise UX design in your payroll solutions. Regular usability testing and gathering employee feedback can ensure the system remains both functional and user-friendly.

15. On-Demand Pay

• Insight: With instant transfers and digital wallets, the modern financial ecosystem has ushered in an era where waiting for a monthly paycheck seems archaic. Employees increasingly prefer accessing their earnings as and when they need them.
• Actionable Strategy: Explore partnerships with platforms that offer on-demand pay facilities. While ensuring financial feasibility, such initiatives can greatly enhance the company’s value proposition to its workforce.

16. Continuous Payroll

• Insight: Traditional payroll cycles are giving way to real-time payment structures. This shift caters to immediate financial needs and aligns with the gig economy’s payment models.
• Actionable Strategy: Investigate the feasibility of real-time payment structures. If a complete shift seems challenging, consider hybrid models that offer both traditional and real-time payment options.

17. Employee Financial Wellness

• Insight: Financial wellness goes beyond just earning a paycheck. Tools that aid employees in budgeting, savings, and investments contribute to their overall well-being, leading to increased productivity and loyalty.
• Actionable Strategy: Integrate financial wellness tools and educational resources into your payroll systems. Collaborate with financial experts to conduct regular workshops and offer personalised financial guidance.

Efficiency and Accuracy Enhancements

In the complex world of payroll management, efficiency and accuracy are paramount. With businesses expanding globally and compliance norms becoming more stringent, the margin for error is shrinking. The solution? Technological innovations that prioritise both efficiency and precision.

18. Automation of Routine Tasks

• Insight: Manual processes in payroll are not only time-consuming but are susceptible to human errors. Automation ensures consistency, speeds up processes, and reduces the potential for inaccuracies.
• Actionable Strategy: Identify repetitive and time-intensive tasks within the payroll process. Implement automation tools, ensuring that they’re configured to align with company policies and local compliance requirements.

19. Predictive Analytics

• Insight: Payroll isn’t just about disbursing salaries; it’s also about forecasting financial liabilities, budgeting, and future planning. Based on current and historical data, predictive analytics provides a window into future trends.
• Actionable Strategy: Embed predictive analytics capabilities into your payroll system. Regularly review its forecasts, adjusting for external economic or industry-specific variables to ensure financial preparedness.

20. Advanced Reporting

• Insight: As businesses grow, so does the complexity of their payroll data. Advanced reporting tools simplify and transform this data into actionable insights, helping businesses make strategic decisions.
• Actionable Strategy: Opt for payroll solutions offering various reporting features. Ensure teams are trained to interpret these reports, translating data into actionable business strategies.

21. Payroll Fraud Detection

• Insight: Payroll fraud, be it from internal or external sources, can have significant financial and reputational repercussions. Modern payroll systems have sophisticated tools to detect and prevent fraudulent activities.
• Actionable Strategy: Incorporate AI-driven fraud detection tools into your payroll systems. Regular audits and real-time monitoring can act as robust deterrents against potential fraud.

Compliance and Payroll Security

In the age of digitisation and globalisation, the payroll landscape is undergoing significant shifts, not just in terms of technology but also in its responsibility towards data integrity, legal mandates, and environmental stewardship.

23. Data Security

• Insight: As payroll systems become increasingly digital, they also become prime targets for cyber threats. Safeguarding sensitive employee data is not only a best practice but a foundational trust factor between employers and employees.
• Actionable Strategy: Employ multi-layered security approaches like encryption, two-factor authentication, and regular security audits. Stay updated with global cybersecurity best practices and ensure they are integrated into the payroll system.

23. Regulatory Compliance

• Insight: As businesses expand across borders, they face complex regulations that change frequently and vary by region. Non-compliance can result in financial penalties and damage to reputation.
• Actionable Strategy: Invest in payroll solutions designed to adapt to varying regulations. Conduct regular training sessions to keep the HR and payroll teams abreast of international and local compliance requirements.

24. Outsourcing Payroll

• Insight: The complexity of modern payroll and the demands for accuracy and compliance have led many companies to rely on external experts who specialise in these areas.
• Actionable Strategy: If considering outsourcing, perform thorough due diligence to select a provider that aligns with your company’s needs, values, and operational footprint.

25. Sustainable Payroll

• Insight: The global call for sustainability is resonating within the payroll sector. Eco-friendly practices reflect corporate responsibility and can result in operational cost savings.
• Actionable Strategy: Promote paperless payroll processes, utilize energy-efficient infrastructure, and support digital methods of communication and documentation.

Looking Beyond Today: The Future of Global Payroll

For global employers navigating the intricate web of payroll management, the current trends and innovations represent just the beginning. The fusion of technology, employee expectations, and regulatory dynamics is reshaping the fabric of payroll processes. But what lies ahead?

The next wave of payroll transformation will likely be characterised by even deeper artificial intelligence integrations, pushing the boundaries of predictive analytics and personalised employee experiences. Global employers should anticipate the rise of more universal compliance standards, especially as businesses continue to transcend traditional geographical boundaries. This may streamline multi-country operations, offering a more unified approach to global payroll management.

Additionally, the definition of ’employee’ might evolve, given the rise of gig economies, remote work, and unconventional work structures. Payroll systems must be agile and accommodate diverse employment models, from full-time contracts to micro-tasks.

Furthermore, as sustainability influences corporate strategies, eco-conscious payroll practices may become a standard expectation, not just an added advantage. This would be driven by environmental imperatives and a new generation of employees prioritising eco-responsibility.

For global employers, the message is clear: Embrace the present innovations, but always keep an eye on the horizon. The world of payroll is not static; it’s dynamic and ever-evolving and holds promise for those willing to adapt, innovate, and lead.

HR’s Role in Smooth Mergers and Acquisitions Transitions

The success of mergers and acquisitions (M&A) depends on speed, but HR teams are often left in the dark until the last minute. This can make it challenging for HR teams to adapt and prepare for the changes that come with the deal. As a result, the HR team must work quickly and efficiently across multiple locations to ensure a seamless transition and prevent any negative impact on the deal.

In addition to the time constraints, HR must also navigate the complex legal and compliance requirements of multiple markets where they may have limited knowledge. They must also quickly integrate new systems and processes, often with a limited runway.

Furthermore, HR is tasked with supporting and training a new workforce with different cultural norms and expectations. Failure to adequately engage the new workforce can lead to low morale, decreased productivity, and increased turnover rates.

To succeed in Mergers and Acquisitions M&A deals, HR leaders must be able to manage the challenges of a fast-moving, complex environment while still delivering results. However, it is important to consider the risks and challenges that may arise if HR operations are not effectively managed across multiple jurisdictions. 

Global Employer of Record companies can maximize success during times of change, such as mergers and acquisitions, business restructuring, or close-downs.

Inadequate HR management during a merger or acquisition for global employers can result in various challenges, such as non-compliance issues, difficulties in managing employees, risks of litigation, inconsistent HR operations, and limited access to top talent in different regions.

This article will discuss the benefits of working with a Global Employer of Record service during times of change and how a Global EOR can mitigate these risks and ensure effective HR operations across multiple jurisdictions.

During Mergers and Acquisitions,  business restructuring, or close-downs, a Global EOR can help ensure a smooth transition for employees, provide clear communication and handle any issues that may arise.

Navigating HR Challenges during Mergers and Acquisitions

Labour, Tax, and Immigration Compliance Issues

Compliance issues are one of the main risks of not having comprehensive HR management across locations. Each country has its own labour, tax, and immigration laws and regulations pertaining to employment, and failing to comply with these laws can lead to costly fines and legal disputes. International Employers could face difficulties staying up to date with the intricate and constantly evolving laws in different jurisdictions without the assistance of a global EOR.

Employee Management during Mergers and Acquisitions (M&A) Operations

M&A and other business transitioning processes can create significant challenges for employers with employees in multiple jurisdictions. From global payroll and benefits to employer and employee taxes, there are numerous aspects of global HR operations to consider.

Managing employees across multiple jurisdictions can be complex and challenging, particularly regarding global payroll, benefits, employer and employee taxes, and other aspects of global HR operations. Without the guidance and expertise of the Global Employer of Record, international employers may struggle to manage employees effectively, which can lead to high turnover rates and low employee morale.

Risk of Litigation: Don’t Let Poor HR Management Ruin Your Mergers and Acquisitions Deal

Neglecting HR management during M&A can lead to several problems, including non-compliance with local laws, disengaged employees, and the departure of valuable personnel. Poor HR management can increase employers’ litigation risk, particularly if employees feel their rights have been violated. This can include issues such as wrongful termination and more. These consequences can harm the reputations of both the acquiring and acquired companies, ultimately putting the deal’s success at risk.

Moreover, many countries have mandatory benefits requirements, such as health insurance, pensions, and paid time off. Employers may struggle to navigate these requirements without proper guidance, resulting in legal disputes and unhappy employees across jurisdictions.

Working with a Global EOR with expertise in managing global HR compliance and benefits can mitigate these risks by ensuring employers comply with in-country regulations and avoid costly legal issues.

Lack of Consistency

Employers operating in multiple jurisdictions may struggle to maintain a standardized approach to HR operations if they lack consistent HR management. This can cause confusion and frustration among employees and lead to potential legal issues if employment practices vary across regions.

Inconsistent HR practices and policies can create significant challenges for companies undergoing an M&A deal, potentially leading to reputation damage and legal issues.

However, by partnering with a Global EOR, employers can ensure a standardized and compliant approach to HR management, mitigating these risks and increasing the likelihood of a successful M&A deal.

Limited Talent Pool

During M&A or other business transitioning, international employers will likely face challenges in attracting and retaining top talent in different regions. This challenge becomes more pronounced in countries where skilled workers are scarce or where talent competition is fierce.

Engaging with a Global EOR can assist employers in retaining and attracting top talent by providing competitive compensation and benefits packages and fostering a supportive and positive work environment.

Get Express Quote

Benefits of Partnering with a Global Employer of Record to Support Mergers and Acquisitions (M&A) Operations

If your business is undergoing any transition, such as a merger or acquisition (M&A) or a shutdown, it’s crucial to understand the benefits of teaming up with a Global Employer of Record (EOR) service. A Global EOR can help ensure a smooth transition by providing valuable support and solutions. Here are several ways that a Global EOR can prove advantageous during times of change.

Employee Transfer and Management

In the case of an M&A, a Global EOR can help transfer employees from one company to another. This includes ensuring a smooth transition for employees, providing clear communication, and handling any issues that may arise. In addition, a Global EOR can also manage employees during business close-downs, including handling severance payments and termination procedures following all in-country labour and tax laws.

Compliance with Local Laws and Regulations

During M&A or business close-downs, significant legal and compliance issues may be considered. Firstly, a Global EOR can help international employers navigate the complex and rapidly evolving landscape of global employment laws and regulations. This can be particularly challenging for employers operating in multiple jurisdictions, as they must comply with the different legal requirements and cultural norms of each country in which they operate.

A Global EOR can help ensure compliance with local labour and tax laws and regulations, including compliant employment contracts, tax filings, and benefits administration. By working with a Global EOR, businesses can avoid legal issues and fines that may arise if compliance issues are not handled correctly.

The deep global employment expertise of the Global EOR and their in-country best practices can help international employers remain compliant with all applicable laws and regulations, reducing the risk of costly legal disputes or regulatory penalties.

Minimising Risk and Cost during Business Transitions with Global EOR Solutions

A Global Employer of Record can help minimise the risk of legal issues and associated costs during business transitions by providing expert guidance on compliance issues across multiple jurisdictions. They can ensure that all employment contracts, benefits, and tax obligations comply with local laws and regulations, reducing the risk of fines and penalties. 

In M&A situations, a Global EOR can conduct due diligence to identify and address compliance issues and provide ongoing support to ensure a smooth transition.

Maximizing Business Agility with a Global EOR’s Flexible Talent Engagement Model

A Global Employer of Record can offer various global employment solutions to help businesses navigate through M&A or business close-downs. With a flexible global talent engagement model, businesses can scale up or down quickly to meet new demands while minimizing the risk of financial penalties associated with non-compliance. This is achieved through the Global EOR’s expertise in managing compliance issues and navigating the complexities of HR operations across multiple jurisdictions.  By partnering with a Global EOR, businesses can benefit from streamlined HR processes, including payroll, benefits administration, and employee onboarding and offboarding.

How Acumen International Can Facilitate M&A Operations

As a leading global EOR, Acumen International has the expertise and experience to help businesses navigate the complexities of M&A operations. With our extensive network of local partners and their in-depth knowledge of local laws and regulations, we can ensure a smooth and seamless transition during times of change, such as M&A or business restructuring. This can help minimize disruptions to operations and maintain productivity while also ensuring compliance with local laws and regulations.

Partnering with Acumen International can also help businesses save time and resources by streamlining HR processes and minimizing administrative burdens. Our comprehensive global employment solutions, including payroll management, employee benefits, and HR compliance, can help businesses focus on core activities and strategic initiatives rather than being bogged down by administrative tasks.

Sample Employment Tax Calculation

In this candid conversation, we dive into the transformative journey of Acumen International, exploring the nuances of adapting to a hybrid workforce model and the strategic moves that set the company apart in the global employment solution arena. Abid Hamid, Non-Executive Director at Acumen, shares his first-hand insights with a blend of professional acumen and personal flair.

Q: Can you share a brief overview of the global meet-up in Cyprus and how it symbolised a new chapter for Acumen International?

A: Cyprus was an opportunity for our dispersed team, scattered by the war in Ukraine, to come together. It was a rare chance for face-to-face connections that we’ve been missing, making it more than just a corporate meet-up. It marked a new chapter of resilience and unity.

Q: What were the key challenges and triumphs experienced by Acumen in relocating the team and adapting to remote work over the past two years?

A: No one has a continuity plan for war breaking out. But we adapted to it incredibly well. Anyone who wanted to move could do so. We ended up scattered across the globe. And yet, the business didn’t just survive; it thrived. That’s a testament to our resilience. Despite everything, we supported our clients without missing a beat, showing the true strength of our business fabric.

Q: What crucial learnings from Acumen’s remote work adaptation can you pass on to businesses currently exploring or optimising remote workforce models?

A: After AI, remote work is probably the most talked about item at board meetings across the world, but the problem when expanding internationally, is how to retain a culture. With Acumen’s Global Payroll Calculator (GPC), the world becomes your talent pool. Imagine you’re a US company needing web developers. With the GPC, you input your budget, and you can compare five different countries instantly. It’s like having the world at your fingertips, offering you the best talent, regardless of geography.

I think the only problem we have, is that while you can hire anyone from anywhere, maintaining company culture becomes the new challenge. Ensuring that someone joining from halfway across the world feels as connected and invested as someone in your local office is critical.

The advent of remote work has levelled the playing field regarding cultural differences. Entering a new market, such as opening an office in India or Malaysia, for instance, brings its own set of challenges and learnings. But remote work has, in many ways, made understanding and bridging these cultural gaps easier. The key lies in not just leveraging tools like the GPC for global hiring but in deeply investing in the cultural integration of your global workforce. 

Q: Following Acumen’s launch of the Contractor Solution to support the global trend of hybrid workforces, how do you envision companies effectively leveraging a mix of freelance and full-time talent?

A: The future is hybrid, no doubt. With Acumen’s Contractor Solution, we’re essentially giving expanding businesses a new toolkit. Whether you need someone for six months or a permanent team member, we’re providing global employment solutions for all options. Our expertise in knowing the legalities and nuances of 190 markets can help our clients make informed choices. Many countries, especially around Europe, have strict rules when it comes to contracting, so it’s important that our clients understand this and can see all the best options available. 

We’re not just offering services; we’re enabling decision-making with a comprehensive understanding. It’s about flexibility, but also about compliance and making the right decision for your needs.

Q: With the evolving nature of work, what strategies do you recommend for businesses to remain agile and competitive in leveraging global talent?

A: Talent is what makes a company grow. Today, you’re not limited to your local talent pool; you’ve got access to talent across the whole world. But diving into global hiring is not just about finding cheaper alternatives; it’s about finding the best fit for your needs. The right partner can demystify the process, ensuring compliance, quality, and cost-effectiveness. It’s about broadening your horizons and making choices that align with your strategic vision.

Acumen can step in to de-risk the global hiring process. We offer tools and insights that simplify complex decisions, like choosing between hiring locally or venturing into new markets like Chile or Bulgaria. Our job is to remove the intimidation factor from global hiring, ensuring compliance with regulations, transparency, and quality every step of the way.

Q: What advice would you give leaders managing the transition to a hybrid or fully remote workforce model?

A: Dive deep and understand what you’re getting into. Don’t shy away from seeking help. The shift to remote or hybrid models is laden with nuances—from legal and tax implications to cultural integration. It’s about understanding the playing field and making informed decisions. Markets like South Africa offer highly skilled, English-speaking specialists available in the same time zone at a lesser cost than someone in the UK. Find a specialist like Acumen who can talk you through it and find a solution that works for you. And remember, cost isn’t the sole factor; it’s the value that matters.  

Q: How does Acumen plan to support businesses in navigating the shift towards more flexible, hybrid workforce models in the coming years?

A: At Acumen International, our approach goes beyond offering mere global employment services; we offer full consultation solutions. With over two decades under our belt, we are committed to education, risk management, and strategic advice. Throughout this, we have navigated the complexities of global employment, enabling us to offer unmatched insights and practical advice.

This vast amount of knowledge we have, allows us to guide businesses with confidence, backed by real-world proof points of our expertise. Whether it’s explaining the intricacies of compliance across different jurisdictions or tailoring workforce solutions that fit a company’s unique needs when entering a new market..

When you engage with Acumen, you’re not just leveraging our services; you’re tapping into a rich history of expertise and a proven track record. 

Reach out to us if you need assistance

A subsidiary, a representative office, or any other term you want to use, describes the foreign arm of a multinational company that does business in said country. Technically, a given company could have as many legal entities as it has in countries it does business in, one in the Philippines, one in the UAE, and one in Spain, for example.

One thing that is going to have a significant ripple effect on your foreign branch is what structure you decide to take. Whether you go into incorporation or create a stand-alone subsidiary impacts your tax liability, business capabilities, and more. Here’s a look at all the major entities that can employ staff and what sets them apart:

Selecting the Ideal Overseas Legal Entity Set Up Option

When your company leadership decides to expand into a new country, one of the first things you’re likely to hear is how important it is for you to start a new legal entity in that country. Short-term employee trips may be satisfactory for exploratory visits, but a formal legal entity is needed for significant business relationships. So, with this in mind, here’s a closer look at what it takes to set up a foreign business entity and when you should look into employment without establishment in a country of your choice.

Establish Entry and Exit Strategies Beforehand

The business world is always moving forward. To stay ahead of the competition, it is essential to grow quickly and make decisions without hesitation. This can sometimes lead to businesses expanding without a well-thought-out plan, but taking advantage of opportunities as they arise is often necessary.

Different businesses have different strategies for entering and exiting countries. However, ad-hoc strategies are more likely to lead to miscommunication and problems. Businesses must have a fully realized strategy before entering or exiting countries. By doing more planning and preparation, the process will be more straightforward.

If your business can rapidly enter and exit markets, it will be much easier to be agile and responsive to fluctuations in demand. This flexibility reduces the chances of disruptive bottlenecks and helps ensure continued growth.

Get Express Quote

Understanding the Concept of Permanent Establishment

There is no one-size-fits-all when choosing the suitable business model for your company. It depends on your business activities, budget, employment plans, time constraints, and risk tolerance.

When organizations consider expanding their operations internationally, they must decide whether to establish a legal entity in-country. If your organization has determined the time is right for global expansion, and you’ve decided the location(s) targeted, you will need to consider establishing a legal entity in-country. Deciding whether to set up a legal entity in the host country and, if so, what type of entity to set up will be critical to protecting your organization’s bottom line and reputation.

What Is a Permanent Establishment?

A permanent establishment (PE) is a fixed place of business that can be a branch office or an independent office to conduct business activities and generate profits in a foreign country. The PE is subject to tax on its income derived from within the host country, even though it may be part of an integrated enterprise with operations outside the host country. The PE can also be taxed on its income from outside the host country if it has obtained substantial benefits from being present in the host country and carrying out business activities there.

Permanent Establishment Management Control

The critical question is whether your organization wants to control its business operations in that country or prefers to outsource all aspects except managing assets and collecting profits. 

A foreign legal entity might be best suited if you want to maintain direct control over everything from accounting procedures to staff management. However, an alternative setup option may be right for you if you want to outsource some aspects of your operations other than managing assets and collecting profits.

Some countries require you to have a percentage of local ownership to do business. This makes the LLC an appealing option. As a limited liability company, shareholder exposure is limited based on the investment.

Permanent Establishment Timeframe

Establishing a legal entity is a critical first step. Depending on the country, the type of legal entity selected, and other factors, this process can take anywhere from two weeks to six months. Some countries allow businesses to establish an entity without having a physical office space or local bank account – these are typically the faster options.

Before you embark on any foreign venture, ask yourself the following questions.

20 Questions to Ask Before Choosing a Foreign Legal Entity Set Up

1. What activities do you see your company performing in the host country, now and in the future?
2. How many employees or contractors will you engage in the host country?
3. What will the partners’ level of involvement be in the host country?
4. What are your long-term plans for operating in the host country? Do you plan to expand your business there?
5. Would you like to buy or lease office space in the host country?
6. What is your timeframe for operating in the host country?
7. What revenue model do you plan to use?
8. Are marketing and PR any significant advantages to operating as a local company?
9. What potential tax implications will your company have if it expands into the host country? 
10. Could any taxes be levied on specific industries or types of investment? 
11. Would there be any unusual withholding taxes on fund transfers or sales of goods?
12. What initial capital and governance requirements must be met to establish a new business in a foreign country?
13. What is the ideal number of shareholders to distribute ownership among?
14.  Who will act as a local director?
15. What level of freedom will local management have?
16. Do your employees in the host country have a designated workspace from which they will operate? This could be their home office or other formal business accommodation. 
17. Are your employees in the country extensively involved in sales or contract negotiations? They don’t need the power to sign contracts to qualify as being involved in contract negotiations.
18. Do your employees’ job titles or descriptions pertain to revenue generation? 
19. Do your employees receive compensation related to sales, such as commissions or bonuses for meeting sales targets?
20. Do they receive compensation based on sales, such as commissions or bonuses for their sales performance?

Get Express Quote

3 Options for Multi-location International Employment

Businesses establishing a global presence face the challenge of managing and scaling an employee base with no common borders or language. To successfully expand abroad, companies have several options for enabling hiring in international markets. 

There are six key things to consider when choosing an employment method for your company’s global expansion:

1. Budget and time frame
2. Tax implications
3. Compliance
4. Employment liability
5. IP protection
6. Asset acquisition.

The most commonly used foreign market entry modes are the following: 

1. Overseas Permanent Establishment (a representative office, a branch, a subsidiary, and other foreign legal entity types )
2. Selecting independent contractors to handle tasks remotely.
3. Work with a global EOR (Employer of Record) and GEO (Global Professional Employer Organisation) Partner. 

The legal entity available to you will differ depending on the country, but there are generally three most common Permanent Establishment options: 

1. a representative office;
2. a branch;
3. a subsidiary.

Representative Office

What is a Representative Office?

If you’re looking to establish a presence in a new country with little to no revenue generation, a Representative Office (RO) may be the way to go. A Representative Office is the most limited of all options on this list, generally designed to allow a company to do marketing and other non-transactional practices.

Representative Offices are relatively quick and easy to set up. Your staff can be involved in brand promotion, customer service, or distributor support—but not direct sales or contract negotiations. Due to these limitations, an RO may not be the best option if you’re looking to grow your business rapidly in a new market.

When Open a Representative Office?

If your organization is considering establishing a Representative Office, some circumstances might make it a worthwhile investment. For example, if you need to conduct market research or attend trade shows to gauge potential interest in your product or service in a new territory or if you have customers or distributors who would benefit from regular in-person communication and support. Another reason you might need a Representative Office is to oversee local or regional brand promotion.

Branch

What Is a Branch?

A branch office is a company’s division that operates in a different geographical area from the parent company. This allows the business to serve a specific market or region more effectively. For example, a company headquartered in New York may have an office in Tokyo to serve the Japanese market or an office in Munich to serve the German market.

When Open a Branch?

Opening a branch office in another country can have profound implications for your company. First and foremost, you will not be protected from any legal obligations arising from the branch’s activities. Secondly, any profits generated by the branch will be subject to host-country taxes. Before deciding to open a foreign branch, be sure to research the host country’s tax laws and transfer pricing arrangements.

A branch office keeps many of the benefits of a subsidiary and is generally easier to register or capitalize. The trade-off here is that the laws of some countries mean you can only do marketing and sales work from a branch office.

Branch offices can have some disadvantages, but there are also situations where registering one may be the right decision for your organization. You should consider establishing a branch office if the following circumstances apply:

1. You will be involved in many activities in your host country beyond marketing. These activities are essential for sales and transactions but do not directly or indirectly generate revenue. Therefore, you need staff on the ground to carry out these essential tasks.
2. After careful consideration, you have concluded that the host country’s tax laws will protect the parent company from liability and have little impact on your overall profitability.
3. You have an excellent opportunity to move quickly and capture a market before the competition. You don’t want to spend time establishing a subsidiary entity type, so take advantage of this chance now.
4. You don’t plan to stay in the host country for very long.

Subsidiary

What Is a Subsidiary?

A subsidiary company is a separate legal entity from its parent company. A parent company usually establishes a subsidiary to conduct business in the host country. The main advantage of having a subsidiary is that it provides a layer of protection for the parent company from any liabilities arising from the subsidiary’s activities.

While setting up a subsidiary can be time-consuming and require significant financial investment, the advantages often far outweigh the challenges and costs. Subsidiaries can help limit the parent company’s tax exposure by shielding profits from taxes in the host country, which can provide excellent stability and security for the business.

A subsidiary is the most formal structure possible, which brings some key benefits, like having 100% foreign ownership. The trade-off is that it is also the most expensive and challenging to set up. Note that some countries require capitalization for any subsidiaries.

When Open a Subsidiary?

Businesses should consider establishing a subsidiary when the following circumstances exist:

1. Your plans involve staying in the host country for an extended period.
2. You have big plans for your business in the host country, and you’re confident that the profits will be high enough to justify setting up a subsidiary there.
3. Registering your company locally will improve its image and bolster its marketing and sales efforts. This move will help communicate to your customers that you are invested in the community and increase confidence in your brand.
4. If a company decides to open a branch office or another type of non-subsidiary entity in another country, that company will be required to pay taxes on its earnings in that country according to the tax laws of the host country.

 Foreign Entity Set-up Expenses

• Incorporation fees
• Statutory fund
• Filings
• Legal services
• Consultancy fees.

Get Express Quote

Advantages and Disadvantages of Each Legal Entity Type

Entity Type	Advantages	Disadvantages
Representative Office	No in-country Corporate Tax Less regulatory oversight Short set-up time	Cannot perform core business activities, sell, or transact business Grey-area activities, such as marketing and service activities, may trigger the permanent establishment
Branch	Can engage in the core business, sales, and transactional activities No share in the capital is required in most jurisdictions Greater flexibility to enter or exit markets Relatively short set-up time across most of the jurisdictions	Subjects parent company to legal obligations arising from branch activities Can expose parent company profits to host-country taxes Set-up and administration costs can be as expensive as a local subsidiary
Subsidiary	Can engage in the core, sales, and transactional activities  Limits tax and legal liability of host-country activities The entity can be marketed as a part of the local community	Set-up can be a lengthy process, with multiple government registrations May require statutory capital investment May require local directors  Subject to host-country regulatory oversight

Pros and Cons of Setting Up a Business Entity

One topic that isn’t discussed as much as it should be is whether setting up a business entity can help or hinder expansion plans. Here are some examples of positives and negatives in this regard.

Pros of Setting Up a Business Entity

Compliance 

This is probably the apparent advantage. You can’t legally hire and manage employees unless you have some form of legal entity. There are alternatives that are arguably better suited for many companies, though. We will discuss those later.

Flexibility

Depending on your setup format, your company will have much more versatility in business actions in the new country. If you are willing to make the investment to set up a full subsidiary, you have an entirely separate legal entity to work with.

Cons of Setting Up a Business Entity

Outright Restrictions

In some countries, like Saudi Arabia, there are limits on who can open a business in certain industries. For example, if you wanted to get into oil there, you would need to partner with a local. Naturally, finding a business partner you want to work with takes time.

Bureaucracy

Setting up a foreign branch or representative office still requires you to fill out various forms and communicate with different government agencies in your country of choice. Language and cultural barriers can make these complicated and slow things down even more.

Different Entry Requirements & Costs for Opening a Company in Several Countries

Permanent Establishment Risk: Addressing the Concerns

You may think you can conduct business overseas without registering a legal entity, but you would be wrong. You might need to register your business even if you only send an employee on a temporary assignment or establish a small promotional office. Failing to do so can result in severe consequences.

Different countries have different tax laws, and a multinational company must consider all of these when conducting business. The tax authorities of a particular country can determine which elements of the company’s economic activity take place in that country and how much profit is attributable to them. This process can be complex, but ensuring that the company complies with all applicable laws is essential.

Flying Under the Radar of Local Tax Authorities

An organisation’s sustained physical presence in a country can trigger a taxable presence, or a “permanent establishment” (PE), in that country. This may occur if the organization generates revenue directly from activities in that country or if the organization’s activities contribute to the revenue of a group entity in that country.

As an organization operating overseas, it is crucial to be cautious of triggering a Permanent Establishment (PE) under local laws, as this can expose your company to unexpected tax liabilities, fines, and reputational damage. Failure to properly register a Permanent Establishment can have severe consequences for your business, so it is essential to understand the requirements of each country in which you operate.

Although the Organisation of Economic Co-operation and Development’s (OECD) base erosion and profit shifting (BEPS) project has had many far-reaching outcomes, one of the most significant is the modification of the definition of a permanent establishment. This change has important implications for businesses operating in multiple jurisdictions, as it may affect their tax liability.

The OECD is using Action 7 of BEPS to tackle common tax-avoidance strategies used by multinational corporations to avoid paying taxes in the countries where they do business. The organization is trying to stop companies from sidestepping local tax authorities by establishing related distributors rather than agencies or commissionaires.

Triggering Permanent Establishment Risk

A business is taxed based on the geographic location of its income-earning activities. To ensure Fair Taxation of the Digital Economy, on 21 March 2018, the European Commission proposed new rules to ensure that digital business activities are taxed in a fair and growth-friendly way in the EU. The penalties for noncompliance are steep (20% penalty on top of the 3% tax, plus fines).

As businesses look to expand into new markets, they must be aware of their tax liability in each country with a customer base. They must also be aware of the compliance obligations in each country where they sell their products. Suppose you are selling digitally and don’t already have this in-house expertise or don’t work with a global PEO & EOR partner. In that case, you need to start thinking about addressing this challenge immediately.

As it turns out, the trigger of a taxable presence in another country is not just an abstract challenge but a real non-compliance risk. Business in another country can come with hidden risks –  like inadvertently triggering a taxable presence. 

Acumen International has experience dealing with this problem – we were approached by a client who had unwittingly violated PE laws abroad. Two of the company’s employees were placed in one of the EU countries, working from home. However, since they weren’t generating much revenue directly in that country, the company decided to do their payroll registration instead of registering a complete corporate legal entity.

One year later, the local state tax authorities came knocking to say that an employee’s job title containing the word “sales” meant the company should have registered in-country as a business, resulting in higher employer payroll taxes. Ultimately, the company owed over €20,000 in back taxes and fines.

Non-compliance with local PE requirements can have dire consequences for businesses. The company took steps to mitigate the damages, but the message is still pretty clear: adhere to the requirements or face serious repercussions.

Get Express Quote

When Can a Legal Entity Setup Be Justified?

A company set up in a foreign country can be justified as one with an international headcount of over 20 employees. If you’re dealing with a smaller headcount, a global PEO solution will be able to satisfy your needs cost-effectively.

A company setup is closely connected with ongoing expenses that must be considered during decision-making. A business’s cost to invest borders on $20K for legal company setup, with an additional $40 thousand annually spent for maintenance. The process will take three to four months, and this time must also be allocated.

A global PEO tackles this pain point by cutting you as much as 60% of expenditures while still providing you with the desired result: presence in a new country and active operations.

Third-party Global Employment Solutions: Be as Agile and Super Protected with a Global PEO and EOR Partner

Before hiring global talent, you must set up your business entity and jump through all the associated hoops. This can include paying taxes, setting up a compliant payroll system, and sometimes applying for a social security number from the tax authorities. These additional steps can take anywhere from a few weeks to several months.

Many companies see the decision to set up subsidiary companies as a critical function of doing business abroad. However, as we’ve pointed out, there are pros and cons to this approach.

However, due to a lack of industry knowledge, many assume that building a legal entity abroad is the only way to expand while staying in industry compliance. Not necessarily.

Rather than go through the bureaucratic process, you can use a global Employer of Record solutions provider like Acumen International. We can help you in over 190 different countries. By taking the burden off your hands, we serve as an alternative, agile approach that supports modern global employment needs.

Global PEO and EOR — Alternative Options To Setting Up A Legal Entity Overseas

As your business expands globally, it is essential to be agile to make the best decisions for your company. Markets and consumer demand constantly change, so being as flexible as possible is vital. The more agile you are, the easier it will be to make the right choices for your business.

Outsourcing can be an excellent way for organizations to save money and increase efficiency. By carefully selecting which global employment functions to outsource and working with a trusted partner, businesses can reap the benefits of outsourcing without putting themselves at risk. Outsourced standard functions include payroll, benefits, and absence management, but deciding which functions to outsource should be made case-by-case. With careful planning and execution, outsourcing can help your organization run more smoothly and save money in the long run.

When expanding your business into new countries, there are many benefits to using a global PEO (Professional Employment Organization) or EOR (Employer of Record). A Global PEO and EOR Partners can handle all the immigration, hiring, payroll, tax, and HR compliance for you, freeing up your time to focus on other aspects of running your business. And if you ever need to leave the country, you can do so without being tied down by any long-term commitments.

The main benefit of using a global PEO versus a new entity for your business setup abroad is a lack of administrative cost and burden. Your global PEO provider will handle the complex logistics of staying compliant and managing your international employees without a legal entity. However, you ultimately have the final say on what gets done. Also, by going this alternative way, you still get the most considerable benefit that setting up a foreign entity could give you – expanding your presence in a new and lucrative market.

18 Burdens a Global PEO Can Relieve for Your In-House HR Department

1. Global expansion complexity 
2. Global payroll administration
3. Employee benefits administration
4. Immigration support and continuous immigration compliance
5. Drafting compliant employment contracts to adhere to local labor and tax regulations in 190 countries
6. Lengthy onboarding 
7. Complex and risky offboarding
8. Background checks
9. Workforce compensation administration
10. Ongoing compliance monitoring and guidance
11. Guidance on best practices of voluntary benefits provisioning
12. Immigration and relocation support for your ex-pat workforce, such as visa sponsorship and securing work permits
13. Lack of institutional knowledge.
14. IP right protection
15. Lack of local and international legal support
16. Convert local contractors into full-time employees
17. Business Transitions: acquisitions, mergers, close-downs
18. The need to deal with multiple global employment service providers.

Difference between an EOR and a PEO. Global Employment Risk Mitigation Strategy

Both PEOs and EORs work differently. However, an EOR is a company that takes on the legal risks of employing your workers, including finance, legal & compliance, and safety risks, saving you from any potential problems down the line. This means that all of the responsibilities that come with being an employer are shifted to them — from tax reporting to handling any injuries or issues on the job. You’ll have none of these hassles but will take responsibility for managing your employees’ tasks and performance.

ATTRIBUTE	PEO	EOR
Employment Model	Co-employer	Sole Employer
Permanent Establishment Factor	Can only work with clients who have a registered in-country (state) entity	Facilitates foreign expansion without setting up an entity
Key Services	Global employment, payroll, benefits, immigration (visa, work permits), mobility	Global employment, payroll, benefits, immigration (visa, work permits), mobility
Responsibilities	Responsible for the entire array of HR functions	Responsible for a portion of HR functions
Tax Administration	Depending on local tax regulations may require taxes to be filed under the client’s taxpayer ID	Files taxes under own Taxpayer ID Number
Payroll Funding	Requires advanced payments from the client	Provides payroll funding
Local Entity Establishment	Required	Optional
Local Entity Ownership	Does not own the entities. Instead, a global PEO partners with a local or global third-party provider. A PEO  does not allow you to hire in other countries where you do not have a local entity.	100 % owns legal entities in the country of service. Allows to hire a workforce in other countries without setting up a business entity
Liability	Shares responsibilities and liabilities	EOR assumes all responsibilities and liabilities. It hires employees in the new country under its local business entity and takes on all of the legal risks.
Legal Advice	Optional	100% compliance required
Global Labour & HR Compliance	Optional	100% compliance required
Insurance	May require the client to provide their own insurance.	Provides general liability (GL) and workers’ compensation (WC) insurance coverage.
Benefits	Provides higher quality  employee benefits at competitive prices	Provides higher quality employee benefits at competitive prices
Employment Agreement	The client must draft and sign the employment agreement with an employee.	Drafts and signs the employment agreement directly.
Pricing Structure	Fixed monthly fee per employee Percentage of payroll plus applicable taxes	Fixed monthly fee per employee Percentage of payroll plus applicable taxes

Global Employment Services: How a Global PEO and EOR can Help You in Business Transition 

Acumen International PEO offers a unique blend of experience and service suite, providing global employment opportunities that are genuinely global-ready. If your company is transitioning, such as going through an acquisition or merger, or experiencing a company liquidation, Acumen International can find a legal and compliant solution to hire your employees—anywhere in the world! Many companies struggle with handling the employees being left behind during these times of transition. It’s common for employees to feel insecure about their future employment prospects, particularly when they have been forced out of their positions.

This can also be problematic for companies, who will likely have open positions that need filling but still have lingering contracts to fulfill. In both cases, having a resource like Acumen International PEO can ensure that the company’s business continues without being negatively affected by the change. When you’re working with Acumen International, we take care of all the paperwork and legal obligations so that you can focus on completing your transition plans. We also handle everything from payroll to benefits and even complete payroll tax administration for all our employees worldwide. This gives employers peace of mind that all their international obligations are fulfilled while allowing them to focus on their transition plans. 

A reduction in the workplace can be a scary time for employees. Global PEO can provide outplacement services to help reduce the risk and ensure that downsized employees have some assistance while searching for a new employer.

Legally Compliant, Cost Effective & Hassle-Free Mode of Market Entry

Acumen International is a global employment (PEO and EOR) company that provides services to expanding businesses. Acumen understands how employers can benefit from outsourcing their human resources management and the challenges an employer faces during this period of change. Acumen can help minimise these risks by offering businesses compliant and secure global employment services.

Acumen International’s global PEO and EOR services can help you by providing faster access to qualified talent in your industry. Our PEO and EOR services can help you get a presence in 190 countries quickly and easily without worrying about compliance with labour and tax regulations.

Are you an employer looking to hire looking for qualified talent in your industry but don’t want to go through the hassle of setting up a foreign legal entity? If so, you may need to partner with a global Employer of Record (EOR).

8 Scenarios When You Might Need a Global PEO and EOR Partner

1. You have hired an employee but are unhappy with your current employment service provider. 
2. You’ve decided to hire an independent contractor instead of a full-time employee, but you’re unsure if you comply with local laws and regulations.
3. You are currently looking to improve the quality of your employment services.
4. You can no longer afford to maintain a whole legal operation via your entity in the target country.
5. You have a temporary project or one that doesn’t require you to open a legal entity in the target country.
6. You need to hire a foreign workforce for your new project.
7. To expand your business, you will need a mix of local and foreign employees. Those who are familiar with the local market will be able to help reduce the learning curve.
8. International employers’ biggest challenge is supporting their organization’s employees when their business restructures or reorganizes. A global Employer of Record can support your business upon mergers, acquisitions or close-downs. When you manage the employee relations aspects during any business transitions (M&As or close-downs), you want to ensure that the process is seamless and 100% compliant.

Get Express Quote

In an era where technology continues to shape the landscape of global business, the need for a human touch remains paramount. Acumen International stands at the forefront of this intersection, championing a human-centred approach to global employment solutions.

At the helm of these efforts is Maria Savva, Global Operations Director, whose insights and leadership have been pivotal in steering Acumen’s course towards enhancing client experience through technology.

Q: Could you share your perspective on the recent global meet-up in Cyprus and how it’s influencing Acumen’s direction, particularly in blending human interactions with technology?

A: The Cyprus meet-up was nothing short of amazing. For many of us, it was the first time we met in person, which brought an invaluable dimension to our teamwork and problem-solving abilities. The CEO’s presentation gave us insight into Acumen’s evolution as a global employment organisation across 190 countries and solidified our vision for the future. This experience united us, building trust and a strong team spirit. It was a crucial step in our journey, especially as we aim to further humanise technology in our operations.

Q: As the Global Operations Director overseeing customer-facing teams, how do your interactions with clients inform and shape Acumen’s technology roadmap?

A: Our approach is rooted in active listening. By engaging directly with our clients, we grasp their expectations and explore how we can exceed them. This interaction is the cornerstone of how we evolve our technology. Feedback varies; while some clients prefer regular updates through calls, others may not wish to dedicate as much time. Regardless of the method, we prioritise understanding their needs, which informs our technological advancements and innovations, like the Global Payroll Calculator. This tool is a reflection of our commitment to not just meeting but exceeding client expectations with our global employment services.

Q: Which of Acumen’s products are you excited about, and why?

A: I’m particularly proud of our Global Payroll Calculator and Navigator. These tools provide specific, country-level legal insights, which are instrumental in making informed decisions when expanding your team internationally. What sets us apart is our holistic approach. We offer a unique combination of human interaction, customised solutions, knowledge, and technological tools, which is something our competitors often lack. This blend ensures that our clients can always reach a real person with their queries, whether they’re about legislation, compliance, or budget concerns, setting us apart as a leading global employment company.

Q: How does the feedback loop with clients help refine Acumen’s services and technological solutions?

A: Our dialogue with clients provides critical insights that help us tailor and refine our technology. For example, integrating data input features specifically requested by our clients’ finance teams allows us to offer bespoke services that significantly enhance their operational efficiency. This ongoing feedback is vital for continuous improvement and innovation in our offerings, cementing our status as a premier employer of record services provider.

Q: What strategies do you employ to ensure Acumen’s team exceeds client expectations through technology and personalised service?

A: Our primary strategy is to be available, transparent,  accountable, and easy to engage with. We foster a culture of mutual learning between our team and clients, which enhances our service delivery. We emphasise on hiring skilled and empathetic individuals who care deeply about clients and our team and understand the significance of their work, which is central to our ethos. This approach not only meets but often exceeds client expectations, underlining our role as a comprehensive Global Employer of Record (EOR).

Q: How important is it for the Acumen team to deeply understand the intricacies involved with global employment?

A: The human experience is indispensable in our line of work. Clients appreciate the ability to speak to a human who not only understands their issue but can also empathise and offer solutions. This level of responsiveness and empathy cannot be replicated by technology alone. It’s the human touch that often makes the difference, providing reassurance and clarity in complex situations, especially in the realm of global employment outsourcing.

Q: Acumen’s long history and global reach give it a competitive edge. Could you discuss the key services you’re particularly proud of?

A: Our extensive experience, covering over 20 years and operations across 190 markets, gives us a profound understanding of global employment intricacies. As one of the first companies in this space, we established a robust framework early on. This foundation, enriched by decades of experience, has only added value to our offerings over the years. We’re able to provide comprehensive services, including Employer of Record and all-encompassing immigration solutions. 

I’m particularly proud of our ability to help our clients deal with complex circumstances, showcasing our adeptness at navigating intricate regulatory landscapes. Our long-standing position and accumulated expertise in the market enable us to deliver unparalleled service and support to our clients, affirming our commitment to excellence and innovation in the global employment sector.

Q: Finally, what achievements under your leadership have made you most proud?

A: First of all, I’m proud of our team. I have an amazing team that supports our company on all levels, including clients, partners, colleagues, and management. Our client-centric approach, combined with our technological tools, has not only sped up processes but also deepened our team’s understanding and increased efficiency, making Acumen a formidable player in the tech and global employment sectors.

The root cause of employee misclassification is often a mix of financial motivations, regulatory complexity, the desire for flexibility, and sometimes a lack of awareness or deliberate avoidance of legal obligations. Addressing these underlying causes requires a clear understanding of employment laws, a commitment to compliance, and, often, a willingness to invest in the proper classification of workers to avoid the long-term risks and costs associated with misclassification.

In this article, we address a significant shift in today’s work environment: the transition of workers from contractor roles to full-time employment. Its aim is to provide organisations with practical advice and strategies for managing this transition effectively, ensuring legal compliance and operational efficiency.

Neglecting the significance of tax compliance can lead to various risks for a business. Not only does it carry the possibility of legal repercussions, but it can also harm a company’s reputation and disrupt its operations. Moreover, compliance plays a crucial role in shaping economies and societal norms. However, achieving compliance is becoming progressively challenging in today’s complex regulatory landscape.

The shift from contractors to full-time employees is increasingly significant in a rapidly transforming global workforce. This shift marks a strategic pivot for businesses worldwide, driven by evolving regulations, changing workforce expectations, and the need for enhanced compliance.

Let’s delve into the crucial trends shaping this transition, offering essential insights for organisations navigating this change:

1. Increasing Regulatory Complexity: Globally, countries are experiencing more intricate compliance requirements. This complexity, varying significantly from region to region, makes ensuring compliance increasingly challenging and necessitates robust governance frameworks.
2. Varied Legal Interpretations and Lack of Clarity: Differences in legal interpretations and insufficient clarity in employment and tax laws can create compliance issues worldwide. This includes varying definitions and standards in labour laws, tax regulations, and employment benefits.
3. Intensified Audits and Regulatory Scrutiny: Increased regulatory scrutiny, technological advancements, and compliance with changing labour laws drive a global trend towards more rigorous audits. These audits often extend beyond basic legislation adherence to include standards like equity, diversity, and inclusion.
4. Evolution of Employee Compensation Structures: Globally, companies are rethinking compensation structures to meet evolving talent expectations and align with business goals. This shift has led to a greater focus from tax authorities on how compensation is structured and reported.
5. Rise in Workforce Mobility: Increased global mobility, including remote work, short-term international assignments, and virtual engagements, presents operational challenges in managing employment tax compliance and payroll obligations.
6. Enhanced Focus on Corporate Tax Risk Management: Tax regulators worldwide focus more on corporate tax risk management and governance, indicating a potential shift towards more stringent workforce tax issues in the future.
7. Need for Adaptive, Tax-effective Governance Frameworks: Organisations must understand their current compliance status and develop governance strategies that align with their business goals and risk appetite. This includes regularly updating tax policies, training teams, and implementing efficient tax technology and controls.
8. Anticipation of Tax Reforms and Legislative Changes: Many countries are likely to experience reforms in workforce taxation, particularly concerning classifications of employees versus contractors and the tax implications of various types of employee compensation.
9. Growing Concern for Employee Rights and Protections: There’s an increasing global focus on improving protections for workers, including independent contractors and contingent workers, which affects how businesses classify and manage different types of workers.

Transitioning Disguised Employees across Jurisdictions

Imagine a Hypothetical Scenario

You’re an employer juggling the complexity of a multinational workforce, and a hidden concern lurks beneath the surface—disguised employees. This raises critical questions: Why resort to this strategy, and how daunting is the path to compliance? Let’s delve into the motivations, triggers for change, and intricate landscape awaiting a transition project.

Why Contractors as Disguised Employees? (Motives)

1. Cost Savings: Avoiding employer taxes and benefits for disguised employees can translate to significant short-term financial gains.
2. Flexibility: Contractors offer freedom from rigid employment structures and easier termination than formal employees.
3. Specialised Skills: Securing specific skills through contractors bypasses lengthy recruitment processes for temporary needs.
4. Tax Optimisation: Companies with a global presence can gain a strategic advantage by utilising contractors across multiple jurisdictions with lower tax rates.

Triggers for Transitioning

1. Legal and Regulatory Risks: Increased scrutiny of disguised employees can expose companies to heavy penalties and reputational damage.
2. Employee Dissatisfaction: Disparity in benefits and rights between contractor and employee classifications can lead to resentment and legal challenges.
3. Talent Management Issues: Difficulty attracting, managing, and retaining top talent under contractor arrangements can hamper long-term growth.
4. Operational Inefficiencies: Lack of standardised processes and integration for disguised employees can create administrative burdens.
5. Lack of in-house resources to manage global talent and ensure legal compliance.
6. Company restructuring.

Transitioning to Compliance: What to Prepare for

1. Cost Impact and Unplanned Extra Cost: Increased payroll costs due to employee withholding taxes, employer social security contributions, and statutory benefits (varying across jurisdictions).
2. Termination Management: Navigating notice periods, severance payments, and potential legal claims during employment transition (also differing by country) and getting consent to the transfer as per legal requirements (depending on the country)
3. Project Framework: Develop a comprehensive plan with cost estimations, legal considerations, communication strategies, and timelines for each jurisdiction involved.
4. General red tape may affect the overall project timelines.

A Roadmap for a Successful Contractor-into-Employee Transition

Navigating this transition is not a mere checkbox exercise but a strategic move towards a stable, sustainable, and ethical workforce. By understanding the motivations, triggers, and consequences, you can chart a course towards compliance, mitigating risks while reaping the benefits of a truly engaged and empowered global workforce.

Avoiding Potential Threats

1. Under-taxation: Ensure accurate classification and tax payments to avoid penalties and reputational damage.
2. Worker Misclassification: Mitigate employee misclassification risk by ensuring contractors meet genuine self-employment criteria.
3. Permanent Establishment Risk: Manage cross-border operations to avoid permanent establishment risk and unintended tax liabilities in foreign jurisdictions.
4. Potential Penalties: Proactively address compliance issues to avoid financial repercussions and legal disputes.
5. Damaged Reputation: Maintain ethical practices and transparency to safeguard brand image.

Achieving Sustainable Goals

1. Business Security: Foster legal and operational stability by adhering to employment regulations.
2. Sustainability: Build a long-term, secure workforce through fair practices and talent development.
3. Talent Retention: Attract and retain top talent by offering competitive benefits and opportunities.
4. Fair Pay: Pay employees equitably, regardless of classification, to improve morale and productivity.
5. Scalability.

Growing businesses must compare and contrast key global employment variables across different countries when transitioning from contractors to full-time employees. By examining Payroll and Tax Implications, Statutory Benefits and Contributions, and Termination Conditions, specifically in Germany, Poland, France, the Philippines, and Argentina, we can gain valuable insights into how these variables differ and their consequent impact on an organisation’s financial planning and overall strategy.

This comparative analysis is not just about understanding individual costs; it’s about viewing these variables through a broader lens to appreciate their cumulative effect on the bottom line and strategic operations.

The data provided in these tables is essential for businesses operating across borders. They compare key employment factors in different countries, helping companies to navigate the financial liabilities and legal obligations in diverse markets. With this comprehensive overview, employers can better anticipate the challenges and opportunities of global expansion, ensuring a balanced approach to workforce management that aligns with both financial realities and long-term goals.

Payroll and Tax Implications Comparison

Country	Employer Burden (%)	Employee Tax Rate (%)	Source
Germany	Approx. 20-21.5%	Approx. 14-45%	BMF – Federal Ministry of Finance
Poland	Approx. 17-18% (excl. 2.25% ZUS)	Approx. 17-32%	ZUS – Social Insurance Institution
France	Approx. 28-31%	Approx. 15-45%	URSSAF – General Social Security Office
Philippines	Approx. 13.5-16%	Approx. 0-35%	BIR – Bureau of Internal Revenue
Argentina	Approx. 34-39%	Approx. 5-35%	AFIP – Federal Administration of Public Revenue

Statutory Benefits and Contributions Comparison

Country	Healthcare	Pension Contributions	Other Benefits
Germany	Mandatory	Mandatory	Unemployment, Long-term care insurance
Poland	Mandatory	Mandatory	Disability, Sickness
France	Mandatory	Mandatory	Family, Housing, Social security
Philippines	Mandatory	Mandatory	Disability, Death, and Pension Benefits
Argentina	Mandatory	Mandatory	Family Allowances, Unemployment Insurance

Termination Conditions Comparison

Country	Notice Period	Severance Payment	Source
Germany	4 weeks to 7 months	Up to half a month’s salary per year of service	BMF – Federal Ministry of Finance
Poland	2 weeks to 3 months	Severance based on tenure and reason for termination	ZUS – Social Insurance Institution
France	1 month to 2 months	Legal minimum of one-fifth month’s salary per year of service	URSSAF – General Social Security Office
Philippines	30 days	One month’s salary or half a month per year of service, whichever is higher	BIR – Bureau of Internal Revenue
Argentina	15 days to 2 months	One month’s salary per year of service	AFIP – Federal Administration of Public Revenue

Action Plan for Transitioning Contractors to Full-Time Employees across Multiple Countries

Step 1: Audit of Current Employment Landscape

• Gather Data: Collect comprehensive data on all contractors currently engaged in different countries, including their roles, positions, and contract terms.
• Assess Compliance Risks: Evaluate the current contractor arrangements for compliance risks, particularly on misclassification issues.
• Identify Key Transition Candidates: Based on the audit, identify contractors who should be transitioned to full-time roles to mitigate risks or align with strategic goals.

Step 2: Transitioning Process – Estimating Costs

• Develop Cost Models Use Table:
  • Global Salary and Tax Implications to estimate changes in payroll costs.
  • Calculate potential employer burden and employee tax rates for each jurisdiction.
• Benefits and Contributions Analysis:
  • Assess additional costs for statutory benefits using Table: Statutory Benefits and Contributions.
• Termination and Severance Assessment:
  • Evaluate potential costs for terminations or severance using Table: Termination Conditions.
• Total Cost Estimation:
  • Compile the data to provide a comprehensive cost estimation for the transition.

Step 3: Weighing Choices – Financial and Legal Planning for C-Suite

• Compare Contractor vs. Full-Time Costs: Analyse the financial impact of transitioning contractors to full-time employees versus maintaining current arrangements.
• Legal Compliance Check: Ensure the transition plan adheres to each country’s local employment laws and tax regulations.
• Strategic Alignment: The transition plan should be aligned with the company’s broader strategic goals, such as talent retention or market expansion.

Step 4: Implementation Plan

• Draft Transition Agreements: Prepare legal documents for transitioning identified contractors to full-time roles.
• Communicate with Stakeholders: Communicate the transition plan to all relevant parties, including contractors, management, and HR teams.
• Set Up Payroll and Benefits: Align with HR and payroll teams to integrate new full-time employees into existing systems.

Step 5: Ongoing Compliance and Management

• Regular Audits: Conduct regular audits to ensure compliance with employment and tax laws.
• Adjustments and Optimisation: Continuously review and optimise the employment structure in response to changes in laws, business needs, and workforce dynamics.

Step 6: Review and Feedback

• Gather Feedback: Collect feedback from newly transitioned employees and management to assess the effectiveness of the transition.
• Evaluate Impact: Assess the impact of the transition on business operations, compliance, and employee engagement.
• Plan for Future Transitions: Use learnings to refine the process for future transitions.

Global Payroll Calculator – Your Precision Tool for Global Employment Cost Analysis

The Global Payroll Calculator (GPC) offers a sophisticated solution for instantly calculating employment costs across 190 countries, streamlining your global hiring strategy and ensuring cost-effective decisions.

Key Features & Benefits

• Instant Cost Calculations: Quickly determine total employment costs, factoring in real-time tax rates and benefits for local and foreign talent in 190 countries.
• Precision & Clarity: Achieve precise payroll calculations with detailed breakdowns of all payroll variables, ensuring transparency and preventing unexpected employment costs.
• Cross-Country Comparisons: Utilise GPC’s capability to perform instant comparisons between countries, helping you identify the most advantageous locations for hiring.

Core Capabilities

• Total Employment Cost Analysis
  • Monthly and yearly costs.
  • Gross-to-net and net-to-gross calculations.
  • Detailed breakdowns, including employer liability and employee taxes.
• Full Tax Breakdown
  • Comprehensive coverage of social contributions, personal income tax, and automated tax caps.
  • Employer and employee tax splits with allowances and holiday entitlements.
• Built-in Compliance
  • Ongoing validation against trusted government sources across 190 countries.
  • Updates in real-time to reflect the latest tax and labour laws.

Advantages of Global Payroll Calculator for Employers 

• Manage complex global payroll budgets effectively.
• Identify tax-friendly, cost-effective global talent hotspots.
• Ensure compliance with international regulations to avoid legal issues.

Unique Solutions for Global Expansion Challenges

• Express Global Employment Support: Backed by 20+ years of Acumen International’s expertise, the Global Payroll Calculator is integrated with our global EOR solutions to support your international workforce management.
• Robust Methodology: Standardises diverse data into a unified format, enhancing decision-making clarity across multiple jurisdictions.

With Global Payroll Calculator, you gain a powerful tool designed to optimise your global employment strategies and ensure that your international operations are cost-effective and compliant.

Closing Words

Transitioning contractors to full-time employees requires careful strategic planning and compliance with evolving regulations. The insights offered here serve as a guide for businesses looking to navigate this transition smoothly. If you need further help transferring contractors into full-time employees, contact Acumen International.

For more information, visit Acumen International.

Contents

• Introduction
• What is Humanised Technology?
• How we maintain a truly customer-focused EOR business.
• Interview with the CEO Nick Ghanzha, Navigating the Future of Work.
• Spotlight on Portugal: A Hidden Gem for Tech Talent. 
• What’s New in Global HR Legislation.
• Summary & Close

---

Introduction

Welcome to our March newsletter, where we’re exploring a theme close to our heart and critical to our mission: Humanised Technology. As the digital age propels us forward, Acumen International stands at the crossroads of innovation and personalised service, championing a service model that marries cutting-edge technology with the invaluable element of human touch.

This month, we’re busy developing groundbreaking technology innovations designed to improve efficiency and ensure our clients feel supported, understood, and valued at every step. 

Join us in discovering how technology and human focus converge at Acumen for a truly unparalleled service experience.

---

What is Humanised Technology?

Following our global meet-up in Cyprus, we’re thrilled to share how our technology roadmap is shaping the future of global employment services. Humanised Technology at Acumen means blending our technological advancements with deep human insight and expertise. Our focus remains steadfast: to enhance, not replace, the human element in our services.

Maria Savva , our Global Operations Director, puts it best: 

“We offer companies the chance to reach out to employees globally with a personal touch that understands the needs of our clients deeply. We pride ourselves on exceeding expectations through our commitment to excellence and personalised care.”

Read on to dive deeper into this exciting topic. 

---

Insight: Maintaining a Customer-Focused EOR Business

In a world veering towards impersonal tech-driven solutions, Acumen International stands out by maintaining a truly customer-focused approach. Our unwavering commitment to our customers has defined our 23-year journey as a client-first focused business. We match technological capabilities with unparalleled support, ensuring our interactions foster solid partnerships throughout clients’ global employment journeys.

In our blog on How We Maintain a Truly Customer-Focused EOR Business, we highlight key insights that underscore our dedication:

• The Virtue of Organic Growth: Our growth is driven by customer revenue, emphasising sustainable development and agility. This approach ensures that our innovations meet the real-world needs of our clients, aligning with our commitment to prioritise customer satisfaction. Our CEO, Nick Ganzha, states, “We are a human-focused business supported by technology where we can tailor our solutions to the specific client needs and provide them with the solutions no platform can provide.”
• Prioritising Customers in the SaaS Journey: The evolving HR tech landscape underscores the importance of a customer-first strategy. Our solutions are designed to effectively address specific customer challenges, fostering loyalty and ensuring sustainable competitive advantage.
• The Centrality of Customer Needs: Understanding and addressing client challenges is pivotal. Our tailored solutions and support are aimed at enhancing the customer buying experience, fostering a culture of trust and reliability.

As we forge into 2024, we are poised to launch new innovative tools that perfectly balance advanced technology with our unmatched personalised support. 

📖 Read the full blog here >>> Read More

---

Interview: Navigating the Future of Work with Nick Ganzha, CEO

In an enlightening discussion, Nick Ganzha , CEO of Acumen International, shares the company’s strategic vision and innovative approaches in the realm of global employment. 

Here are the condensed highlights of our conversation:

• Cyprus Leadership Meet-Up: The primary objective was to embrace Acumen’s shift towards humanised technology, focusing on tailoring solutions to specific client needs. It served as a reunion to celebrate achievements, welcome new members, and outline actionable steps to improve Employer of Record Services.
• Global Remote Workforce Transition: Here, Nick highlights the viability of remote work, emphasising the need for strategic human capital management and the importance of corporate social responsibility, especially in response to global crises.
• Future Employment Trends:
• The evolution of PEOs/EORs towards providing strategic business support.
• The shift towards flexible, hybrid work models and the central role of trust within organisations.
• The critical integration of technology to support human-centric productivity.
• Adapting Strategies:
• Emphasising technology that supports human efforts and addressing global workforce challenges.
• Navigating economic uncertainties with resilient global employment strategies and tackling skill shortages.
• Vision for Global Employment:
• Transforming global mobility programs and emphasising skill-based hiring.
• Adapting to employment shifts with flexible, compliant strategies.
• Leveraging technology to enhance business competitiveness.

🎤 Read the full interview with Nick Ganzha >>> Read now

---

Spotlight on Portugal: A Hidden Gem for Tech Talent 

Portugal is emerging as a prime destination for tech talent, blending cost efficiency with a vibrant culture and exceptional work-life balance. Here’s why Portugal stands out in the global tech landscape, and how Acumen’s Solutions are perfectly poised to support your hiring needs:

Why Portugal is Your Next Tech Talent Hub:

• Cost Benefits for Employers: Save on taxes and incorporation costs, maximising your budget to attract top-tier talent without excessive overheads.
• Work-Life Harmony: Portugal’s culture fosters productivity and creativity thanks to its enviable lifestyle and work-life balance.
• Local Talent Commitment: With 50% of IT professionals preferring to stay in Portugal, employers have access to a pool of dedicated local talent.
• Competitive Salaries in a Lower Cost Environment: The average salary for tech professionals (46K EUR) in Portugal goes further due to the lower cost of living, enhancing your return on investment.

Portugal not only offers a strategic advantage with its burgeoning tech talent pool but, combined with Acumen’s comprehensive Global EOR and Contractor Solutions, makes scaling your team or launching new projects more effective and efficient than ever.

🇵🇹 Learn more about Portugal >>> Discover now

---

Legislation: What’s New in Global HR Legislation

Stay informed with the latest developments in global HR legislation to ensure your business remains compliant and ahead of the curve.

🇦🇺 Australia Introduces ‘Right to Disconnect’

Australia is set to empower its workforce with a ‘right to disconnect’ law, aiming to protect employees from working unpaid overtime and ensuring they are not obligated to be online outside working hours. This move is part of a broader effort to enhance work-life balance and is expected to come with fines for non-complying employers.

• Employer Impact: Encourages healthy work-life boundaries, potentially increasing employee satisfaction and retention.
• Employer Actions: Review and adjust work policies to comply with the new legislation, ensuring respectful communication practices outside of standard working hours.

🇦🇺 Read more about Australia’s right to disconnect.

🇸🇰 Slovakia Streamlines Employment for Third-Country Nationals

The Slovak government is easing the process for employing third-country nationals (TCNs) in the transportation and industry sectors, increasing the total number of employment visas issued. This initiative is designed to address labour shortages by facilitating the recruitment of foreign talent.

• Employer Impact: Expanded talent pool and simplified hiring process for employers in critical sectors.
• Employer Action: Consider leveraging this new policy via Acumen’s PEO Service to support hiring Expats in Slovakia

🇸🇰 Discover the details of Slovakia’s employment process streamlining.

Hungary’s Immigration Law Overhaul

Hungary’s new immigration law, effective March 1, introduces 24 types of residence permits, including eight dedicated to employment. It also tightens conditions for TCNs and eliminates the flexible “residence permit for other purposes.”

• Employer Impact: More defined pathways for hiring international talent but with increased regulatory complexity.
• Employer Actions: Assess the new categories to identify applicable permits for future hires and adjust recruitment strategies accordingly. Acumen can support with work permits and immigration support. 

🇭🇺 Read about changes in Hungary’s immigration law.

---

Summary & Close

As we embrace the synergy of technology and personalised support, Acumen International reaffirms its dedication to empowering clients while ensuring they feel valued and supported. This month, we invite you to discover the difference that humanised technology can make in your global employment journey.

Stay updated with the latest from Acumen International.

Thank you for being with us this month. Here’s to pioneering a future where technology enhances human connection, making global employment more efficient and human.

In a revealing conversation, Nick Ganzha, CEO of Acumen International, shares insights into the company’s innovative approach to global employment and technology. He delves into Acumen’s strategic vision, its response to the challenges of remote work, and the trends shaping the future of the global workforce.

Q: Can you outline the main objectives of the recent leadership meet-up in Cyprus?

A: Our primary goal was to introduce Acumen’s shift towards humanised technology, defining our objectives and roadmap. We are a human focused business supported by technology where we can tailor our solutions to the specific client needs and provide them with the solutions no platform can provide.

It was also a moment to reunite our team, celebrate our long-awaited reunion, welcome new members, and reflect on our remote working experiences. We also outlined actionable steps to improve our overall Employer of Record Services based on our comprehensive experience in the Global EOR market.

Q: After such an unprecedented few years, how did it feel to meet up with the team again?

A: Meeting with the team again stirred a complex blend of emotions. It felt as though everything had changed yet remained the same. The team’s unwavering dedication and level of engagement were palpable, but there was an underlying need to realign these qualities with our new strategic goals and the evolving market demands. 

To evolve the concept of unity, it was more than just unveiling a new strategy and roadmap. It involves engaging with and listening to our global team’s feedback and their perceptions of market needs. This approach has proved immensely effective in transforming our team into passionate advocates and active participants in implementing our ideas, particularly our shift towards a technology orientation. We discussed how each individual and department could actively contribute to fostering a digital-first culture. This initiative aims to develop an organisation that is not only adaptive and digitally fluent but also deeply human-centric, ensuring that every voice is heard and valued.

This reunion was a poignant reminder of the resilience, adaptability, and collective spirit of our team. It reinforced the importance of embracing change, fostering open communication, and uniting behind a shared vision. As we look to the future, it’s clear that our journey towards integrating technology and human-centricity is not just about responding to immediate challenges but shaping the future of global employment in a way that is inclusive, innovative, and aligned with the evolving needs of the workforce and the market.

Q: What have you learned from the transition to a global remote workforce, and how will this shape your services moving forward?

A: The shift to a global remote workforce highlighted the value and staying power of such a model. The geopolitical challenges, especially the Russian war against Ukraine, tested our resilience and adaptability. 

The transition has been illuminating on multiple fronts. Here are the key learnings and how they will influence our future direction:

• Global Remote Workforce Viability:
  • The shift affirmed the sustainability and benefits of a global remote workforce, emphasising that this trend will persist.
  • Leveraging opportunities across countries, we recognised the immense value and potential of tapping into a global talent pool.
• Rethinking the People Business:
  • The concept of (Global) PEO was re-evaluated, transforming into a leverage to retain the key dispersed personnel. 
  • We faced an unprecedented Ukrainian talent exodus and responded by providing solutions for employing and re-employing talent globally, becoming the #1 go-to partner for Ukrainian businesses and a primary international employment provider.
• CSR and Personal Responsibility:
  • My commitment to corporate social responsibility intensified, leading to significant participation in CSR initiatives supporting Ukraine.
  • This personal responsibility transformed into a broader commitment, rallying our employees around these causes.
• Testing Our Own Solutions:
  • Amid the war, we were able  to test our EOR solutions first-hand, employing our staff through our services in various locations. This experience broadened our Global EOR expertise, proving the effectiveness of our services under extreme conditions.
• Going Global as a Survival Strategy:
  • The necessity of going global, once a choice, has now become a survival strategy for businesses.
  • This realisation underpins our strategy moving forward, emphasising our role in guiding businesses through arising upheavals and global employment complexities
• Future Direction:
  • Our experiences will inform our product and service development, offering insights to our global clientele on navigating global employment challenges.
  • We aim to share our journey and solutions, ensuring businesses don’t have to navigate these challenges alone—Acumen is there to guide them.

Our approach going forward is to harness these learnings, continuing to innovate and adapt in a way that supports our clients and their employees around the world.

Q: Can you share insights or trends from the meet-up that will influence the global employment landscape?

A: The global employment landscape is on the cusp of significant transformation, with several key trends emerging from our discussions:

• Evolution of Professional Employer Organisations (PEOs): PEOs are transitioning from providing purely operational support to playing strategic roles within businesses. The 3Sixty Insights Global Executive Advisory Council highlights this focusing on the shift from tactical work in human capital management to strategic approach. This is about a (Global) PEO/EOR that has the expertise to help businesses approach their HCM strategically. It evokes a broader concept of a PEO not only taking care of operational HR for employers and mitigating risk, but also capable of transforming their entire strategic vision, decision-making and execution on their organisational strategy wherever it intersects with the company’s people.
• Flexible and Hybrid Workforces: The tenure of full-time employees is reducing, with the average being one to two years, whereas sought-after consultants are extending, signalling a trend towards more flexible, hybrid work models. This adaptability in the workforce is driving changes, making flexibility a critical component of modern work environments.
• Trust as a Core Value: Trust is becoming a central element of organisational success, not just in client relationships but also internally. The 2024 Global Talent Trends study by Mercer emphasises this, noting that fostering a climate of trust through fair pay, equity, and inclusion is top of mind for leaders in 2024 and beyond. This trend indicates a broader shift towards more transparent, equitable, and inclusive workplace cultures.
• Technological Integration and Human-Centricity: The integration of technology and AI in the workplace is advancing rapidly, with a significant impact on productivity and employee engagement. A LinkedIn poll by The HR World suggests that “8 in 10 use AI to assist their work,” highlighting the growing reliance on technology to support various work processes. However, the emphasis remains on driving human-centric productivity, ensuring that technological advancements enhance rather than replace the human element.
• Addressing Global Workforce Well-being: The well-being and mental health of the globally distributed workforce are gaining prominence. Organisations are increasingly focusing on creating supportive environments that cater to the diverse needs of their employees, recognising the importance of mental health in achieving overall productivity and satisfaction.

These trends suggest a future where businesses must be agile, embracing new operational models and technologies while maintaining a strong focus on trust, inclusivity, and the well-being of their workforce. Here at [Acumen International], we’re poised to support businesses through these changes, offering strategic insights and solutions tailored to the evolving global employment landscape.

Q: How does Acumen plan to adapt its strategies in response to these trends?

A: As we navigate the complexities of the global employment landscape, we are focused on adapting our strategies to address both current trends and the underlying challenges of the labour market. Our approach encompasses several key dimensions:

• Embracing Technology with a Human Focus: Recognising the integral role of technology in today’s work environments, we are committed to developing technological solutions that not only meet our client’s needs but also enhance and support human efforts. Our aim is to ensure that technology serves humanity, reinforcing the value of human input rather than diminishing it. This perspective is crucial in addressing challenges presented by economic cycles, company growth, and the changes that accompany mergers and acquisitions.
• Addressing Labour Market Imbalances: The International Labour Organization (ILO) has highlighted the structural imbalances in the world’s labour market, a view supported by insights from the Geopolitical Futures article on “Employment Returns to Pre-Pandemic Levels.” Global employment may have bounced back to pre-pandemic figures, yet the persistence of labour market imbalances, slowing productivity growth and the increasing number of workers in extreme poverty underline the structural issues facing the global workforce. In response, Acumen is focusing on strategies that not only bridge these imbalances but also anticipate and mitigate the impacts on both workers and organisations.
• Navigating Economic and Geopolitical Uncertainties: The current geopolitical landscape, marked by conflicts and trade tensions, contributes to the uncertainty affecting the global labour market. These factors, coupled with aggressive actions by central banks and the deceleration of global economic growth, underscore the need for resilient and adaptable employment strategies. We are poised to guide businesses through these uncertainties, offering solutions that foster stability and loyalty among workers and organisations alike.
• Tackling Productivity and Skill Shortages: Despite the return to pre-pandemic employment levels, concerns about labour and skills shortages persist. The exit of a significant segment of youth from the labour market and the challenges of reintegration highlight the need for innovative employment solutions. We can help our clients identify and fill these skill gaps, leveraging our [global employment solutions] to address labour shortages and enhance productivity.
• Future Proofing Against Economic Slowdowns: With the global economy expected to slow further, the resilience of the labour market is more critical than ever. Acumen’s [global employment services] are designed not only to weather these slowdowns but also to emerge stronger, with a focus on sustainable growth.

By focusing on technology integration with a human-centric approach, we aim to maintain and strengthen the loyalty and resilience of workers and organisations worldwide.

Q: Finally, how does Acumen envision its role in shaping the future of [global employment] and supporting businesses through these changes?

A: Acumen International is strategically positioned to lead and shape the future of [global employment] by addressing and anticipating the evolving needs of the [global workforce] and the businesses that rely on it. Our approach is multifaceted, focusing on several key areas:

• Redefining Global Mobility Programs: We are committed to transforming global mobility programs from reactive to proactive strategies. This involves streamlining and simplifying immigration processes and making talent attraction, acquisition, management, and retention more efficient. The goal is to turn these programs into strategic advantages for businesses, enabling them to be more agile.
• Emphasising Skill-Based Hiring: Echoing the sentiment from a Forbes article on “The Freelance Revolution In 2024,” we recognise the growing importance of freelancers and the shift towards a more flexible workforce. This aligns with our belief in hiring based on skills, not geography, allowing businesses to tap into a global talent pool and adapt to market needs with a blend of permanent and temporary workers.
• Addressing Employment Shifts and Contractor Convergence: As noted in one of our latest posts about freelance revolution and hybrid workforces, the opportunities hybrid teams open up for global employers  are becoming increasingly significant. This shift, driven by evolving legal regulations and changing workforce expectations, necessitates enhanced compliance and flexibility in talent management strategies. Our EOR and Contractor Solutions are designed to provide businesses with the flexibility and growth at all stages needed to thrive in the current economic climate.
• Leveraging Technology for Efficiency: With the development of our industry-leading technology solutions, leveraging AI and tapping into expert networks, we offer solutions that enhance efficiency and help businesses become more competitive and attractive as employers.

Our goal is to provide and hone our solutions and product portfolio, allowing businesses to access a global talent pool and offer compelling employee value propositions, making them the best companies to work for in an ever-evolving global market.

This conversation with Nick Ganzha highlights Acumen International’s proactive approach to global employment challenges and its commitment to innovation and human-centric solutions. As the world of work continues to evolve, Acumen’s strategies and insights offer valuable guidance for businesses navigating the complexities of the global workforce.

Globalization has resulted in national economies and markets becoming intertwined. Due to a surge in economic integration in recent years, it has become evident that current international tax regulations, established over one hundred years ago, are no longer adequate. 

This lack of adaptation to modernity allows for BEPS (base erosion and profit shifting), which undermines trust in taxation systems and creates inequalities as profits are not taxed accurately. Tax policymakers and governments must act quickly to address this problem and restore confidence in their tax systems. They can do this by ensuring taxes are collected in the locations where value is generated.

Currently, regulations are the primary method used to define whether or not a company is engaged in PE activity. Tax treaties may also specify what constitutes a Permanent Establishment (PE). In addition, some countries tax laws may specify what activities constitute a permanent establishment (PE) for their jurisdiction.

What Is a Permanent Establishment?

Harmonization of tax laws has led to many countries adopting the Organisation for Economic Co-operation and Development Model Tax Convention, which puts certain restrictions on when businesses will be considered permanent establishments (PEs) in another country. In brief, an organization will have a permanent establishment (PE) if any of the following applies:

1. The business has a physical presence in a foreign country.

2. The business is regularly present through employees or agents.

3. A sale is made from a fixed place of business.

4. The business is engaged in continuous and systematic activities in the foreign country.

Understanding the Concept of Permanent Establishment

Permanent Establishment (PE) is a concept in international taxation that refers to a fixed place of business through which an enterprise carries out its business activities. A PE can be a branch, office, factory, warehouse, or any other fixed place of business where the enterprise carries out its business activities, either wholly or partially.

When an enterprise operates through a (Permanent Establishment) PE in a country other than its home country, it may become subject to the tax laws of that country. This means that the income generated by a PE is potentially taxable in the country where the business is located and in the country where the business is incorporated.

Only income attributable to local activity should be subject to local tax, which can be determined through a profit attribution exercise. However, consideration must also be given to whether there is an applicable double tax treaty between the two countries.

Generating Taxable Income

For example, suppose you have a sales force that calls on customers in a foreign country on behalf of your organization. In that case, that presence is considered a Permanent Establishment, and you must pay tax for the income your salespeople generate.

If an enterprise is found to have a PE in a foreign country, it may be subject to tax on the profits earned in that country, as well as penalties and interest for failing to comply with the tax laws of that country.

To avoid permanent establishment risk, enterprises must carefully assess their business activities in foreign countries and ensure that they do not create a fixed place of business or exceed the allowable time limit for employee presence in that country.

They should also seek professional advice to understand the tax laws of foreign countries where they operate.

Get Express Quote

Permanent Establishment Management Control

Permanent Establishment (PE) Management Control refers to the extent to which the enterprise maintains direct control over the business operations in a foreign country.

If an enterprise wants to maintain direct control over everything from accounting procedures to staff management, it may choose to establish a foreign legal entity. This option allows the enterprise greater control over its operations in the foreign country, including hiring and managing employees, implementing its accounting procedures, and maintaining its banking relationships.

However, establishing a foreign legal entity can be costly and time-consuming. In addition, it requires the enterprise to comply with the legal and regulatory requirements of the foreign country, which may differ significantly from those of the home country.

Alternatively, an enterprise may outsource some operations, except for managing assets and collecting profits. This option allows businesses to focus on their core competencies while outsourcing non-core activities to specialised service providers.

Permanent Establishment Risk: Addressing the Concerns

Permanent Establishment (PE) requires the most due diligence in tax risk management.

You may think you can conduct business overseas without registering a legal entity, but you would be wrong. You might need to register your business even if you only send an employee on a temporary assignment or establish a small promotional office. Failing to do so can result in severe consequences.

Different countries have different tax laws, and a multinational company must consider all of these when conducting business. The tax authorities of a particular country can determine which elements of the company’s economic activity take place in a particular country and how much profit is attributable to them.

This process can be complex, but ensuring the company complies with all applicable laws is essential.

25 Questions to Help You Assess Permanent Establishment Risk

Here are some additional questions that can help assess and avoid Permanent Establishment (PE) Risk:

1. Have you identified all the business activities that your company will perform in the target country?

2. Will your company have a fixed place of business in the target country, such as an office, warehouse, or factory?

3. Will your employees or contractors spend significant time in the target country?

4. Will your company have the authority to sign contracts or make decisions for your clients or customers in the host country?

5. Will your company have the authority to negotiate or conclude contracts for your clients or customers in the target country?

6. Will your company have the authority to bind your clients or customers in the target country?

7. Will your company be able to manage or supervise employees or contractors in the target country?

8. Will your company have the authority to provide after-sales services or technical support in the target country?

9. Will your company be able to receive payments or handle financial transactions in the target country?

10. Will your company have the authority to conduct research and development activities in the target country?

11. Will your company have the authority to control the use or disposal of assets in the target country?

12. Will your company have the authority to make decisions on pricing, marketing, or distribution of goods or services in the target country?

13. Will your company have the authority to manage or oversee the supply chain in the target country?

14. Will your company have the authority to perform any other significant business functions in the target country?

15. Have you reviewed the tax laws and regulations of the target country to understand the criteria for determining whether a PE exists?

16. Have you reviewed the tax treaty between your home country and the target country to understand the provisions related to PE?

17. Have you considered the potential impact of transfer pricing regulations on your operations in the target country?

18. Have you assessed the potential penalties and fines for non-compliance with tax laws and regulations in the target country?

19. Have you considered the potential reputational risks associated with being deemed to have a PE in the target country?

20. Have you established a risk management plan to address PE risk, including strategies for minimizing risk, monitoring compliance, and managing potential disputes with tax authorities?

21. Are your employees in the target country extensively involved in sales or contract negotiations? They don’t need the power to sign contracts to qualify as being involved in contract negotiations.

22. Do your employees’ job titles or descriptions pertain to revenue generation? 

23. Do your employees receive compensation related to sales, such as commissions or bonuses, for meeting sales targets?

24. Do they receive compensation based on sales, such as commissions or bonuses for their sales performance?

25. Have you reviewed the contractual agreements between your company and your clients or customers in the target country to understand the scope of your authority and obligations and whether they could create a PE?

Get Express Quote

Attributable Activity Test to Determine Permanent Establishment

Let’s explore how to avoid permanent establishment risk using Global Employer of Record services. Unlike the standard “permanent establishment” definition, which focuses on whether an entity is carrying on business through a fixed place of business, the definition of permanent establishment for income tax purposes is broader. There are two main tests for determining if an organization has a PE.

The Attributable Activity Test is one of the criteria used to determine whether a foreign company has a Permanent Establishment (PE) in a host country for tax purposes. This test determines whether the activities performed by the foreign company in the host country are sufficient to create a PE, even if there is no physical presence or fixed place of business in the host country.

The Attributable Activity Test focuses on the activities “attributable” to the foreign company in the host country. These activities are those that are carried out on behalf of the foreign company by its employees, agents, or other representatives in the host country.

To determine whether the foreign company has a PE under the Attributable Activity Test, the tax authorities will typically consider the following factors:

1. Whether the activities performed by the foreign company in the host country are “core” activities that are essential to the company’s business.
2. Whether the activities are performed for a “sufficient” period, there is no fixed rule for what constitutes a “sufficient” period. Still, it generally means that the activities must be ongoing and regular rather than occasional or sporadic.
3. Whether the activities are performed with a “sufficient” degree of authority, the foreign company’s employees, agents, or other representatives must have the power to make decisions on behalf of the company that affect its business operations in the host country.
4. Whether the activities are performed with a “sufficient” degree of continuity. To establish a significant connection between the foreign company and the host country, the activities must be performed over a long period.

Activities that Can Create a Permanent Establishment under the Attributable Activity Test

• Negotiating contracts or concluding sales agreements on behalf of the foreign company.
• Providing technical assistance or after-sales support services to customers in the host country.
• Performing marketing or advertising activities directed at customers in the host country.
• Conducting research and development activities related to the company’s business operations in the host country.
• Providing management or supervisory services to local employees or agents of the foreign company.
• Providing training or education services to customers or employees in the host country.

It is important to note that the Attributable Activity Test is only one of several criteria tax authorities may use to determine whether a foreign company has a PE in a host country. Other factors that may be considered include the existence of a fixed place of business, the level of control and management exercised by the foreign company over its operations in the host country, and the nature and extent of the company’s activities in the host country.

5 Ways Minimize PE Risks with a Global Employer of Record

As a business owner, you may feel overwhelmed by the tax implications of expanding your business overseas. However, new ideas exist to reduce complexity and ease the burden on busy entrepreneurs.

Using a Global Employer of Record (EOR) can be an effective way for multinational employers to prevent or address Permanent Establishment (PE) risks. This third-party global employment solution enables compliance with local employment and tax laws while avoiding the establishment of a legal entity and taxable presence in the country.

1. No Establishment of a Foreign Legal Entity

The Global EOR model enables multinational employers to engage workers in different countries without establishing a legal entity. This helps to reduce the risk of creating a taxable presence in the country and triggering a PE.

2. Compliance with Local Employment Laws

The Global Employer of Record (EOR) handles employment’s legal and administrative aspects, including compliance with local labour laws and regulations. This ensures that the client company is not inadvertently creating a PE through non-compliance with local employment laws.

3. Tax Compliance

The Global Employer of Record (EOR) can also handle tax compliance, including payroll taxes and social security contributions. This ensures the company is not creating a PE through non-compliance with local tax laws.

4. Permanent Establishment Risk Mitigation

Using a Global Employer of Record (EOR), talent engagement model can help multinational employers mitigate the risk of a PE by ensuring that all legal and tax obligations are met. This helps to minimize the potential negative impact on the company’s reputation, financial statements, and regulatory compliance.

5. Flexibility of Global Moves

The Global Employer of Record (EOR) model allows multinational employers to engage workers flexibly in different countries. This helps minimize the risk of creating a PE by permanently establishing a business presence in the country.

Sample Employment Tax Calculation

How to Pro-actively Address Challenges of Permanent Establishment Risk

The challenge of Permanent Establishment (PE) risk can be addressed through a combination of preventive and corrective measures. Below are some suggestions to resolve the fundamental challenges of PE risk:

1. Conduct a comprehensive risk assessment: This involves reviewing business operations and transactions to identify potential PE risks. It is important to consider the different types of taxes that could be affected, including corporate income tax, indirect tax (VAT/GST), and payroll taxes. The risk assessment should also consider the potential impact on the company’s reputation, financial statements, and regulatory compliance.
2. Develop and implement a PE risk management strategy: The strategy should be tailored to the company’s specific operations and risks. This may involve implementing policies and procedures to ensure compliance with tax laws and regulations, including appropriate VAT registrations and payroll reporting. The strategy should also include ongoing monitoring of changes in tax laws and regulations and changes in the company’s business operations.
3. Maintain accurate and complete records: Good record-keeping is essential to demonstrate compliance with tax laws and regulations. This includes maintaining records of all transactions, contracts, and agreements relating to the company’s operations in each jurisdiction.
4. Engage in open and transparent communication with tax authorities: It is important to establish good relationships with tax authorities and be transparent about the company’s operations and tax position. This can help prevent misunderstandings and reduce the risk of audits and penalties.
5. Seek professional advice: Given the complexity of tax laws and labour regulations, it may be beneficial to seek professional advice from tax and global employment experts. This can help ensure that the company complies with all applicable tax laws and regulations and can help to identify potential risks and opportunities for optimization.

Companies expanding globally by taking a proactive approach to Permanent (PE) risk management can minimize the potential negative impact on their reputation, financial performance, and compliance obligations.

Benefits of Pro-active Permanent Establishment Risk Management

Concluding Thoughts on How to Avoid Permanent Establishment Risk

Managing Permanent Establishment (PE) risk is a smart business move for organizations with international operations. By proactively managing PE risk, companies can promote tax compliance, expand globally tax-compliantly, and avoid penalties and interest charges from tax authorities.

This approach provides a greater sense of security on a challenging issue and helps to prevent unnecessary taxation and interest payments due to mistakes or lack of awareness.

By controlling Permanent Establishment risk, companies can minimise potential negative impacts on their reputation, financial performance, and regulatory compliance while maximizing the benefits of their global operations.

Get Express Quote

In the ever-evolving landscape of Global Employment services, the trend has sharply turned towards technology-driven solutions. However, the rise of investment-backed SaaS companies offering ‘self-serve’ global EOR models, while impressive in their technological reach, often overlooks the critical element of customer service. This disconnect poses a high risk, particularly when navigating the intricacies of legally compliant onboarding of global workers and HR issues—a realm where personalized guidance is not just valuable but necessary.

Acumen International bucks this trend. Our journey for the last 23 years as a bootstrap business, growing organically and successfully, has been grounded in our unwavering commitment to our customers. We have matched the competition in technological capabilities, yet where we truly excel is in supporting and fronting this technology with people, both the client and the employee that we employ for the client. Our approach ensures that every interaction is not just a transaction but a partnership towards achieving global employment services success.

The Virtue of Bootstrapping

Bootstrapping in the business world represents a commitment to growth driven by customer revenue rather than external funding. This approach emphasizes sustainable development, allowing companies like ours to remain agile and responsive to customer needs. By prioritizing our client’s needs over fund-raising ambition, we ensure that every innovation and service enhancement aligns with our global clientele’s real-world applications and burning needs.

In the Forbes article “A Founder’s Perspective On Bootstrapping Over Raising Venture Capital” (April 2023), Eddie Lou, co-founder of CodaPet and OneGoal, and an active angel investor, shares his journey. He emphasizes the freedom and focus bootstrapping has allowed in prioritizing customer needs. “Bootstrapping… allows entrepreneurs to maintain complete control over their business decisions without having to answer to outside investors who may have a different agenda. By keeping their equity and decision-making power intact, founders have the freedom to chart their own course and pursue their vision on their own terms.”

Prioritising Customers in the SaaS Journey

The future of HR tech and SaaS leans towards a customer-first approach. Industry experts argue the importance of keeping customers at the forefront of business strategy, suggesting that the true value of SaaS solutions lies in their ability to solve specific customer problems effectively. This philosophy not only enhances the customer experience but also fosters loyalty and long-term relationships, ensuring that businesses remain competitive and is sustainable in a rapidly evolving market.

Frank V. Cespedes and Jacco van der Kooij discuss the importance of keeping customers at the core of business strategies in the Harvard Business Review article, “The Rebirth of Software as a Service” (April 2023). They argue that a customer-led model enhances long-term growth and sustainability, “Some SaaS firms correctly refer to their service groups as Customer Success (CS) teams, because they are vital in closing a sale, onboarding customers, business reviews that track on-going product impact, and the expansion phases of the customer lifecycle.”

The Centrality of Customer Needs in Global Employment

Keeping customer needs at the core of business operations is essential for success. According to industry leaders, understanding and addressing the unique challenges faced by clients is the cornerstone of a truly customer-led buying experience. By offering tailored solutions and support, companies can create a more personalized and effective buying journey, enhancing customer satisfaction and fostering a culture of trust and reliability

In an article published by G2 entitled “Why Customer-Led Buying Is the Way Forward for SaaS” (October 2023) Mads Fosselius emphasizes the significance of a customer-led buying experience, allowing customers to interact with the product on their terms. “Ensuring that the customer’s needs are always kept as the core focus is the primary goal of the customer-led buying approach, and it does this by handling a balance of sales-led and product-led strategies. When successful, it allows brands to foster a sustainable model for long-term growth.”

In embracing these insights, Acumen International has solidified its position as a leader in delivering Employer of Record solutions. In year 2024, we plan to launch the HR platform and tools that will help us balance cutting-edge technology with unmatched personalized support. Our dedication to understanding and addressing the unique needs of our clients, informed by direct feedback and engagement, shape our technology roadmap and operational strategies. This ensures we not only meet but exceed the expectations set by our clients, reinforcing our commitment to their success.

As we look towards the future, we remain steadfast in our belief that technology, no matter how advanced, should enhance rather than replace the human touch. Our focus on developing our business with our customer’s priorities at the forefront, not those of our investors, distinguishes us in the market and underpins our success in maintaining a truly customer-focused global EOR business.

The Global Talent Horizon
Unlocking the potential of a world without work borders

Welcome to February’s edition of our newsletter, where we focus on the transformative power of hybrid workforces — a blend of permanent and temporary talent across the globe — to drive unparalleled business resilience and agility in today’s ever-evolving marketplace.

This month, we shine the spotlight on our groundbreaking Contractor Solution, which is set to redefine global freelance talent management. Join us as we journey to Cyprus with our Senior Leadership team, to celebrate past achievements and envision a boundless future.

Explore the strategic benefits of a hybrid workforce and unveil flexibility as your ultimate global market asset.

The Future is Freelance: Embracing the 2024 Workforce Revolution

The freelance revolution is reshaping the 2024 workforce, offering businesses unprecedented growth and flexibility. As highlighted by @Forbes, this shift towards a freelance-dominated economy is not just imminent; it’s strategic.

Forbes Insights at a Glance

• Economic Growth: With a forecasted 2.6% GDP growth in 2024 by Goldman Sachs, the freelance market is vibrant and expanding.
• Surge in Freelancing: Post-COVID, there’s been a 130% increase in freelancers: evidence of  a growing workforce ready to innovate.
• Industry Optimism: Leaders of freelance platforms anticipate substantial growth, especially in tech, marketing, and consulting.
• Expert Networks: These networks are becoming a billion-dollar industry, offering short-term, high-value engagements.

This data underscores the strategic advantage for businesses to tap into the global freelance talent pool, which promises flexibility and access to the best expertise.

Explore how the freelance revolution is powering the future of work in Forbes’ article Read More.

Hybrid Work Is Here: The Benefits of a Full-Time and Freelance HR Strategy

The future of work is flexible, adaptive, and inclusive of diverse working styles. By integrating freelancers alongside full-time staff, businesses can unlock a host of benefits, enhancing their competitiveness and agility in the global market. Here’s why a hybrid workforce strategy is your key to a thriving, dynamic business environment:

• Increased Flexibility: Quickly scale your workforce up or down based on current business needs without the overheads associated with full-time hires.
• Diverse Skill Sets: Access a broad range of skills and expertise on-demand, allowing for innovation and creativity in tackling projects and challenges.
• Cost Efficiency: Save on long-term labour costs by hiring freelancers for project-specific work, and optimising budget allocation for growth initiatives.
• Market Responsiveness: Respond swiftly to market trends and demands by leveraging the agility of freelancers to pivot strategies and operations as needed.

Talent Trial and Integration: Assess freelancers in real-world projects before committing to full-time roles, ensuring a good fit with company culture and work ethic.

• Global Talent Pool Access: Break geographical barriers by engaging with top talent from around the world, enriching your team with global perspectives and expertise.

Embracing a hybrid workforce model means being at the forefront of workforce innovation, ready to leverage the collective strengths of both full-time employees and freelancers.

Are you ready to transform your workforce and embrace the future of work to explore how our strategic approaches can empower your global team?

Announcement: Introducing Contractor Solution

Our Contractor Solution acts as your single global partner, ensuring seamless freelance engagement across 190 markets. This service ensures compliance and risk mitigation and offers a pathway from contract roles to full-time positions, embodying the essence of a truly hybrid workforce strategy.

Top 5 Benefits:

• Compliance Assurance: Navigate international labour laws with ease.
• Cost Efficiency: Save on the expenses of establishing foreign entities.
• Flexibility & Scalability: Adapt to market demands with global freelance talent.
• Expert Support: Benefit from dedicated Acumen management for project success.
• Contract-to-Employee Pathway: Smooth transition for growing teams.

Learn how our Contractor Solution can transform your business.

The Top 5 Countries to Find Freelancers and Digital Nomads

In the evolving landscape of the global talent economy, the significance of location has never been more pronounced. A growing number of countries offer incentives to freelancers and digital nomads catering to their unique working lifestyles. 

These incentives not only simplify the process of working remotely but also enrich the professional and personal lives of modern workers. Below, we explore the top five freelancer-friendly countries leading the charge in welcoming global talent.

1. Spain & Portugal: Known for their vibrant cultures and stunning landscapes, both Spain and Portugal offer a special visa for digital nomads, alongside tax benefits for non-residents, making them an attractive destination for freelancers seeking a blend of work and leisure.
2. Estonia: A pioneer in digital governance, Estonia’s e-Residency programme allows global entrepreneurs to easily start and manage an EU-based company online, making it a haven for digital nomads looking to expand their business footprint.
3. Georgia: The Remotely from Georgia programme invites freelancers and remote workers from 95 countries to stay and work in Georgia for up to one year. Georgia offers a blend of rich culture and a supportive environment for digital nomads.
4. Romania: Through its IT park scheme, Romania offers significant tax incentives for IT contractors. It is a cost-efficient haven for tech talent. It offers benefits for reinvestment and R&D activities, making it an emerging hub for digital nomads and remote workers in the tech industry.
5. Mexico: Offering a Temporary Resident Visa specifically for remote workers and digital nomads, Mexico is appealing with its low cost of living, beautiful locale, and the opportunity to stay for up to four years with the possibility of renewal.

These countries are gateways to new ways of living and working. By offering tailored incentives like special visas, tax benefits, and supportive digital infrastructures, they are becoming hotspots for freelancers and digital nomads ready to explore the world without pausing their careers.

Eager to tap into the global talent pool and expand your team’s horizons?

Contact us today to discover how we can help you navigate the global talent economy and find the perfect blend of talent for your projects.

How To Convert Independent Contractors into Employees

Today’s evolving work environment demands strategic workforce transformations. In our latest article, How To Convert Independent Contractors into Employees, we’ve delved into the shift from contractor roles to permanent employment, emphasising compliance, adaptation, and meeting modern workforce expectations.

This transition is critical for maintaining legal compliance and operational efficiency amidst increasing regulatory complexity and global workforce mobility.

Contractor Management: Key Insights

• Regulatory Complexity: Navigating a labyrinth of global compliance requirements challenges businesses to maintain robust governance frameworks.
• Workforce Mobility: The rise in remote and international work arrangements presents unique compliance and operational hurdles.
• Strategic Adaptation: Organisations must regularly update their governance strategies to align with business goals and mitigate risks.

Embracing this shift ensures compliance and positions businesses for sustainable growth and enhanced talent management.

Discover comprehensive strategies for a seamless transition in an interview by Natali Oprya, Acumen’s VP of Marketing Strategy.

In a landmark gathering, Acumen International’s team met in Nicosia, Cyprus, for the Global Meet-up, marking a pivotal moment of reflection and forward planning. This gathering, a first since our transition to a fully remote model due to the Russian invasion of Ukraine in February 2022, was as much of a reunion as well as a strategic session held by the company’s CEO, Nick Ganzha and the celebration of our resilience and innovation. 

This meet-up highlighted our journey through the complexities of international labour regulations, driving us to develop and launch a Contractor Management Solution alongside our Employer of Record (EOR) services. 

Born from our direct experiences and the evolving needs of our clients, this solution underscores our commitment to compliant, efficient workforce management across borders. Nick’s announcement of the strategy in our Cyprus gathering not only solidified our resolve but also set a clear direction for Acumen’s future, with a focus on expanding our service offerings to meet the demands of a dynamic global employment landscape.

What’s New in Global HR Legislation

Stay informed with the latest in global HR legislation to keep your business compliant and forward-thinking.

Germany Eases Citizenship for Global Talent

• Summary: Germany reduces citizenship residency requirements from eight to five years, three for highly integrated non-EU citizens, to attract skilled workers.
• Employer Impact: Opens up a new talent pool, especially in sectors with labour shortages.
• Employer Actions: Support foreign workers’ citizenship efforts through integration courses and stay updated on the law.

Dive into the full FT article for more on Germany’s law and its impact on talent strategy.

EU Gig Economy Directive Affects UK Firms

• Summary: The EU’s new directive mandates full employment status under certain criteria, changing gig economy operations.
• Employer Impact: Requires reevaluation of workforce classification and management.
• Employer Actions: Assess business models against EU rules, ensure transparency in algorithmic decision-making, and monitor UK legislative developments.

Explore the EU Platform Work Directive’s implications for UK legislation.

U.S. Department of Labour Advances Equity

• Summary: The updated Equity Action Plan from the U.S. Department of Labor aims to improve job equity and accessibility.
• Employer Impact: Encourages equitable job opportunities for all workers.
• Employer Actions: Review hiring practices for inclusivity, partner with diversity-supporting organisations, and utilise federal equity programs.

Learn more about how the Equity Action Plan affects your business practices.

Summary & Close

As we navigate the complexities of the global employment landscape, flexibility remains our guiding principle. Our journey to Cyprus reaffirmed our commitment to breaking barriers and embracing a future where hybrid workforces are both a possibility and a necessity for growth and innovation.

Thank you for joining us this month. We look forward to continuing this journey, shaping a resilient and agile global workforce.

Stay updated with the latest news and updates from Acumen International.

Sign up for the Global Employment Tax & Compliance Newsletter to stay updated on hot labour and tax law changes with the latest in global employment, tax, and compliance across 190 countries.

Stay informed, stay ahead.

Welcome to the January 2024 Edition of the Express Global Employment Newsletter

As a leading provider of Global Employer of Record solutions, Express Global Employment is committed to keeping you informed and ahead in the dynamic world of global employment. 

This month, we delve into significant legislative changes and updates that are reshaping the landscape of employment, taxation, and immigration across various jurisdictions.

From the latest adjustments in Ireland’s Special Assignee Relief Programme (SARP) to Germany’s updated social security thresholds and the U.S. Department of Labor’s revised interpretation of independent contractor classification, each section in this edition is designed to provide you with concise yet comprehensive insights. We understand employers’ complexities in navigating international employment laws and aim to offer valuable guidance and clarity.

🇺🇸US Department of Labor’s New Rule on Independent Contractor Classification

Legislation Adopted

The U.S. Department of Labor (DOL) has introduced a final rule revising the interpretation of the Fair Labor Standards Act’s (FLSA) provisions regarding the classification of workers as independent contractors. This new rule, aligning with the agency’s 2022 proposed version, will be effective from March 11.

Key Provisions in a Nutshell

1. Multifactor Analysis Framework: The rule adopts a multifactor, “totality-of-the-circumstances” approach to determine a worker’s status as an independent contractor.
2. Six Key Factors: The DOL will evaluate six main aspects, including profit or loss opportunities, investments, permanence of work relationship, control over work performance, integration of work into the business, and the use of skill and initiative.

Implications for Employers & Immediate Actions

The final rule is designed to ensure fair labour practices and proper worker classification. Acting Secretary of Labor Julie Su emphasizes that this rule aims to safeguard minimum wage and overtime protections under the FLSA, especially for vulnerable workers often affected by misclassification.

• Review Worker Classifications: Employers should reassess their labour practices to align with the new classification criteria.
• Prepare for Compliance: Adjust operational and HR processes to comply with the multifactor framework.
• Legal Challenges Anticipation: The DOL is prepared to defend this rule against potential legal challenges, citing thorough procedural adherence and a solid legal foundation.
• Monitoring and Training: Employers need to stay updated on the rule’s implications and provide adequate training to HR and management teams.

🇵🇭Philippines’ New Tax Law: Simplifying Compliance with the Ease of Paying Taxes Act

Legislation Adopted

The Ease of Paying Taxes (EOPT) Act, Republic Act No. 11976, was signed on 5 January 2024. It modernised the Philippines’ tax administration and enhanced taxpayer rights.

The Ease of Paying Taxes Act represents a significant step towards simplifying and modernizing the tax system in the Philippines. It offers increased flexibility and convenience for taxpayers, ensuring easier compliance and potentially reducing administrative burdens for both employees and employers. This law underscores the Philippine government’s commitment to improving the efficiency of its tax administration while protecting taxpayer rights.

Key Provisions in a Nutshell

1. Electronic and Manual Tax Returns: Individual taxpayers now have the option to file tax returns either electronically or manually.
2. Flexibility in Tax Payment: Taxes can be paid at any authorized agent bank nationwide, offering greater convenience.
3. Overseas Filipino Workers (OFWs): OFWs solely earning abroad are exempt from filing Philippine income tax returns.

Understanding the Impact

This Act significantly simplifies tax compliance for employers and individual taxpayers, reducing the risk of penalties associated with tax filing and payment deadlines.

Implications for Employers & Immediate Actions

• Adopt Flexible Filing Methods: Employers should adapt to and educate employees about new electronic or manual tax filing options.
• Streamline Tax Payments: Leverage the flexibility of paying taxes at any authorized agent bank across the country.
• Inform Overseas Employees: Update OFWs on their exemption from filing Philippine income tax returns.
• Tax Filing Consolidation for Married Couples: Married individuals must file combined tax returns electronically or manually, with provisions for separate filings when necessary.

Changes in the EOPT Act

1. Definition of ‘Filing of Return’ Expanded: Includes electronic submissions through authorized tax software providers.
2. OFW Tax Filing Exemption: Clarifies the non-requirement of tax return filing for OFWs with income solely from abroad.
3. Flexible Filing Locations: Tax returns can now be filed with any authorized entity, not just where the taxpayer is registered.
4. Married Individuals’ Filing Options: Allows for electronic or manual filing and includes provisions for separate returns when combined filing is impractical.

New SARP Guidelines in Ireland🇮🇪: Key Changes and Employer Impact

Legislation Adopted

Irish Revenue Updates SARP Guidelines.

Key Provisions in a Nutshell

1. Updated Guidance: Irish Revenue’s eBrief No.265/23, issued on 20 December 2023, revises the calculation for tax gross-ups for tax-equalised assignees under the Special Assignee Relief Programme (SARP).
2. SARP e-Filing Facility: A new online filing system for SARP, accessible from 1 January 2024, streamlines the compliance process.
3. Effective Date: Changes apply from 1 January 2024.
4. SARP Relief Criteria: This scheme is applicable to employees earning between €75,000 (for those who arrived in Ireland before 1 January 2023) and €1 million and offers significant tax deductions.
5. Eligibility and Delivery: Targets certain foreign employees in Ireland, with relief provided via payroll or personal tax returns.
6. Prior Approach: Initially, SARP relief was part of the gross-up calculation, reducing overall costs.
7. 2024 Methodology Change: Now, gross-up is calculated first, with SARP relief applied afterwards, leading to higher costs.

Understanding the Impact

• Decreased SARP Benefits: The new calculation method reduces SARP relief, potentially increasing assignment costs in Ireland.
• E-Filing Advantages: The e-filing facility is expected to enhance filing efficiency and accuracy.
• Impact on Employers: Increased reportable gross income for an employee, resulting in higher net Irish tax costs for employers.

Implications for Employers & Immediate Actions

• Budget Review: Employers should reassess budgets for Irish assignments due to the altered SARP benefits.
• Understand New Calculations: Grasp the revised gross-up methodology to ensure correct application and compliance.
• Adopt e-Filing: Transition to the new SARP e-filing system for a smoother administrative process.
• Past Shadow Payroll and Tax Submissions: The updated guidance from Irish Revenue confirms that existing shadow payroll and PAYE returns, incorporating SARP relief up to the 2023 tax year-end, are unaffected. This respects the complexity and past approaches of employers. Employees are not required to amend prior-year tax returns to adjust reported taxable employment income.

🇱🇹Lithuania’s 2024 Social Security and Income Tax Updates

Legislation Adopted

Effective 1 January 2024, Lithuania has updated its average monthly salary, affecting social security contributions (SSC) and progressive personal income tax (PIT) calculations.

Key Provisions in a Nutshell

• 2024 Average Monthly Salary: The new average monthly salary for tax purposes is set at EUR 1,902.70.
• SSC Ceiling: The ceiling for most SSCs is EUR 114,162 (up from EUR 101,094 in 2023).
• Standard SSC Rates
  • Employer’s contribution: 1.77% for all income levels.
  • Employee’s contribution: 19.5% up to the SSC ceiling; 6.98% beyond the ceiling.
  • An additional 3% is withheld for employees enrolled in specific pension funds.
• Progressive PIT Rates
  • 20% for income up to EUR 114,162.
  • 32% for income exceeding EUR 114,162.

Understanding the Impact

This change is crucial for employers operating in Lithuania, especially those managing international assignments. It is vital to incorporate these updates into payroll cost projections, budgeting, and tax planning in Lithuania.

Implications for Employers & Immediate Actions

• Budget Adjustments: Revise assignment cost projections to align with the updated salary base and tax rates.
• Payroll Updates: Ensure payroll systems are calibrated to the new SSC and PIT rates.

Tax Rates in Lithuania 2024

Income Type & Cap	Employer SSC Rate	Employee SSC Rate	PIT Rate
Ffor income up to EUR 114,162	1.77%	19.5% (22.5% with pension fund)	20%
For income exceeding EUR 114,162	1.77%	6.98%	32%

France’s 🇫🇷 Tax Landscape Shifts: New Treaties with Denmark 🇩🇰and Greece🇬🇷, Terminations by Mali and Niger

Legislation Adopted

France has enacted new tax treaties with Denmark and Greece, and Mali and Niger have announced the termination of their respective tax treaties with France. The French law authorising these developments was published on 23 December 2023.

Key Provisions in a Nutshell

• Tax Treaty with Denmark: Signed in February 2022, this treaty replaces the 1957 agreement and includes modernised tax provisions.
• Tax Treaty with Greece: This new treaty supersedes the 1963 convention, aligning with current OECD standards.
• Mali and Niger Treaty Termination: Both countries have unilaterally announced the end of their tax agreements with France.

Understanding the Impact

• France-Denmark and France-Greece Treaties: These treaties will enhance cross-border commerce and reduce double taxation, benefiting cross-border employees.
• Mali and Niger Terminations: The termination of these treaties may lead to double taxation and increased costs for individuals and businesses involved in cross-border activities between these countries and France.

Implications for Employers & Immediate Actions

• Review Cross-Border Transactions: Businesses with operations or employees in Denmark, Greece, Mali, or Niger should assess the implications of these treaty changes.
• Adjust Tax Strategies: Adapt tax planning and compliance strategies to align with the new treaties and the absence of treaties with Mali and Niger.
• Employee Tax Implications: Consider the impact on cross-border employees, especially with regard to pensions, directors’ fees, and employment income.
• Stay Informed: Monitor further guidance and updates from tax authorities regarding these changes.

Tax Treaty with Denmark: Specific Provisions

• Wider Tax Coverage: The new Tax Treaty Includes CSG (generalised social contribution)and CRDS (contribution for the repayment of social debt) contributions, not covered by the old convention.
• Residency Criteria: Defines “resident” based on tax liability conditions.
• Salaried Employment Taxation: Taxable in the state where the professional activity is carried out, with exceptions for short-term assignments.
• Directors’ Fees: Taxable in the state of residence of the company.
• Pension Income: Generally taxable in the source state.

Tax Treaty with Greece: Key Features

• Modern OECD Standards: Addresses a range of income types, including dividends, interest, royalties, and pensions.
• Comprehensive Coverage: Encompasses employment income, self-employment, directors’ fees, students, trainees, and pension matters.

Mali and Niger Treaty Termination: Expected Effects

• Immediate Termination: The agreements will expire within three months of the announcement.
• Unclear Implications: Awaiting further guidance for expatriates and businesses involved in activities between France and these countries.

Increase in UK Immigration Health Surcharge Starting February 2024

Legislation Adopted

The UK Parliament has approved the Immigration (Health Charge) (Amendment) Order 2024, leading to a significant increase in Immigration Health Surcharge (IHS) fees effective from 6 February 2024.

Key Provisions in a Nutshell

Primary Increase: For most adult UK immigration applicants, including sponsored workers, the annual IHS fee will rise from £624 to £1035 per year.

Students and Youth Mobility: The fees for applicants in these categories will increase from £470 to £776 annually.

Under 18 Applicants: The fee will also increase from £470 to £776 per year.

Implications for Employers & Immediate Actions

This considerable increase in IHS fees will significantly affect employers who support visa application costs for recruiting foreign nationals. Businesses will need to reassess their budgeting strategies and consider the impact on their recruitment and retention policies.

Budget Review: Employers must revisit their financial planning to accommodate the increased IHS fees.

Changes to Wage Reporting for Inbound Workers in Belgium 🇧🇪

Legislation Adopted

Belgium enacted a new law on 28 December 2023, modifying the reporting obligations on annual wage statements (form 281.10/20) for inbound taxpayers and researchers.

Key Provisions in a Nutshell

1. Changes in Reporting Requirements: Employers must now include additional information on the wage statement form 281.10/20 for inbound taxpayers and researchers.
2. New Tax Regime: The new tax regime, launched in early 2022, replaced Belgium’s 38-year-old expat tax regime and offers significant tax benefits for qualifying inbound employees.

Understanding the Impact

This legislative update requires employers to adapt their administrative processes to comply with the modified wage statement reporting requirements for inbound taxpayers and researchers under the new tax regime.

Implications for Employers & Immediate Actions

1. Adjustment to Reporting Processes: Employers should revise their wage reporting systems to include the necessary additional entries on the wage statement 281.10/20.
2. Understanding the Tax Regime: Familiarize with the conditions and benefits of the new tax regime for inbound taxpayers and researchers.
3. Qualification Criteria: Ensure both the employer and the employee meet the specific conditions to qualify for the regime. 

Key Criteria

• The inbound taxpayer must not have been a Belgian resident, lived within 150 km of the Belgian border, or been subject to tax as a nonresident for professional income in Belgium for the 60 months prior to starting employment in Belgium.
• The taxpayer must earn a gross remuneration exceeding EUR 75,000 annually for services rendered in Belgium (exemption for inbound researchers).
• Tax-Free Allowances: Utilize the provision allowing certain employer-incurred expenses to be considered tax-free, capped at 30% of the gross remuneration with a maximum of EUR 90,000 annually.

Singapore’s 🇸🇬 IRAS Revises Voluntary Disclosure Program

Legislation Adopted

The Inland Revenue Authority of Singapore (IRAS) has introduced changes to its Voluntary Disclosure Program (VDP), published on 5 Jan 2024, impacting the resolution of under-reporting cases.

Key Provisions in a Nutshell

1. End of Global Settlement Approach: IRAS will no longer accept single adjustments by employers for under-reporting cases.
2. Direct Engagement with Individuals: Notices of Assessment (NOAs) will be issued directly to individuals for any under-reported income.

Implications for Employers & Immediate Actions

IRAS’s updated approach to the Voluntary Disclosure Program marks a significant change in tax resolution procedures in Singapore. Employers must adapt to these changes, ensuring precise income reporting and preparing for increased employee involvement in tax matters. This transition reflects a broader trend towards individual accountability and accuracy in tax reporting, vital for the proper administration of income-based government programs.

This shift in approach underscores the critical need for precise income reporting for each individual, given its implications on other income-based benefits and levies. It signifies a heightened focus on individual accountability in tax reporting.

• Review Reporting Practices: Employers should scrutinize their current tax reporting methods to ensure accuracy and compliance.
• Prepare for Individual Assessments: Anticipate and plan for the direct involvement of employees in the tax remediation process.
• Employee Communication: Develop clear communication strategies to inform and assist employees who may receive NOAs.
• Alignment with IRAS Requirements: Align internal processes with the new IRAS approach, ensuring that individual income data is accurately captured and reported.

Specific Changes in VDP

• Prior Global Settlement: Previously, employers could settle under-reported taxes collectively without involving individual employees directly.
• Shift to Individual NOAs: IRAS will issue NOAs to individuals to correct any under-reported income, even if the employer settles the tax dues.
• Increased Accuracy in Income Data: The new approach aims to ensure accurate individual income data, which is crucial for determining entitlements to government payments and benefits.

Italy’s Updated Expatriate Tax Regime 🇮🇹

Legislation Adopted

The Italian government has enacted the Decreto Legislativo, effective from 29 December 2023, revising the expatriate tax regime. This law introduces stricter conditions for expatriate taxpayers to benefit from tax relief.

Key Provisions in a Nutshell

• New Relief Limitations: Tax relief for eligible expatriates is now capped at 50% with a maximum income limit of EUR 600,000.
• Eligibility Criteria: The regime is now restricted to highly qualified or specialised individuals, including those eligible for a Schengen Blue Card.
• Inter-Company Transfer Conditions: The final law allows for inter-company transfers under more stringent conditions than initially proposed.
• Duration and Residency Requirements: Expatriates must have non-resident status in Italy for three years prior and commit to a four-year residency in Italy.

Implications for Employers & Immediate Actions

These changes necessitate a review of assignment policies and tax planning for both current and future employees in Italy. Employers must adjust strategies to meet the new regime’s stringent requirements.

• Policy Revision: Update assignment policies for Italy, considering the new regime’s stricter conditions.
• Employee Eligibility Check: Ensure potential and current assignees meet the new criteria, including residency and qualification requirements.
• Tax Planning: Adjust financial planning for assignments to Italy to account for the reduced tax relief benefits.
• Stay Informed: Keep abreast of any further clarifications or guidance on the implementation of the new law.

Background: Transition from Old to New Regime

Italy’s previous liberal expatriate tax regime, offering up to 70% income reduction, has transitioned to a more restrictive framework. The new law introduces relief modifications, residency prerequisites, and special rules for employees working in Italy for the same or a group employer. Transitional concessions have been provided for those who moved to Italy in 2023 under the old regime’s expectations.

UK’s New Approach to Reporting Employee Benefits-in-Kind

Legislation Adopted

HM Revenue & Customs (HMRC) is set to revamp the way employee benefits-in-kind are reported. This initiative aims to integrate Income Tax and Class 1A National Insurance Contributions (NICs) reporting for these benefits into payroll systems by April 2026.

Key Provisions in a Nutshell

1. Mandatory Payroll Reporting: Income Tax and Class 1A NICs on benefits-in-kind are to be reported through payroll software.
2. Elimination of Forms P11D and P11D(b): The change is expected to remove the need for reporting benefits on these forms.
3. Expected Consultation: Further details and a consultation document will be released later in 2024.

Implications for Employers & Immediate Actions

This update is significant for UK employers who have traditionally managed the annual task of reporting employee benefits using Forms P11D and P11D(b). The proposed change aims to streamline the process, reducing administrative complexities and simplifying compliance.

The U.K. has historically required annual reporting of benefits provided to employees, including globally mobile staff, using specific forms. The new proposals mark a shift from this longstanding practice, building on the voluntary payrolling of benefits-in-kind introduced in 2016. The change represents a move towards more efficient, integrated tax and NIC reporting processes.

• Preparation for Change: Employers should start preparing for the integration of benefits-in-kind reporting into their payroll systems.
• Review of Current Reporting Practices: Assess and update current processes and systems in anticipation of the new reporting requirements.
• Stay Informed: Keep abreast of upcoming consultation documents and further details from HMRC to understand the full scope and requirements of the change.
• Training and Awareness: Ensure payroll and HR teams are trained and aware of the upcoming changes to transition to the new system smoothly.

🇫🇷France’s 2024 Finance and Social Security Laws: Key Changes for Employers and Employees

Legislation Adopted

France’s Finance Law for 2024 and the Social Security Financing Law for 2024 introduce significant measures impacting employers and employees. These laws, published in late December 2023, have been validated by the French Constitutional Court.

Key Provisions in a Nutshell

Finance Law

1. Adjustment of Tax Brackets: Personal income tax brackets have been adjusted for inflation with increased thresholds and rates.
2. Transportation Cost Exemption: Eligible home-workplace transportation costs are exempt from certain contributions and income tax, with increased exemption limits.
3. Exit Tax Reporting Rules: Modifications in reporting rules for taxpayers subject to exit tax upon leaving France.
4. New Offense of Aggravated Tax Fraud: Introduces penalties affecting income tax reductions or credits.

Social Security Financing Law

1. Foreign Companies’ Social Security Registration: Changes in registration requirements for foreign companies operating in France without an establishment.

Implications for Employers & Immediate Actions

These new laws entail significant changes in tax and social security legislation in France, affecting employers’ budget projections, payroll adjustments, and tax equalisation processes for international employees.

• Budgeting and Payroll Adjustments: Employers should review and adjust their budget and payroll systems to reflect the new tax brackets and transportation cost exemptions.
• Compliance with Exit Tax Rules: Ensure compliance with the modified reporting requirements for the exit tax.
• Monitoring Aggravated Tax Fraud Rules: Stay informed about the new aggravated tax fraud offence to avoid penalties.
• Foreign Company Registration: Foreign companies without a French establishment must adapt to the new registration process for social security purposes.

Detailed Income Tax Bracket Changes in France for 2024

The Finance Law’s adjustment to personal income tax brackets are as follows:

Income (EUR)	Rate (%)
Up to 11,294	0
11,294-28,797	11
28,797-82,341	30
82,341-177,106	41
Over 177,106	45

Germany’s 🇩🇪Social Security Updates for 2024: Wage Thresholds and Health Insurance Contributions

Legislation Adopted

Effective from 1 January 2024, Germany has updated its social security wage thresholds and estimated additional contribution rate for statutory health insurance, as dictated by its social security statute.

Key Provisions in a Nutshell

1. Revision of social security contribution thresholds in Germany.
2. Increment in the average additional contribution rate for statutory health insurance.

Implications for Employers & Immediate Actions

These updates necessitate employer vigilance in payroll adjustments and compliance with social security legislation to avoid penalties.

• Payroll Adjustments: Employers must modify payroll systems to align with the new thresholds and rates.
• Compliance with Legislation: Ensuring accurate and timely social security contributions is crucial to avoid penalties.

2024 Social Security Thresholds

Region	Pension and Unemployment Insurance	Health and Nursing Care Insurance
West	Monthly: €7,550, Yearly: €90,600	Monthly & Yearly: €5,175
East	Monthly: €7,450, Yearly: €89,400	Monthly & Yearly: €5,175

Contribution Rates per Social Security Branch (2024)

Insurance Type	Employee’s Portion	Employer’s Portion	Total
Pension Insurance	9.30%	9.30%	18.60%
Unemployment Insurance	1.30%	1.30%	2.60%
Health Insurance*	7.30%	7.30%	14.60%
Nursing Care Insurance**	2.3% (Saxony 2.8%)	1.7% (Saxony 1.2%)	4.00%

Note 1: Health Insurance: The average additional contribution rate is 1.7% (0.1% higher than in 2023).

Note 2: Nursing Care Insurance: Rates assume employees without children. Contributions vary for employees with children.

Chile’s 🇨🇱 National Immigration Policy: A New Framework for Migration Management

Legislation Adopted

The Chilean government has enacted a new National Immigration Policy through Decree N 181, effective immediately. The policy addresses recent migratory trends and enhances national security and migrant welfare.

The new Chilean National Immigration Policy represents a significant shift towards more organized and humane immigration management, emphasising both national security and the well-being of migrants. It requires employers to be proactive in adapting their hiring and management strategies to align with the new regulatory environment.

Key Provisions in a Nutshell

1. Introduction of the National Immigration Policy to manage immigration more effectively.
2. Alignment with Chile’s constitution and international agreements.
3. Streamlined immigration processes and regularization of migrants with irregular status.
4. Preference for residency applications initiated abroad for specific categories.

Implications for Employers & Immediate Actions

This comprehensive policy aims to revamp Chile’s approach to immigration, ensuring controlled, secure immigration and facilitating access to essential public services for migrants.

• Adaptation to New Immigration Policy: Employers must align with the new immigration framework for recruiting and managing foreign talent.
• Prioritising Overseas Applications: Focus on hiring foreign nationals with work contracts from abroad or those contributing to sectors with labour shortages.
• Monitoring Student and Researcher Categories: Employers should be aware of new subcategories for students, academics, and researchers.

Aspects of the New Immigration Policy

1. Human Rights and Interculturality Focus: Emphasising respect for human rights and cultural diversity in immigration management.
2. Regularisation of Migrants: Efforts to legalize the status of irregular migrants in Chile.
3. Modernisation of Immigration Systems: Upgrades to information and processing systems for efficient handling of residence permit applications.
4. Training and Coordination: Training for public agents and collaboration with international organisations for better immigration governance.
5. Inclusive Services: Provision of services in multiple languages to cater to non-Spanish-speaking migrants.
6. Efficiency in Visa Processing: Expected reduction in visa application processing time and improved access to immigration information.
7. Economic Development Focus: Encouraging immigration of highly qualified foreign nationals to support Chile’s economic growth.

Malaysia’s 🇲🇾Immigration Updates: Visa and Digital Arrival Card Changes

Legislation Adopted

Malaysia has introduced significant changes to its immigration procedures, impacting entry visas and the introduction of the Malaysia Digital Arrival Card (MDAC).

Key Provisions in a Nutshell

1. Visa Liberalisation Plan: From 1 December 2023 to 31 December 2024, passport holders from China and India can enjoy a 30-day visa exemption for social visits or tourism.
2. Malaysia Digital Arrival Card (MDAC): Mandatory online MDAC submission for all foreign nationals, effective 1 January 2024, with specific exemptions.

Implications for Employers & Immediate Actions

These recent updates by Malaysia’s immigration authorities are key for companies managing expatriate hires and receiving foreign visitors. Understanding and adhering to these changes will ensure smooth entry processes and compliance with Malaysia’s immigration laws.

These updates streamline entry procedures for certain visitors while enhancing overall immigration process efficiency. The adoption of the MDAC is a move towards digitisation, simplifying entry for most travellers.

1. Visa Exemption Awareness: Employers should inform relevant staff and visitors from China and India about the 30-day visa exemption for specific purposes.
2. MDAC Compliance: Ensure all non-exempt foreign nationals complete the MDAC online before arrival in Malaysia.
3. Long-term Pass Holders: Clarify with Long-term Pass holders (e.g., Employment Pass, Dependent Pass holders) that they are exempt from the MDAC requirement.
4. Communication and Planning: To ensure compliance and hassle-free travel, update travel policies and communicate these changes to all relevant stakeholders.

Detailed Aspects of the Immigration Updates

• Visa Exemption Criteria: Visa exemptions apply to social visits and tourism only. Other purposes like employment require a single-entry visa.
• MDAC Application Window: Foreign nationals can submit the MDAC up to three days before arriving in Malaysia.
• MDAC Exemptions: Singapore passport holders, Diplomatic/Official passport holders, Permanent Residents, and Long-term Pass holders are exempt from the MDAC requirement.
• Newly Approved Long-term Pass Endorsement: Individuals arriving to endorse a new Long-term Pass must complete the MDAC, as they are not exempt.

Wrapping Up This Month’s Global Employment Insights

As we conclude this edition of our newsletter, we hope the insights and updates have been both enlightening and beneficial. Navigating the complexities of global employment laws and regulations is a challenging yet crucial aspect of international business, and our goal is to equip you with the knowledge to do so effectively.

Remember, the landscape of global employment is ever-evolving. Staying informed and adaptable is key to managing your workforce across borders successfully. At Express Global Employment, we’re dedicated to providing you with the tools and information you need to thrive in this dynamic environment.

We look forward to continuing to serve as your guide through the intricacies of global employment. Should you have any questions or need further assistance, our team of experts is always here to support you.

Sign up for the Global Employment Tax & Compliance Newsletter to stay updated on hot labour and tax law changes with the latest in global employment, tax, and compliance across 190 countries: https://bit.ly/48LZHj0

Stay informed, stay ahead.

Welcome to the final 2023 edition of the Global Employment Tax and Compliance Newsletter. This year has been a journey of discovery and adaptation in the world of global employment, and our 12th edition is no exception. We’ve consistently strived to bring cutting-edge insights and analysis to the forefront, empowering global employment professionals to navigate the complexities of an ever-evolving landscape.

As we culminate this year’s series, this edition encapsulates the latest legislative updates and reflects on the strides we’ve collectively made in shaping effective global employment strategies. The diverse changes and challenges we’ve examined throughout the year, from tax reforms to visa policies, have enhanced our collective expertise.

Our ambition has always been to transcend beyond mere compliance updates. We aim to provoke thought, foster innovation, and inspire strategic thinking in managing global workforces. The remarkable increase in our LinkedIn community and subscriber base is a testament to the value we’ve created together.

As we enter a new year, we carry insights, experiences, and lessons from 2023. Let’s continue to collaborate, innovate, and elevate the standards of global employment practices.

🇧🇪-🇳🇱 Clarifying Permanent Establishment in Remote Work: New Belgium-Netherlands Agreement

Legislation Adopted

On 23 November 2023, Belgium and the Netherlands ratified a Competent Authority Agreement to interpret Article 5 of their Income Tax Treaty, specifically addressing the impact of remote working on establishing a permanent tax presence.

Key Provisions in a Nutshell

• Scope of Agreement: Guidelines on how remote working affects the creation of a permanent establishment for taxation. Determining if home-working leads to a permanent establishment is crucial, impacting cross-border employees’ corporate and income tax calculations.
• Home-Working Scenarios: Differentiation between occasional, regular, and consistent home-working and their impact on establishing a permanent establishment.
• Practical Guideline: Working from home 50% or less of the time does not constitute a permanent establishment. Over 50% may lead to a permanent establishment, dependent on certain conditions.
• Effective Date: Applicable from 8 December 2023.

Understanding the Impact

This Agreement marks a crucial development in the growing hybrid work model, offering clarity on tax obligations and permanent establishment related to remote working for cross-border employees between Belgium and the Netherlands.

Implications for Employers & Immediate Actions

• Policy Review: Assess remote working policies in light of these new guidelines.
• Tax Compliance: Adjust tax reporting and compliance strategies for employees working remotely.
• Individual Assessment: Examine the working patterns of cross-border employees to understand potential tax implications under the new Agreement.
• Ongoing Discussions Monitoring: Stay informed about ongoing discussions between Belgium and the Netherlands, particularly regarding income tax implications for cross-border employees. These talks may lead to future changes that could impact cross-border employment arrangements.
• Assessment of Permanent Representative Status: The Agreement does not address situations involving a permanent representative. Employers must assess if employees working from home with the authority to conclude or negotiate employment contracts could be classified as permanent representatives. This is crucial as it has significant implications for establishing a permanent establishment and the related tax obligations.

🇨🇿 Czech Republic’s Revisions in Taxation of Employee Stock Plans

Legislation Adopted

The Czech Republic is considering a bill to revise the taxation on employee stock options and shares. Set for potential implementation on 1 January 2024, if passed, the bill is directed at employer-provided stock benefits.

Key Provisions in a Nutshell

• Scope of the Bill: Adjusts taxation on employee stock options and shares, focusing on those acquired in a business corporation that is the employer or a related entity.
• Taxation Timing: The amendment specifies when the non-monetary benefit, i.e., employment income from these plans, becomes taxable for the employee.
• Defined Taxable Events: Includes termination of employment, changes in tax residency, share or option transactions, option exercises, and reaching a 10-year limit from acquisition.
• Option Type Applicability: The bill’s current form does not specify a distinction between transferable and non-transferable options.
• Transferable vs. Non-Transferable Options: The amendment does not distinguish between freely transferable and non-transferable options in its current wording.

Understanding the Impact

This legislative change is significant, particularly regarding when and how employee stock options and shares are taxed, affecting both employers and employees, especially in cross-border employment situations.

Implications for Employers & Immediate Actions

• Review Employee Plans: Examine existing stock options and share plans for alignment with the new taxation rules.
• Inform Employees: Clearly communicate the changes in taxation timing to employees to help them understand the impact on their income.
• Legislative Monitoring: Keep track of the bill’s progress to adapt swiftly and ensure compliance.
• Seek Clarification on Ambiguities: Consult local tax and employment experts to understand how the lack of distinction in option types affects plan administration.

🇨🇾 Cyprus 2024 Update: Social Insurance Contribution Rates Rise

Legislation Adopted

Effective 1 January 2024, Cyprus has mandated an increase in the Social Insurance Fund contribution rates, per the Social Insurance Law of 59(I)/2010 and its amendments.

Key Provisions in a Nutshell

• Employed Persons: Contribution rates for both employers and employees will rise from 8.3% to 8.8% on insurable earnings.
• Self-Employed Persons: The contribution rate will increase from 15.6% to 16.6% on insurable earnings.
• Insurable Earnings Ceiling: For 2024, the maximum insurable earnings are set at €1,209 per week, €5,239 per month, and €62,868 per annum.
• Contribution to Other Funds: Rates for the Redundancy, Training and Development Funds, along with the Social Cohesion Fund (which has no cap on earnings).

Understanding the Impact

These changes will affect cost projections and budgeting for international assignments to and from Cyprus. Employers must consider these rate increases in payroll adjustments and hypothetical tax calculations, particularly for tax-equalised assignees.

Implications for Employers & Immediate Actions

• Payroll Adjustment: Update payroll systems to reflect the new contribution rates for both employed and self-employed individuals.
• Budget Revisions: Revise budgeting for international assignments in Cyprus to account for increased social insurance contributions.
• Communication: Inform stakeholders, including assignees, about the changes to ensure understanding and compliance.
• Consultation: Employers and self-employed individuals should seek advice from tax professionals for optimal management of these changes.

Social Insurance Contribution Rates for 2024

Fund	Employer Rate	Employee Rate	Cap
Social Insurance	8.80%	8.80%	€5,239/mo
Redundancy	1.20%	–	€5,239/mo
Training and Development	0.50%	–	€5,239/mo
Social Cohesion	2.00%	–	No Cap
Total	12.50%	8.80%	–

🇸🇰 Slovakia’s Tax Legislation Overhaul Post-Government Change

Legislation Adopted

Following its recent formation, the Slovak government rapidly introduced a tax reform, leading to the passage of the Amendments Act on 19 December 2023. This act revises several existing tax laws, including the Slovak Income Tax Act, and is set for implementation from the start of 2024, pending presidential approval.

Key Provisions in a Nutshell

• Dividend Income Tax Hike: Tax on dividends rises from 7% to 10% for profits accruing in tax periods beginning 1 January 2024 onwards.
• Revocation of Tax Exemptions: Specific exemptions on securities sales, company shares disposals, and virtual currency transactions are eliminated.
• Adjustment in Self-Employed Taxable Income Cap: The threshold for a 15% tax rate for self-employed individuals increases from €49,790 to €60,000.
• Higher Health Insurance Contributions: Employer health insurance contributions are set to rise from 10% to 11% (5.5% for employing disabled persons).

Understanding the Impact

These rapid legislative developments introduce significant changes in Slovakia’s tax landscape. Employers, particularly those under the Slovak social security regime, and individuals with investment income will face higher taxation.

Implications for Employers & Immediate Actions

• Prepare for Increased Operational Costs: Factor in the raised healthcare insurance rates in budgeting and payroll.
• Investment Income Reassessment: Reevaluate the financial impact due to the removal of specific tax exemptions and increased dividend taxation.
• Policy Revision: Update internal tax-related policies, including for international assignees, to align with the new tax regime.
• Individual Tax Planning: Advise employees to review their tax situation, especially those with investments affected by the changes.

🇨🇳 China’s Expanded Visa Exemption for Select Countries

Legislation Adopted

China’s Ministry of Foreign Affairs announced an expansion of its unilateral visa exemption policy, effective from 1 December 2023 to 30 November 2024, for travellers from six additional countries.

Key Provisions in a Nutshell

• Beneficiary Countries: Germany, France, Italy, the Netherlands, Spain, and Malaysia.
• Eligibility Criteria: Visa exemptions apply to citizens holding ordinary passports visiting for business, tourism, visiting relatives, and transit for up to 15 days.
• Existing Exemptions: This expansion builds on existing visa exemptions for Singapore and Brunei citizens.

Understanding the Impact

These visa exemptions ease entry into China for short-term stays from the specified countries, promoting business, tourism, and cultural exchanges. However, the duration under visa exemption cannot be extended within China.

Implications for Employers & Immediate Actions

• Inform Relevant Stakeholders: Update mobile employees, frequent travellers, and students about the new visa exemption opportunities.
• Compliance: Ensure understanding and adherence to the visa exemption conditions, including duration limitations.
• Monitor Updates: Stay informed about further immigration policy changes in China and reciprocal visa policies from the affected countries.

Reciprocal Visa Policies

• France’s Policy for Chinese Citizens: France now offers a five-year multiple-entry visa for Chinese citizens who have completed a master’s degree and at least one semester of study in France.
• Malaysia’s Visa Exemption for Chinese Citizens: From 1 December 2023, Chinese citizens with ordinary passports are exempted from needing a visa for tourism visits to Malaysia for up to 30 days.
• China-Singapore Visa Waiver Agreement: An agreement for visa waivers for ordinary passport holders of China and Singapore is under finalisation, with specifics yet to be announced.

🇧🇷 Brazil’s Comprehensive Tax Reform: Impacting Income and Overseas Investments

Legislation Adopted

Brazil’s government has enacted Law No. 14.754/2023, bringing significant changes to the taxation of individual income, including earnings from employment and financial investments abroad, effective from January 1, 2024. This law also includes key reforms in the trust regime and alters the valuation and taxation of foreign assets for Brazilian tax residents.

Key Provisions in a Nutshell

• Trust Regime Reforms: Introduces important changes to how trusts are handled for tax purposes.
• Valuation of Foreign Assets: Alters rules for valuing foreign assets held by Brazilian tax residents, impacting their tax liabilities.
• Broad Tax Treatment Changes: Affects various forms of income, including employment and overseas investments.

Understanding the Impact

The Law marks a significant shift in Brazil’s tax policy, affecting individuals with diverse income sources and investments overseas. The new valuation rules for foreign assets are especially noteworthy.

Implications for Employers & Immediate Actions

• Inform and Prepare Assignees: Discuss the applicable tax rates, thresholds, exemptions, and changes in the valuation and reporting of overseas assets with new Brazil-inbound assignees.
• Review Assignment Policies: Employers should reassess assignment policies, considering the increased tax responsibilities and potential impacts on assignees.
• Seek Expert Guidance: It’s crucial for employers and employees to consult with tax professionals or a Global Mobility Services team to understand the implications and ensure compliance with the new laws.

🇨🇿 Comprehensive Tax and Social Security Reforms in the Czech Republic

Legislation Adopted

The Czech government has enacted significant personal income tax and social security reforms, effective January 1, 2024. These changes come as part of a government consolidation package to address financial imbalances.

Key Provisions in a Nutshell

• Income Tax Rate Changes: The threshold for a 23% tax rate is lowered, impacting higher earners.
• Non-Monetary Benefit Limits: Introduction of limits on exemptions for non-financial benefits, including managerial accommodations and meal allowances.
• Tax Deductions Removed: Removal of specific tax deductions and credits affecting students, families, and union members.
• Cap on Securities and Share Exemptions: Restriction on tax exemptions for sales of securities and shares, with a new cap set.
• Social Security Contribution Adjustments: Increase in employee and self-employed contribution rates.

Understanding the Impact

These reforms will likely lead to increased taxation for employees, especially international assignees, and heightened social security contributions, affecting the Czech Republic’s employees and self-employed individuals.

Implications for Employers & Immediate Actions

• Budget and Policy Adjustments: Employers should reassess their budgeting for assignments and consider revising policies to accommodate increased tax and social security costs.
• Employee Communication: Clearly communicate these changes to employees, especially those on international assignments, to manage expectations and ensure compliance.
• Monitor Further Developments: Stay alert to any additional guidance or modifications to these reforms.

🇪🇺 EU’s New Directive on Platform Work: Ensuring Fair Employment Status

Legislation Adopted

The European Parliament and Council reached a provisional agreement on the Platform Work Directive on 13 December 2023. This directive, pending formal adoption, targets improved working conditions for individuals engaged in tasks through digital platforms.

Key Provisions in a Nutshell

• Employment Status Clarification: Presumption of employment based on certain control indicators.
• Algorithmic Transparency: Mandated disclosure of algorithmic decision-making impacting workers.
• Human Oversight in Decision-Making: Requirement for human involvement in significant platform decisions.
• Data Protection Enhancements: Restrictions on processing sensitive personal data of platform workers.
• Intermediary Regulation: Measures to prevent circumvention of rules through intermediaries.

Understanding the Impact

The proposed EU Platform Work Directive can significantly transform the platform economy’s landscape. It’s poised to shift the classification of a substantial number of workers from self-employed to employee status. This change isn’t just a label alteration; it has profound implications for taxation and social security contributions. The directive’s reach extends across various segments of the gig economy, notably impacting sectors like food delivery services. With this shift, many individuals operating as independent contractors could gain full employee rights and protections, altering the financial and operational dynamics for workers and platform operators.

Implications for Employers & Immediate Actions

• Reassess Employment Classifications: Review and update employment status in line with new criteria.
• Adapt to Transparency Requirements: Revise systems to ensure algorithmic decision-making is transparent.
• Incorporate Human Review in Decision Processes: Establish procedures for human oversight in critical decision-making areas.
• Monitor and Prepare for Compliance: Keep abreast of developments and prepare for the directive’s effective implementation.

Additional Considerations

• Potential Directive Adoption: The directive, likely to be adopted, addresses the employment status of platform workers, with court cases often leading to reclassification from self-employed to employed.
• Economic Implications: Observations highlight that the directive may align with the financial strategies of certain member states where service provision taxes are less than those for employment. The anticipated shift from self-employed to employed status for many workers could increase overall tax and social security contributions.
• EU Commission’s Analysis: Over 5 million platform workers might be misclassified, and reclassification could significantly increase state revenues.

🇬🇧 United Kingdom HMRC Releases Guidance on Digital Platform Reporting Rules

New Reporting Obligations for Digital Platforms

HMRC’s updated guidance, detailed in the International Exchange of Information Manual (IEIM), outlines the UK’s implementation of the OECD’s model reporting rules for digital platforms. These new requirements, effective from 1 January 2024, compel UK-based digital platforms to gather and report to HMRC annual income information for sellers providing personal services, selling goods, or renting out property or transport on their platforms. The initial data reporting is scheduled for January 2025.

Compliance for UK and EU Platforms

The guidance is particularly relevant for UK digital platforms that are also active in the EU. These platforms must be aware of their dual reporting responsibilities, as the EU’s Directive on Administrative Cooperation (DAC7) enforces similar rules from 1 January 2023, a year earlier than the UK’s timeline. The first EU reporting deadline falls in January 2024. Platforms operating in both regions should prepare for each jurisdiction’s nuanced requirements and timelines.

🇬🇧 New UK Tax Treaties with Luxembourg 🇱🇺 and San Marino 🇸🇲

Legislation Adopted

The UK has recently ratified new double tax treaties with Luxembourg and San Marino. The UK-Luxembourg treaty, signed on 7 June 2022, and the UK-San Marino treaty, signed on 17 May 2023, have both been formally ratified and entered into force on 22 November 2023 and 30 November 2023, respectively.

Key Provisions in a Nutshell

• UK-Luxembourg Treaty
  • Takes effect for UK and Luxembourg withholding taxes from 1 January 2024.
  • Applies to other Luxembourg taxes on income or capital from 1 January 2024.
  • Affects UK corporation tax (including on chargeable gains) from 1 April 2024.
  • Impacts UK income tax and capital gains tax from 6 April 2024.
• UK-San Marino Treaty
  • Effective for San Marino taxes and the UK withholding taxes from 1 January 2024.
  • Applies to UK corporation tax from 1 April 2024.
  • Influences UK income tax and capital gains tax from 6 April 2024.

Understanding the Impact

These treaties are pivotal in preventing double taxation and fiscal evasion and enhancing trade and investment between the UK and these countries. They provide clarity on tax obligations for businesses and individuals engaging in cross-border activities.

Implications for Employers & Immediate Actions

1. Review International Transactions: Employers with cross-border transactions between the UK and Luxembourg or San Marino should review their structures and transactions to align with the new treaty provisions.
2. Tax Planning: Consider tax planning opportunities under the new treaties, particularly regarding withholding taxes, capital gains, and corporate taxes.
3. Update Tax Compliance Protocols: Ensure that payroll and taxation systems are updated to reflect the changes, especially regarding withholding tax obligations.
4. Communicate with Employees and Stakeholders: Inform employees and relevant stakeholders about how these changes might affect their tax liabilities.
5. Seek Expert Advice: Consult with tax professionals to understand the detailed implications of these treaties on your business operations.
6. Monitor Implementation: Keep abreast of how these treaties are implemented in practice, especially in their initial years, to ensure full compliance and to take advantage of potential benefits.

🇺🇸 U.S. Visa Bulletin January 2024: Key Updates

Legislation Adopted

The U.S. Department of State’s January 2024 Visa Bulletin announces significant updates in employment-based visa categories, particularly for EB-1 and EB-3 visas for certain nationalities.

Key Provisions in a Nutshell

• EB-1: Progression in cut-off dates for China and India.
• EB-2 and EB-3: Changes in cut-off dates for China, India, and other countries.
• Other Categories: Adjustments in EB-4, Certain Religious Workers, and EB-5 categories.

Understanding the Impact

These updates reflect ongoing adjustments to the U.S. immigration system, addressing the backlog and demand for employment-based visas. The shift in cut-off dates is a response to changing immigration trends and the need to manage visa allocations efficiently.

Implications for Employers & Immediate Actions

• Monitoring Visa Bulletins: Employers should closely monitor monthly bulletins for changes affecting their workforce’s visa status.
• Planning and Compliance: Adjustments may be required in workforce planning and compliance strategies, especially for those employing a significant number of employees from China and India.
• Communication with Employees: It’s essential to keep affected employees informed about their visa status and potential eligibility or application timeline changes.

Cut-Off Dates for Dates of Final Action Chart for January 2024

This table concisely summarises the cut-off dates for the final action per visa category, as per the January 2024 Visa Bulletin. It’s a helpful guide for employers and individuals planning their visa applications.

Visa Category	All Countries (except China & India)	China	India
EB-1	Current	July 1, 2022	September 1, 2020
EB-2	November 1, 2022	January 1, 2020	March 1, 2012
EB-3 (Professional & Skilled)	August 1, 2022	September 1, 2020	June 1, 2012
EB-3 (Other Workers)	September 1, 2020	January 1, 2017	June 1, 2012
EB-4	May 15, 2019	–	–
Certain Religious Workers	May 15, 2019	–	–
EB-5	Current	December 8, 2015	December 1, 2020

🇬🇧 United Kingdom HMRC’s New IR35 Off-Payroll Working Rules Guidance

Legislation Adopted

• Guidance Released: HMRC has published “Help to comply with the reformed off-payroll working rules (IR35) — GfC4,” as part of their Guidelines for Compliance (GfC) program.

Key Provisions in a Nutshell

• Target Audience: Aimed at businesses managing IR35, involving workers who provide services through their own intermediaries. Note: IR35 off-payroll working rules are a set of tax legislation in the UK designed to combat tax avoidance by workers supplying their services to clients via an intermediary, such as a limited company, but who would be an employee if the intermediary was not used. These workers are often referred to as ‘disguised employees’ by HMRC.
• Structure: The guidance is divided into 14 distinct sections, each detailing aspects of IR35 compliance.

Understanding the Impact

• Purpose: The guidance is designed to clarify good practices for IR35 compliance, helping organisations understand HMRC’s expectations.
• Format: Features practical examples of systems and processes deemed effective for adhering to IR35 rules.

Implications for Employers & Immediate Actions

• Complementary Nature: These guidelines are to be read alongside existing HMRC off-payroll working guidance, not in isolation.
• Integration with Current Practices: Employers should incorporate the guidance into their existing IR35 compliance strategies.
• Review and Implementation: Thoroughly review the GfC4 guidelines and integrate the recommended practices for a comprehensive IR35 compliance approach.
• Ongoing Compliance: Regularly update and refine IR35 compliance processes in line with HMRC’s evolving guidelines and practices.

A-Z Guide to Global Employment

Ready to empower your global journey? Dive into our new A-Z Guide to Global Employment!

From A to Z, we’ve covered it all – from international hiring strategies to visa processes, cultural diversity, and tax reporting. Whether you’re an HR professional, a business owner, or a global executive, this guide is your ultimate resource for success in the global workforce.

• Explore expert insights on managing a diverse global team.
• Navigate the complexities of international employment with ease.
• Leverage the strength of Global EOR for streamlined operations.
• Achieve compliance, quality, and efficiency on a global scale.

Embracing the Future of Global Employment

As we draw the curtains on this year’s final edition of the Global Employment Tax and Compliance Newsletter, we want to extend our heartfelt gratitude to each one of you. Your engagement, insights, and feedback have been the driving force behind our continuous evolution and success.

Looking ahead, the landscape of global employment continues to evolve at an unprecedented pace. The challenges and opportunities it presents will undoubtedly require us to stay agile, informed, and proactive.

We eagerly anticipate continuing this journey with you in 2024, further expanding our horizons and deepening our understanding of global employment intricacies. Until then, we wish you a successful wrap-up of this year and a fantastic start to the next.

Welcome to our November 2023 Global Employment Tax and Compliance Newsletter. This edition is crafted for forward-thinking employers and global employment solution providers, offering a lens into the latest shifts and trends in the global employment landscape.

November 2023 has been a month of pivotal changes and strategic adaptations. The global employment domain continues to evolve rapidly from Italy’s revamped expatriate regime to Australia’s innovative pathways to permanent residency and Belgium’s updated salary thresholds. 

These changes, crucial insights from the ILO’s digital employment guidelines, and more are dissected here to provide you with actionable intelligence.

Join us as we navigate these developments, understanding their impact, and exploring strategies for effective compliance and operational agility in the global marketplace.

Thank you for choosing us as your guide in the dynamic world of global employment. Let’s dive in!

Global EOR vs. Local Legal Entity

Explore the “Global Employer of Record vs. Local Legal Entity” Guide

Navigating the complexities of international expansion requires a strategic approach. Our guide, “Global Employer of Record vs. Local Legal Entity,” offers a comparative analysis and strategic insights. It’s an invaluable asset for decision-makers weighing the advantages of an Employer of Record against setting up a local legal entity. Access this essential resource for your global expansion plans here.

🇬🇧 United Kingdom Autumn Statement 2023: Key Updates on National Insurance and Tax Rates

Legislation Adopted

Chancellor Jeremy Hunt’s Autumn Statement, delivered on 22 November 2023, introduces several changes impacting both employees and employers in the UK. Among the most significant is the reduction in National Insurance rates.

Key Provisions in a Nutshell

1. National Insurance Contributions (NIC): A reduction for employees from 12% to 10% starting 6 January 2024. Employer NIC rates remain unchanged.
2. Income Tax Rates and Thresholds: No changes have been announced; rates and thresholds remain as previously set.
3. Scotland and Wales Tax Rates: Updates for 2024/25 to be announced in December 2023.
4. Self-employed NIC: Class 2 contributions were abolished, and Class 4 was reduced from 9% to 8% from 6 April 2024.
5. Other Tax Measures: Implementation of Making Tax Digital for Income Tax Self-Assessment in April 2026, abolition of the pension lifetime allowance from April 2024, and adjustments to capital gains and dividend allowances from April 2024.

Tax Category	2023/24	2024/25
Personal Allowance	£12,570 (0%)	£12,570 (0%)
Basic Rate	£0 – £37,700 (20%)	£0 – £37,700 (20%)
Higher Rate	£37,701 – £125,140 (40%)	£37,701 – £125,140 (40%)
Additional Rate	Over £125,140 (45%)	Over £125,140 (45%)

Understanding the Impact

These changes are crucial for employers managing globally mobile employees in the UK. While the overall tax burden in 2024/2025 is expected to remain stable, individuals liable for UK National Insurance will see a noticeable reduction in contributions.

Implications for Employers & Immediate Actions

• Budgeting: Employers should adjust their financial planning and payroll systems to accommodate the new NIC rates.
• Communication: It’s vital to inform employees, especially those on international assignments, about these changes and their potential impact on net pay.
• Compliance: Ensure alignment with the updated tax and NIC rates to maintain compliance and avoid penalties.
• Consultation: Consider consulting with tax professionals to understand the broader implications of the Autumn Statement on your business operations.

To ensure full compliance with the evolving UK tax landscape, employers should stay vigilant for further announcements, especially regarding Scottish and Welsh tax rates.

🇬🇧UK Introduces Electronic Travel Authorisation for Non-Visa Nationals

Legislation Adopted

The UK government is rolling out an Electronic Travel Authorisation (ETA) requirement for non-visa nationals planning to visit, transit, or enter the UK for short stays, including up to three months as a Creative Worker.

Key Provisions in a Nutshell

1. ETA Requirement: Non-visa nationals need an ETA before travelling to the UK.
2. Exemptions and Initial Roll-Out: Irish residents are exempt. Qatari nationals require an ETA from 15 November 2023, with other non-visa nationals following in 2024.
3. Cost and Validity: An ETA costs GBP 10 and is valid for two years or until the passport expires, whichever comes first.

Understanding the Impact

This change marks a significant shift in the UK’s travel and immigration policy to enhance security and streamline entry processes.

Implications for Employers & Immediate Actions

Inform and Prepare Travellers: Employers should inform non-visa national employees of this new requirement, especially those frequently travelling to the UK.

Plan for Additional Costs and Time: Factor in the ETA cost and application process time into travel plans and budgets.

Monitor Roll-Out Dates: Stay updated on the phased implementation dates for different nationalities in 2024.

🇪🇺EU Takes Action Against Greece and Italy for Non-Compliance with Family Benefits Rules

Legislation Adopted

The European Commission (EC) has initiated infringement procedures against Greece and sent a reasoned opinion to Italy for failing to comply with EU rules on family benefits.

Key Provisions in a Nutshell

🇬🇷Greece: Current laws require EU nationals to reside in Greece for at least five years and non-EU nationals for 12 years to qualify for family benefits.

🇮🇹Italy: Italy’s law, introduced in March 2022, mandates a minimum two-year residence for eligibility for the new family allowance for dependent children.

EU Regulation Violation

Both countries’ requirements contravene EU rules prohibiting residence conditions for social security benefits, including family benefits.

Understanding the Impact

Amendments to these laws in Greece and Italy would be retroactive, allowing mobile workers previously disqualified due to residence requirements to claim family benefits retrospectively.

Implications for Employers & Immediate Actions

• Monitoring Legislative Changes: Stay informed on Greece and Italy’s legislative responses to the EC’s actions.
• Advising Mobile Workers: Keep mobile employees updated on potential changes and assist them in filing for retroactive family benefits claims.
• Compliance Readiness: Prepare for the administrative aspects of supporting claims if legislative amendments occur.

🇮🇪 Ireland Streamlines Stamp 4 Immigration Permission Process

Legislation Adopted

In collaboration with the Department of Enterprise, Trade and Employment, Ireland’s Department of Justice has announced changes to the Stamp 4 immigration permission process, effective 30 November 2023.

Key Provisions in a Nutshell

1. Elimination of Stamp 4 Support Letter: The need for a Stamp 4 support letter from DETE for certain permit holders will be discontinued.
2. Direct Application Process: Applications for Stamp 4 immigration permission can be made directly to the Registration Office, ISD.
3. Eligibility Requirement: Applicants must complete 21 months under an IRP Stamp 1 card in Ireland.
4. Application Timeline: Applications for Stamp 4 can be submitted 12 weeks before the current IRP Stamp 1 permission expires.

Understanding the Impact

This change simplifies the transition from Stamp 1 to Stamp 4 immigration permission for critical permit holders, making it a single-step process. Stamp 4 permission allows holders to work and live in Ireland without a separate employment permit.

Implications for Employers & Immediate Actions

• Inform Relevant Employees: Alert employees holding Critical Skills Employment Permits, Researchers on Hosting Agreements, and Non-Consultant Hospital Doctors about the new process.
• Guide Through Application Changes: Assist eligible employees in understanding the streamlined application process and its timeline.
• Monitor Application Submissions: Ensure applications are submitted within the new 12-week window before IRP Stamp 1 expiry.
• Stay Updated on Processing: Keep track of any further updates from the Department of Justice and the Department of Enterprise, Trade and Employment.

🇫🇮 Finland Responds to Security Concerns with Eastern Border Closure

Legislation Adopted

The Finnish government has announced the closure of specific border-crossing points along its eastern border, effective from 18 November 2023 to 18 February 2024, as a security measure against illegal entries.

Key Provisions in a Nutshell

1. Closed Border Points: Key entry points at Vaalimaa, Nuijamaa, Imatra, and Niirala are closed.
2. Alternative Crossing Points: Four northeastern border points remain open (Rajajooseppi, Salla, Kuusamo, and Vartius).
3. Asylum Application Processing: Applications for international protection are now concentrated at Vartius and Salla crossing points.

Understanding the Impact

This closure is a response to the rise in illegal entries, particularly in southeastern Finland. It affects individuals and employees who frequently travel between Finland and Russia, requiring them to adjust to the remaining open border points.

Implications for Employers & Immediate Actions

• Communicate Changes: Inform employees, especially those frequently travelling or commuting between Finland and Russia, about the border closures and alternative routes.
• Adjust Travel Plans: Reorganize travel logistics and schedules for employees affected by the closures, considering alternative border crossings.
• Stay Informed: Keep updated with Finnish government announcements and border security measures, as the situation is subject to ongoing evaluation and potential changes.

🇪🇺 Council of the EU Approves Digitalisation of Schengen Visa Application Process

Legislation Adopted

The EU Council has endorsed new regulations to digitalise the Schengen visa application process, allowing travellers to apply online for visas to the Schengen area, which comprises 27 European countries with minimal internal border controls.

Key Provisions in a Nutshell

1. EU Visa Application Platform: A centralised platform for Schengen visa applications where applicants can submit data, upload documents, and pay fees.
2. Reduced In-Person Requirements: In-person consulate visits are mainly required for first-time applicants or those with expired biometric data or new travel documents.
3. Digital Visa Format: Replacing traditional visa stickers with a cryptographically signed barcode.

Understanding the Impact

This digital transformation streamlines the visa application process, making it more efficient for travellers and national administrations. It enhances the speed and effectiveness of application processing.

Implications for Employers & Immediate Actions

• Update Travel Policies: Employers should revise their travel policies and guidelines to reflect these new digital visa procedures.
• Inform Travelers: Communicate these changes to employees who travel frequently to the Schengen area, emphasising the new platform and reducing the need for in-person visits.
• Monitor Implementation: Stay updated on the rollout and implementation timeline of the new digital visa platform to ensure seamless travel planning.

🇺🇸 United States Advances U.S — 🇹🇼Taiwan Double-Tax Mitigation Bill

Legislation Adopted

The “United States-Taiwan Expedited Double-Tax Relief Act” has been approved by the U.S. House Committee on Ways and Means as of November 30, 2023, signalling a significant step towards resolving double taxation issues between the U.S. and Taiwan.

Key Provisions in a Nutshell

1. Primary Focus: The bill specifically targets permanent establishment, income from employment, and residency issues to mitigate double taxation.
2. Bilateral Cooperation Required: The bill’s effectiveness hinges on Taiwan’s enactment of reciprocal legislation.

Understanding the Impact

This legislative move is pivotal in alleviating double taxation challenges for American and Taiwanese tax residents. It aims to streamline cross-border financial activities and provide clarity for businesses and individuals engaged in U.S.-Taiwan exchanges.

Implications for Employers & Immediate Actions

• Anticipate Taxation Changes: Employers should prepare for potential tax liabilities and compliance changes for U.S. and Taiwanese employees.
• Advisory Consultation: Consulting with tax professionals is advisable to understand the implications of the bill’s provisions on your organisation’s operations.
• Inform Stakeholders: Keep relevant stakeholders, especially those involved in U.S.-Taiwan operations, updated on this legislation’s progress and potential impacts.

🇨🇱 Chile Approves Tax Treaty with the 🇺🇸 United States

Legislation Adopted

The Chilean Senate has approved the income tax treaty with the United States, completing its legislative journey. This followed its prior approval by the Chilean Chamber of Deputies.

Key Provisions in a Nutshell

1. Final Approval: The treaty received final legislative approval on November 15, 2023.
2. Ratification Process: Awaiting ratification by the President of Chile and the exchange of diplomatic letters between Chile and the U.S.
3. Expected Enforcement: Anticipated to be in force by January 2024.

Understanding the Impact

The approval of this tax treaty marks a significant development in the economic relationship between Chile and the United States. It is expected to ease cross-border commerce and mobility of employees between the two nations.

• Double Taxation Mitigation: The treaty aims to alleviate double taxation issues faced by international assignees, enhancing tax efficiency for individuals and businesses.
• Pension Plan Relief: Potential relief for contributions to pension plans, benefiting globally-mobile employees.

Implications for Employers & Immediate Actions

• Policy Review: Employers should review their tax and payroll policies for employees working between Chile and the U.S. to align with the new treaty provisions.
• Communicate Changes: Inform affected employees, especially those on international assignments, about how the treaty may impact their taxation.

🇨🇭Switzerland Upholds Protection for Ukrainians Until March 2025

Legislation Adopted

Following the European Union’s decision, the Swiss Federal Council has extended protection status for Ukrainians until 4 March 2025, aligning with the EU’s temporary protected status.

Key Provisions in a Nutshell

1. Extension of Protection Status: Switzerland will maintain protection status S for Ukrainian displaced people until 4 March 2025, subject to changes in the situation.
2. Current Beneficiaries: Approximately 66,000 Ukrainians hold protection status S in Switzerland.
3. Labour Market Integration: The Federal Council aims to increase the employment rate of Ukrainians from 20% to 40% by the end of 2024.
4. Cantonal Policy Updates: Cantons will face stricter requirements in utilising federal funding, including providing language support and assessing individual support needs.

Criteria for Discontinuing Temporary Protection S Status

Temporary Protection S Status may not be renewed when there is no longer a significant risk for the individuals upon their return to their home countries. This applies when conditions in their country of origin have substantially and lastingly improved, allowing for their safe repatriation.

Understanding the Impact

This extension provides stability and clarity for Ukrainian citizens and Swiss employers. It ensures continued access to education, labour market opportunities, and language courses for Ukrainians in Switzerland.

🇨🇿 Czech Republic Enacts Comprehensive Personal Income Tax and Social Security Reforms

Legislation Adopted

The Czech Republic has passed new legislation impacting personal income tax and social security contributions. The changes, approved by the president and the Czech Senate, are set to take effect from 1 January 2024.

Key Provisions in a Nutshell

1. Income Tax Rate Changes: The threshold for the higher tax rate of 23% is lowered to CZK 1,582,812 annually.
2. Adjustments in Exemptions and Reliefs:
3. Limits set on non-monetary benefits exemption to half the average wage (CZK 21,983 per year in 2024).
4. Abolition of the exemption for managers’ accommodations. Restriction on monetary meal allowances and benefits from the cultural and social fund.
5. Tax Credit Changes: Abolition of certain tax credits, including for students and child pre-school facilities.
6. Sales of Securities and Shares: Exemptions capped for sales of securities and shares meeting the time test, with an annual limit of CZK 40 million per taxpayer from 1 January 2025.
7. Other Income Exemption Limit: An annual limit of CZK 50,000 for other income exemptions.
8. Social Security Contributions: For employees, reintroduction of sickness insurance paid at 0.6%, increasing total contributions to 7.1%. For self-employed persons, an increase in the minimum assessment base and percentage for insurance contributions.

Understanding the Impact

These reforms aim to address financial imbalances in the Czech economy. They will notably impact the taxation of employees, including international assignees, potentially leading to higher taxation and affecting the cost of assignments.

Implications for Employers & Immediate Actions

• Review Payroll Policies: Employers should update their payroll systems to accommodate the new tax rates and social security contributions.
• Inform Employees: Communicate these changes to employees, particularly those affected by the altered exemptions and increased tax burden.
• Tax Planning: Reassess tax planning strategies, especially for tax-equalised assignees, to account for the changes in tax credits and reliefs.
• Compliance Check: Ensure all practices comply with the new legislation, paying close attention to the revised thresholds and exemptions.

🇧🇪 Belgium Announces 2024 Minimum Salary Requirements for Non-EEA Nationals

Legislation Adopted

Belgium’s Flemish, Walloon, and Brussels Regions have set new minimum salary thresholds for 2024, applicable to non-European Economic Area (EEA) nationals working in these regions.

Key Provisions in a Nutshell

1. Effective Date: The new salary requirements are enacted on 1 January 2024.
2. Regional Variations: Each region has specified different salary thresholds for various categories of employees.
3. Categories and Salary Thresholds:

•  Highly-Skilled Employees: €50,310 (Brussels, Wallonia); €46,632 (Flanders)
• Management Personnel: €83,936 (Brussels, Wallonia); €74,611 (Flanders)
• Intra-corporate Transferee (Specialist): €52,042 (Brussels, Wallonia); €46,632 (Flanders)
• Intra-corporate Transferee (Trainee): €32,526 (Brussels); €32,327 (Wallonia); €46,632 (Flanders)
• Intra-corporate Transferee (Management): €65,053 (Brussels, Wallonia); €74,611 (Flanders)
• EU Blue Card: €65,053 (Brussels, Wallonia); €55,958 (Flanders)
• Medium-Skilled Employees in Bottleneck Professions: Minimum salary as per the sector (Flanders).

Understanding the Impact

Meeting these minimum salary requirements is crucial for obtaining legal work permits for non-EEA nationals in Belgium. Non-compliance can result in significant penalties, including fines and possible imprisonment.

Implications for Employers & Immediate Actions

Review Salary Structures: Employers must ensure their pay scales meet or exceed these new thresholds for non-EEA employees.

Budgeting: Plan for potential salary increases to maintain compliance.

Stay Informed: Keep abreast of any further regional variations or updates to these requirements.

Risk Management: Understand the consequences of non-compliance and implement measures to avoid legal and financial penalties.

ILO Releases Guidelines for Assessing Digital Employment

Key Document Published:

The International Labour Organization (ILO) has published comprehensive Digital Employment Diagnostic Guidelines for evaluating and understanding the complex nature of digital employment.

Key Provisions in a Nutshell

1. Purpose of Guidelines: To provide a structured approach for policymakers, researchers, statisticians, and practitioners to assess the impact of digitalisation on employment.
2. Scope of the Document: Covers various aspects, including data collection, impact measurement, and policy development for decent work conditions in the digital economy.
3. Research and Collaboration: Developed through extensive research, global consultations, and expert collaboration, including a pilot study.

ILO’s Digital Employment Diagnostic Guidelines: Significance and Strategic Response

• Awareness and Education: Employers and stakeholders should familiarise themselves with the nuances of digital employment as outlined by the ILO guidelines.
• Strategic Planning: Utilise the guidelines to inform strategic planning and decision-making in adapting to the digital economy.
• Policy Implementation: Develop or revise internal employment policies and practices per the guidelines to ensure fair and decent working conditions in the digital employment sector.
• Data-Driven Approach: Leverage the methodologies suggested by the ILO for accurate data collection and analysis to assess the impact of digitalisation on employment.
• Collaboration and Consultation: Engage in multi-stakeholder dialogues and consultations to address the challenges and opportunities presented by digital employment.

🇳🇬 Nigeria Announces Increase in Visa-on-Arrival Biometric Fees

Legislation Adopted

The Nigeria Immigration Service (NIS) has implemented an increase in biometric fees for Visa-on-Arrival (VOA) applications.

Key Provisions in a Nutshell

1. Biometric Fee Increase: A flat rate increase of USD 80 for VOA biometric fees.
2. Exemption for U.S. Nationals: U.S. nationals are exempt from this fee increase due to the visa fee reciprocity agreement with Nigeria.
3. New Total Fee: Non-U.S. nationals will now pay USD 170 for VOA, excluding other visa and transaction fees.

Understanding the Impact

This fee increase affects the overall cost for foreign nationals (except U.S. nationals) seeking to enter Nigeria via the VOA program, impacting business travel expenses for individuals and organisations.

Implications for Employers & Immediate Actions

• Budget Adjustments: Employers should prepare for increased costs associated with sending representatives to Nigeria.
• Inform Travellers: Update travelling employees about the new fee structure to avoid surprises or delays.
• VOA Approval Process: Ensure that travellers know the documentation and approval process for VOA, including extensions and associated fees.

🇮🇹 Italy Modifies Expatriate Regime Effective January 2024

Legislation Adopted

The Italian government has announced changes to the expatriate regime, set to take effect from 1 January 2024, as outlined in a new Legislative Decree.

Key Provisions in a Nutshell

1. Reduced Relief: Relief under the expatriate regime will be limited to 50%, with a maximum income eligibility cap of EUR 600,000.
2. Residency Requirements: Beneficiaries must have been non-residents for three years prior and commit to a five-year residency in Italy.
3. Eligibility Criteria: The relief is now restricted to highly qualified or specialised individuals, similar to those eligible for a Schengen Blue Card.
4. Duration of Relief: The relief applies from the year of establishing tax residency in Italy and for the next four fiscal years.
5. Condition for Extension: The facility to extend the relief for an additional five years appears to apply only to residents in Italy as of 31 December 2023.

Implications for Employers & Immediate Actions

• Policy Review: Employers should reassess their assignment policies for Italy, considering the altered tax relief and residency requirements.
• Employee Briefing: Inform current and potential expatriates about the new conditions and how they might affect their tax liabilities.
• Eligibility Checks: Establish procedures to ascertain the eligibility of employees for the revised expatriate regime.
• Tax Planning: Update tax planning strategies for expatriates in Italy to align with the new regime and avoid potential financial surprises.

🇦🇺 Australia Enhances Employer-Sponsored Permanent Residence Pathways

Legislation Adopted

Following a year-long review and consultations, the Australian government has announced changes to its Migration Program, particularly affecting the Temporary Skill Shortage (Subclass 482) Visa and the Employer Nomination Scheme (Subclass 186). 

These changes aim to provide more flexibility and certainty for employers and visa holders, enhancing Australia’s ability to attract and retain skilled workers amid skills shortages.

Key Provisions in a Nutshell

Temporary Skill Shortage (TSS) Visa (Subclass 482) Changes

1. Removal of the limit on onshore applications under the Short-Term Skilled Occupation List stream.
2. Previous holders of two Short-Term stream TSS visas must apply outside Australia for a third visa before 25 November 2023.
3. Onshore renewal is now possible for more than one TSS visa under the Short-Term stream.

Employer Nomination Scheme (Subclass 186) Adjustments

• Open to all TSS visa streams, including the Short-Term stream.
• Nominated occupations must be listed in the ANZSCO without requiring skilled migration occupation list assessment.
• Employment requirement with the nominating employer reduced to two years within the three years before nomination.
• Age exemptions are modified for regional medical practitioners and high-income earners over 45 years, with a two-year pathway to permanent residence.
• Certain COVID-19-related age exemptions will be phased out.

Implications for Employers & Immediate Actions

Policy Review: Employers should reassess their immigration and workforce strategies in light of these changes.

Inform and Assist Employees: Update current and potential TSS visa holders about the new application and renewal processes.

Prepare for Permanent Residence Applications: Plan for nominating eligible TSS visa holders under the modified Employer Nomination Scheme.

Stay Updated: Keep abreast of the full details of the changes, especially regarding age exemptions and other adjustments, as they are released.

Tackling Remote Workforce Complexities with Global EOR

Delve into the strategic realms of global employment with our latest guide. This essential resource, tailored for navigating the complexities of international workforce management, is now available. Packed with expert insights, it’s a pivotal tool for businesses expanding globally. Access the Global Talent Acquisition Guide and master the art of global talent acquisition and management with Express Global Employment.

Global Payroll Calculator

Global Payroll Calculator (GPC) is a game-changer for global employers. It empowers you to benchmark and validate vendor quotes precisely and confidently.

In today’s dynamic business landscape, it’s crucial to ensure that the services and pricing offered by vendors align with real-world payroll scenarios and comply with tax and labour laws. GPC does just that, providing you with accurate and up-to-date employment cost estimates.

With Global Payroll Calculator, you can say goodbye to the guesswork and uncertainty of vendor quotes. Make informed decisions and select vendors that offer the best value without compromising compliance or accuracy.

Watch our latest video to learn how Global Payroll Calculator can transform your global expansion strategy!

Wrap-Up

As we conclude this November 2023 edition of our Global Employment Tax and Compliance Newsletter, we hope the insights and updates provided have been enlightening and valuable in guiding your strategic decisions in the ever-evolving global employment landscape.

We encourage you to reach out with any questions or for further discussions on how these changes might impact your business. Stay tuned for our next edition, where we will continue to bring you the latest and most relevant information on global employment.

Thank you for joining us on this informative journey. Until next time, we wish you successful and compliant business operations in the dynamic world of global employment.

Welcome to the October 2023 edition of the Global Employment Tax and Compliance Newsletter. This month, we have curated a selection of topics at the forefront of regulatory shifts and strategic planning across the world.

We’re thrilled to announce that our newsletter now reaches 993 subscribers. Your trust motivates us to keep delivering precise and actionable insights to help you navigate the complexities of international employment, tax, and compliance.

Whether you are an employer adjusting to newly minted regulations or a global employment solutions provider, this edition aims to equip you with the insights you need for operational excellence in a dynamic environment.

🇮🇹Italy Announces Work Visa Quotas for 2023–2025

Overview

In a recent development, the Italian government has published a decree outlining the number of non-EEA workers allowed in the country for the period of 2023 to 2025. The cap is set at 450,000, with 136,000 quotas allocated for 2023 alone. This has important implications for organisations planning their staffing strategies in Italy.

Key Dates

• Quota Announcement: 27th September 2023
• Official Gazette Publication: 3rd October 2023

Application Timelines

• Cooperative Agreement Countries: Subordinate work permit applications from 9am, 2nd December 2023
• Other Subordinate Work: Applications from 9am, 4th December 2023
• Seasonal Work: Applications from 9am, 12th December 2023

Quota Categories

The 136,000 quotas for 2023 are distributed as follows:

Seasonal Work: 82,550 quotas, focused on agriculture and the hospitality and tourism sectors, reserved for certain nationalities.

Subordinate & Self-Employed Work: 53,450 quotas, further broken down as 52,770 for employee work and 680 for self-employment.

Specific Nationalities: 25,000 quotas for nationals of designated countries, including Albania, Egypt, and India, among others.

Cooperative Agreement Countries: 12,000 quotas reserved for future cooperation agreements.

Special Categories: Specific quotas for Italian ancestry holders in Venezuela, stateless persons, refugees, family care and support services, and more.

Strategic Considerations

Planning ahead in line with these quotas can significantly streamline your immigration and staffing strategy in Italy.

🇪🇺EU Extends Temporary Protection for War-Displaced Ukrainians Through March 2025

Overview

The European Council has agreed to extend temporary protection status for Ukrainians displaced by the ongoing war in their homeland. Initially activated on 4 March 2022, this status has now been extended through 4 March 2025, providing clarity and assurance for both affected individuals and their employers within the EU.

Key Extension Details

Extended Duration: From 4 March 2024 to 4 March 2025

Governing Directive: EU Directive 2001/55/EC

Eligibility: Specific to Ukrainians displaced on or after 24 February 2022 due to military actions.

Why Matters

This decision has immediate and significant consequences:

• Labour Market Access: Individuals with this temporary status can work in the EU immediately.
• State Benefits: Includes access to social welfare, housing, healthcare, and education.
• Employer Assurance: Businesses employing these individuals can plan better, knowing their staff have secured status through March 2025.

Categories Covered

The directive covers:

• Ukrainian Nationals: Those residing in Ukraine before the war began on 24 February 2022.
• Stateless and Third-Country Nationals: Who had protection in Ukraine prior to the war.
• Family Members: Of both the above categories.

Future Considerations

The temporary protection is slated to end in March 2025. Discussions are ongoing about subsequent steps, and organisations should stay alert for updates that may impact staffing strategies.

🇬🇧United Kingdom Issue Updated Travel Advisories for Israel

Overview

In the wake of escalating conflicts between Israel and Hamas, the United Kingdom has updated the travel advisories concerning Israel. To safeguard their citizens, government-supported flights have been organised for the repatriation or relocation to safe third countries of U.K. nationals currently in Israel.

State of Emergency

The U.K. government has announced that a state of emergency is in effect across Israel. Unexpected border closures, both air and land, are a possibility in Israel and the Occupied Palestinian Territories (OPTs).

U.K. Advisory

The U.K. government has updated its travel advice and is requesting British nationals currently in Israel to inform the government and to comply with plans for their safe exit from the country.

Why It’s Important

• Security Concerns: The situation is volatile and sudden changes in operational conditions can occur.
• Corporate Responsibility: Companies with employees who are U.K. nationals, or third-country nationals, currently in Israel should be vigilant regarding updates in government policies related to safety and travel.
• Communication Is Key: It’s crucial for employers to communicate the next steps to their workforce in Israel and to implement emergency plans to ensure their safety.

Key Points to Note

• No reported closures of consular offices or embassies.
• Israelis can use a valid foreign passport for travel until 31 December 2023.
• Work permit applications may face delays due to staffing shortages at Israel’s immigration authorities and consulates.
• Israelis have visa-free entry to Schengen countries for a maximum of 90 days in any 180-day period. The legality of remote work during this period should be verified country-by-country.
• As the situation remains fluid, it’s advised to watch updates from travel agents, immigration counsel, and global mobility professionals for the most current information.
• Operations continue at Ben Gurion Airport, though passengers should be aware that some commercial flights have experienced delays or cancellations.

🇦🇺Australia – U.K. Innovation and Early Careers Skills Exchange Pilot (IECSEP)

Overview

The Innovation and Early Careers Skills Exchange Pilot (IECSEP) is an initiative designed to offer short-term employment opportunities in Australia for innovative and early-career professionals from the United Kingdom. This programme is part of the Australia-United Kingdom Free Trade Agreement (A-UKFTA).

Initially, there will be 1,000 visas made available during the first-year pilot of the IECSEP. This allocation will double to 2,000 visas in the second year, at which point the programme will also be reviewed.

Two Key Streams

• Early Careers Stream

Age: 21-45 years

Qualifications: Tertiary education required

Work Experience: At least 3 months in the current organisation

Duration: Up to one year in Australia

• Innovation Stream

Age: No age limit

Expertise: Must demonstrate innovative contributions

Sectors: R&D, Renewable Energy, AI, Medical Tech, etc.

Duration: Up to three years in Australia

Application Steps

• Initial Endorsement: Apply to the Department of Foreign Affairs and Trade (DFAT) for an initial endorsement. Submit employment proof and additional documents based on your stream.
• Letter of Support: If endorsed, DFAT issues a Letter of Support.
• Visa Application: Submit the Letter of Support when applying for the Temporary Work (International Relations) Government Agreement stream (subclass 403) visa.
• Eligibility Factors
• Financial Self-Sufficiency: Must demonstrate financial ability to support oneself and accompanying family.
• Health & Character: All applicants and families must meet standard requirements.
• Processing Timelines: DFAT processing times to assess IECSEP applications are currently unavailable.  Current processing times for the subclass 403 visa, following lodgement with the Department of Home Affairs, are estimated to be 11 days.

OECD Update on International Tax Reform Provided to G20 Finance Ministers (October 2023)

Understanding the Latest Multilateral Convention by the OECD/G20 Inclusive Framework on International Taxation

Highlights

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting has released a new Multilateral Convention. This marks a significant step toward the finalisation of the Two-Pillar Solution, designed to tackle tax issues emerging from the digitalisation and globalisation of the economy.

Overview

The Multilateral Convention to Implement Amount A of Pillar One (MLC) is the latest development from the OECD/G20 Inclusive Framework, aiming to align international tax policies with 21st-century realities. It will soon be discussed at a meeting of G20 Finance Ministers and Central Bank Governors in Morocco.

What MLC Achieves

• Reallocation of Tax Rights: Pillar One focuses on reallocating taxing rights over profits to market jurisdictions, targeting large multinational corporations (MNEs) irrespective of their physical presence there.
• Elimination of Digital Services Taxes: The MLC works toward repealing and preventing the proliferation of digital services taxes.
• Mechanisms Against Double Taxation: It also establishes systems to avoid double taxation, contributing to stability and certainty in international taxation.

Ongoing Discussions

There is a broad consensus on most aspects of the MLC. However, a few issues are still under negotiation among a small number of jurisdictions, who are constructively working to resolve them.

Financial Implications

Pillar One is expected to affect about USD 200 billion in profits annually, leading to global tax revenue gains of between USD 17-32 billion. Low and middle-income countries stand to benefit the most from this redistribution.

Developments on Pillar Two

• Subject to Tax Rule (STTR): This treaty-based rule allows developing countries to “tax back” certain intra-group payments taxed at nominal rates below 9%.
• Global Minimum Tax: Pillar Two introduces a universal minimum tax of 15% on large MNEs, irrespective of where they operate.

Closing Remarks

The release of the MLC is a monumental step in modernising international tax law. It aligns closely with the Two-Pillar Solution’s objectives to tackle tax complexities arising from globalisation and digitalisation. OECD Secretary-General Mathias Cormann calls it a “fundamental reform” in making international taxation fairer and more relevant in today’s digital age.

🇬🇬New Statutory Minimum Wage Rates in Guernsey Effective from 1 October 2023

Effective from 1 October 2023, Guernsey has updated its statutory minimum wage rates for adults and young persons. These changes also include adjustments to the maximum weekly ‘offset’ rates for accommodation and food provided by employers.

Additional Information

Entitlement: Under Guernsey Law, almost all workers are entitled to a minimum wage. The rules apply uniformly regardless of business size or if a private individual employs the worker.

🇬🇧Navigating Employment Practices Under UK Competition Law: CMA Guidance

Introduction:

The UK’s Competition and Market Authority (CMA) has outlined how competition law impacts employment practices, specifically regarding wage-setting and employee recruitment and retention. The advisory is aimed to help employers stay on the right side of the law.

Risky Behaviours in Labour Markets

• No-poaching Agreements: Employers should avoid agreements that promise not to recruit from each other’s staff pools.
• Wage-fixing Agreements: Any form of collusion with other businesses to set a standard rate for employee wages is considered illegal.
• Information Sharing: The disclosure of sensitive employment conditions between businesses can be a violation of competition law.

Preventive Measures

To avoid breaking the law, the CMA recommends that employers:

• Understand the applicability of competition law on no-poaching and wage-fixing agreements.
• Educate HR and recruitment staff about competition law.
• Implement robust internal reporting mechanisms.

Consequences for Violation

Fines can amount to as much as 10% of a business’s global annual turnover. Individuals may also face penalties, including imprisonment for up to 15 years.

Reporting

The CMA encourages reporting of anti-competitive behaviours and offers leniency options, including reduced fines and immunity from prosecution under certain conditions.

🇳🇱Dutch Senate Turns Down ‘Work Where You Want’ Act

The Dutch Senate has rejected the ‘Work Where You Want’ Act a year after its approval by the Dutch parliament. Despite its dismissal, current law mandates employers to consider requests for remote work, as outlined in the existing Flexible Working Act.

What Was the ‘Work Where You Want’ Act?

The rejected bill aimed to strengthen employees’ rights to work remotely within the European Union. If enacted, employers would have been required to permit remote work, so long as the request aligned with reasonableness and fairness, considering all involved circumstances.  

Ambitions of the Rejected Bill

The bill, formally known as the Act Working Wherever You Want, had the ambitious goal of revolutionising workplace flexibility. It was crafted to compel employers to accommodate requests from employees wishing to work remotely within the EU. The requirement for employer compliance hinged on a set of nuanced criteria, namely the balance between employer interests and employee needs, evaluated against a framework of reasonableness and fairness.

Reasons for Senate Rejection

Despite its transformative aims, the Senate struck down the bill, citing multiple concerns. The legislative body argued that the bill’s prescriptive nature would corner employers into an inflexible operational model, hampering their ability to manage business activities effectively. The Senate also questioned the potential adverse effects on employee productivity and workplace morale if the bill were enacted.

Government Commitment to Remote Work Flexibility

Despite the setback, the Dutch government has reaffirmed its commitment to enhancing remote work options. In a recent statement, it declared a vested interest in simplifying remote work conditions for employees while maintaining managerial effectiveness for employers.

Recommendations for Employers

The act could have had far-reaching implications for Dutch businesses. Employers would need to consider foreign employment law and navigate complex tax and social security issues, especially if employees sought to work from other countries. Despite the act’s rejection, employers should still assess workplace adjustment requests as per the Flexible Working Act. Employers should formulate a clear hybrid working policy, including guidelines on how to handle remote work requests.

Spooktacular Feature: Navigate the “Haunted House” of Global Employment with Laughter!

This Halloween, take a break from the ghouls and ghosts to dive into a different kind of adventure—the labyrinth of global employment! If you’ve ever felt navigating international employment laws is like walking through a haunted house 👻, you’ll love our featured video, “Global Employment Adventure: The Fun & Frustration Comedy!”

From the tricks of payroll budgeting in foreign currencies 💱 to the threats of making sense of complex employment laws, this comedy video tackles it all. Think hiring contractors is the magic potion for avoiding complexity? Think again! Misclassifying workers can lead to a real witch-hunt.

But don’t fret; our video introduces you to Express Global Employment, your guiding light 🌟 for compliant and headache-free global expansion.

Watch and learn how to make your employment journey more treat than trick 🍬!

Global Employment Adventure: Fun & Frustration Comedy

Wrapping Up This Spooktacular Edition 🎃👻

As we draw the curtains on this Halloween edition of our newsletter, we’d like to extend a big thank you for joining us on this global employment adventure 🌍🎬.

We hope the insights and resources we’ve shared, including our feature video, have been enlightening and entertaining.

As the nights grow longer, remember: global expansion doesn’t have to be a haunting experience. Armed with the right information, you can turn any challenge into an opportunity 🌟.

So, here’s to a Halloween filled with more treats than tricks and to a global employment journey that’s more sweet than spooky! 🍬👻

Welcome to the September 2023 Global Employment Tax and Compliance Newsletter edition. This newsletter is tailored for employers operating across jurisdictions and global employment solution providers who play a pivotal role in their success.

In the dynamic landscape of global employment, governments worldwide aim to enhance, streamline, harmonise, and customise labour, tax, and immigration laws to align with the evolving needs of their populations and adapt to global trends, such as the rise of remote work. This ongoing process unfolds as employers navigate the complexities of international employment, seeking agile solutions to meet compliance requirements and an ever-changing workforce’s demands.

This edition focuses on the latest developments in employment tax, labour, and immigration laws that emerged by September 2023. Each country’s spotlight dissects these changes, examines their implications for employers, and provides actionable steps for compliance and operational excellence.

Whether you are an employer seeking clarity on a new regulation or a global employment solution provider looking to enhance your client services, this newsletter is designed to meet your needs. 

Poland: Home Office and Permanent Establishment (PE) Concerns 🇵🇱

Legislation Adopted

Polish tax authorities (PTA) and administrative courts have recently addressed the risk of creating a Polish permanent establishment (PE) by a Polish employee working in a home office model. This issue has led to key developments in Polish tax regulations.

In recent individual tax rulings, the PTA has argued that an employee’s private home address, when used as a consistent place of work, could be deemed a fixed place of business at the disposal of a foreign enterprise. This interpretation hinges on the intent to work from home regularly. Additionally, the PTA is actively pursuing PE exposure under the dependent agent concept, especially when Polish employees are involved in contract negotiations, offer presentations, or marketing functions on behalf of the enterprise.

Why It Matters

Understanding the implications of home office arrangements on PE status in Poland is crucial for foreign enterprises. This interpretation by the PTA and supported by recent court judgments underscores the material risk of Polish PE exposure for businesses employing Polish workers.

Implications for Employers & Immediate Actions

• Businesses should exercise caution when allowing employees to work from home regularly.
• Employers should consider home office arrangements’ potential tax and legal implications.
• It’s essential to assess the role of Polish employees in contract-related activities and marketing functions.
• Seek professional advice to ensure compliance with evolving tax regulations and mitigate PE risks in Poland.

Read our Guide on Preventing Permanent Establishment Risk

United Kingdom: Immigration and Nationality Fee Increases 🇬🇧

Legislation Adopted

Legislation was introduced in the UK Parliament on September 15, 2023, paving the way for a series of immigration and nationality fee adjustments scheduled for October 4, 2023.

Key Provisions

These fee adjustments, ranging from 15% to 20%, impact various visa application fees and Certificate of Sponsorship fees in the UK.

The UK government’s decision to increase these fees is a response to the recommendations of independent pay-review bodies, accepted following the Public Sector Pay debate in Parliament. This decision includes raising visa and Immigration Health Surcharge (IHS) fees to support public sector pay rises.

Why It Matters

For employers recruiting and employing foreign nationals in the UK, these fee increases affect multiple immigration and nationality “routes,” encompassing individuals coming to the UK for work, study, and residence.

Assessing the impact of these fee hikes on recruitment, talent acquisition, and budgetary considerations is essential for employers.

Implications for Employers & Immediate Actions

Employers should evaluate the financial implications of the fee increases on their recruitment and talent management strategies.

Considerations include budget adjustments to accommodate higher immigration and nationality fees and potential effects on workforce planning.

Keep a close eye on forthcoming increases to the Immigration Health Surcharge (IHS) and prepare for potential changes in autumn.

Further Details

The fee adjustments, effective from October 4, 2023, vary based on visa categories, with the IHS increases scheduled for later in the autumn due to the associated legal process.

Impacted visas include those for short stays (up to 6 months), longer-term visits (2-, 5-, and 10-year visas), work, study, and residence. The changes also affect fees for indefinite leave to enter or remain, travel documents, health and care visas, Certificate of Sponsorship, and more.

Be aware of adjustments to priority service fees and reduced fees for the “settlement priority” service. Individuals seeking British citizenship through registration and naturalisation and users of the User Pays Visa Application service will also encounter fee changes.

U.S.-Taiwan Tax Relief: A Step Towards Cross-Border Harmony  🇺🇸 – 🇹🇼

Legislation Adopted

On September 14, 2023, the U.S. Senate Committee on Finance unanimously passed the U.S.-Taiwan Expedited Double-Tax Relief Act, marking a significant development in cross-border taxation.

Key Provisions

This bipartisan bill aims to mitigate double taxation challenges faced by American and Taiwanese tax residents while addressing permanent establishment and residency issues.

It contains a critical reciprocity clause, requiring Taiwan to enact reciprocal legislation to activate its measures.

Why It Matters

The bill promotes cross-border commerce, relieving businesses, investors, and workers of international tax complexities. Including the reciprocity clause ensures fairness in tax treatment for U.S.-based companies and individuals investing and working in Taiwan.

Implications for Employers & Immediate Actions

Employers engaged in cross-border activities between the U.S. and Taiwan should closely monitor this legislation’s progress.

If the bill becomes law, businesses operating in these regions should be prepared to adapt their tax strategies to benefit from reduced double taxation.

Italy Extends Remote Work Provisions 🇮🇹

Effective July 2023, Italy has extended remote work provisions to provide support and flexibility to specific groups of employees:

Vulnerable Employees

Individuals suffering from specified illnesses or conditions are now entitled to work remotely or be assigned different duties based on their job until 30 September 2023. A list of these conditions can be found in the Decree of the Minister of Health from 4 February 2022.

Parents with Children Under Age 14

Parents with children under 14 whose job duties allow remote work can continue working remotely until 31 December 2023. This provision applies when no parent is available to care for the child. Parents who are unemployed or receiving income support benefits are considered available for this purpose. Unlike the 2022 regulations, these parents must not sign an individual remote work agreement.

Labour Law Compliance Requirements

Employers must provide these employees with health and safety information annually. Additionally, they must inform the Ministry of Labor about which employees will be working remotely.

Czech Republic’s ‘Digital Nomad’ Program: Simplifying Work Visas 🇨🇿

The Czech Republic has launched a ‘Digital Nomad’ program, effective from July 1, 2023, to facilitate the entry and stay of highly-skilled IT professionals from specific countries, including Australia, Japan, Canada, South Korea, New Zealand, the United Kingdom, the United States, and Taiwan.

What Employers and IT Professionals Should Know

Previously, digital nomads faced a conundrum when seeking visas to work remotely from the Czech Republic. The absence of a dedicated visa category meant relying on business visas, which often didn’t align with the nature of their work. This led to frequent rejections from Czech authorities due to insufficient justification for their stay or non-compliance with stringent conditions.

The ‘Digital Nomad’ program seeks to simplify the entry and work processes for specific worker categories, aligning them more accurately with their intended purpose of stay. The new program aims to streamline this process.

Changes and Aims of the Digital Nomad Program

The program differentiates between two types of digital nomads: those employed by foreign companies working remotely through telecommunications and computerised means and self-employed freelancers holding a Czech trade license.

In both cases, IT specialists must demonstrate a higher education degree in natural sciences, engineering, technology, mathematics, or three years of relevant IT experience. Additionally, they need to prove a minimum income equivalent to 1.5 times the gross annual salary in the Czech Republic.

This initiative ushers in a new era of economic migration in the Czech Republic, providing a streamlined pathway for IT professionals to contribute their skills while embracing the flexibility of the digital age.

France Enhances Bereavement and Parental Leave 🇫🇷

The French government has recently made significant amendments to the Labor Code, focusing on government-paid bereavement and parental leave. These changes, which took effect on 19 July 2023, aim to support employees during challenging times better.

Bereavement Leave

Government-paid bereavement leave after losing an employee’s child has been extended. Parents with children under 25 now receive 14 days of leave, while parents aged 25 years or older are entitled to 12 business days. This extension acknowledges the diverse needs of parents facing this difficult situation.

Leave for Child’s Diagnosis

The government-paid leave that can be taken following the diagnosis of a child’s disability or serious health condition, such as cancer or neuromuscular diseases, has also been extended. This leave, designed to support parents in managing medical and administrative matters, has increased from two to five business days. It complements the current compassionate leave, which can go up to 310 working days.

Teleworking and Flexible Arrangements

The new law grants working parents the right to request teleworking and flexible working arrangements. While employers can refuse these requests, such refusals must be justified in writing.

Next Steps for Employers

Employers are encouraged to review these changes and ensure compliance by adjusting their HR internal policies, employment agreements, company-level collective bargaining agreements, and family-related benefits and policies as necessary. It’s essential to stay informed and adapt to these enhancements in leave provisions.

European Commission Proposes Digitalization of EU Social Security Coordination 🇪🇺

Legislation Adopted

On September 6, 2023, the European Commission unveiled a dedicated Communication proposing advancements in the digitalisation of social security coordination within the European Union (EU). The primary objective of this proposal is to streamline access to cross-border social security services, making the process faster and more straightforward.

Why It Matters for Employers

The digitalisation of EU social security coordination aims to alleviate administrative burdens linked to social security for individuals and businesses. This initiative is expected to enhance information exchange between national administrations, including healthcare providers and labour inspectorates, especially when processing claims for benefits across borders.

Implications for Employers & Immediate Actions

Companies with employees who frequently travel across EU countries for business or leisure should consider revising or establishing compliance processes for social security. One key point of the digitalisation effort is the issuance and verification of documents like A1 certificates for social security coverage.

Proposed Key Measures

The European Commission has called upon member states to take several actions:

1. Accelerate EESSI Implementation: Ensure full operation of the Electronic Exchange of Social Security Information (EESSI) by the end of 2024. EESSI facilitates instant cross-border communication between local administrations, reducing reliance on paper-based communication.
2. Digitalise Access to Benefits: Deliver more social security coordination procedures online, simplifying access to eligible benefits for individuals and businesses.
3. Introduce EUDI Wallets: Implement EU Digital Identity (EUDI) wallets, enabling EU citizens to carry digital versions of entitlement documents such as A1 certificates and the European Health Insurance Card, instantly verifying them by local authorities.

Employee Benefits Guide

Unlock the world of employee benefits with our ‘Employee Benefits Guide for Global Employers.‘ This resource is your compass for understanding and optimising employee benefits on a global scale.

UK Announces Tripling of Penalties for Employers and Landlords on Illegal Migrants 🇬🇧

Legislation Adopted

On August 7, 2023, the U.K. Home Secretary unveiled plans to triple fines for employers and landlords who knowingly hire or house illegal migrants in the United Kingdom, effective early 2024.

Key Provisions

This announcement is a significant step in the government’s efforts to combat illegal employment and housing of migrants. Minister for Immigration Robert Jenrick emphasised the need for proper checks, stating, “There is no excuse for not conducting the appropriate checks.”

Why It Matters for Employers

Businesses employing overseas nationals in the U.K. will face substantially increased penalties for hiring illegal workers. The consequences include larger fines, potential downgrading or revocation of their sponsorship licenses, and damage to their reputation as offending employers’ details will be made public by the Home Office.

It’s essential to note that illegal workers encompass employees, business travellers, students, and others working in violation of their visa conditions. To mitigate these risks, robust compliance systems must be in place, including conducting thorough pre-travel due diligence and correct right-to-work checks.

Implications for Employers & Immediate Actions	Current Penalties	Penalties Effective 2024
Employers Hiring Illegal Workers	Up to £15,000 per illegal worker (First Offense)	Up to £45,000 per illegal worker (First Breach)
	Up to £20,000 per illegal worker (Repeat Offenses)	Up to £60,000 per illegal worker (Repeated Offenses)
Landlords Housing Illegal Lodgers or Renting Illegally	£80 per lodger or £1,000 per occupier (First Offense)	£5,000 per lodger or £10,000 per occupier (First Offense)
		£10,000 per lodger and £20,000 per occupier (Repeated Offenses)

Action Steps for Employers

Employers must prioritise compliance with the Home Office right-to-work checking requirements. This includes conducting proper checks on all prospective employees before employment begins and retaining relevant information in the prescribed format.

Ensuring compliance with these measures is essential to avoid the significant penalties associated with employing illegal workers in the U.K.

Employment Contracts Guide

We’re excited to introduce our ‘Employment Contracts Guide for Global Employers.’ This invaluable resource is designed to assist HR professionals, legal teams, and business leaders in understanding the intricacies of employment contracts across different jurisdictions.

Inside this guide, you’ll find:

🌍 Insights into key elements of employment contracts, including terms and conditions, termination clauses, and more.

Whether you’re expanding your workforce into new territories or simply seeking to enhance your understanding of global employment practices, our Employment Contracts Guide is an indispensable tool.

Conclusion

As we conclude this September 2023 edition of our Global Employment Tax and Compliance Newsletter, we hope that the insights and updates provided have been valuable in navigating the ever-evolving landscape of employment laws and regulations around the world.

As we look ahead to the final months of 2023, we encourage you to reach out to our experts for personalized guidance on specific compliance challenges your organization may face. We’re here to support your global employment needs, offering solutions that empower your business to succeed.

Thank you for choosing Express Global Employment as your trusted partner in global workforce management. We look forward to continuing this journey together and assisting you in achieving your international employment goals.

Stay compliant, stay competitive, and stay connected with Express Global Employment.

🚀 Get Express Quote Today: https://bit.ly/47bskpY

As businesses venture into international markets and consider employing a global workforce, they often grapple with the complexities of calculating payroll across multiple jurisdictions. Different countries have distinct laws, regulations, and tax-reporting frameworks, creating a labyrinth of challenges for companies. Express Global Employment has developed an innovative solution to facilitate global expansion: Global Payroll Calculator. This tool streamlines international expansion by accurately computing the in-country employment costs for local and expatriate staff in over 190 countries.

Utilising the calculator is straightforward. Enter the essential information, such as the target country, tax year, payment frequency, and expected gross salary and currency for the prospective employee. The tool immediately provides a comprehensive breakdown of the payroll calculations. This includes anticipated employer contributions, standard deductions for the employee, and additional notes tailored to the chosen settings within the calculator.

Designed for diverse professionals, the Global Payroll Calculator is an invaluable asset for companies aiming to globalise their operations or those of their clients. It caters to various sectors, including International HR, Global Recruitment and Staffing Agencies, global talent and HR professionals, Global Employers of Record, Global PEOs, global mobility companies, compensation and benefits specialists, executive search consultants, department heads, financial and budgeting experts, and business owners.

Global Payroll Calculator: Budget Your Global Payroll Accurately

Global Employment: Payroll Challenges & Employer Obligations

Operating a business in foreign markets comes with unique human resources challenges, unlike anything you may have encountered in your domestic markets. Factors such as national health care, work visas, work permits, compliant employment contracts, and risks of unfair dismissal claims can vary significantly from country to country. Understanding these issues is critical to successfully expanding your business into new markets.

When expanding your business into overseas markets, you’ll need to consider your talent engagement strategy carefully. Depending on international and local regulations, you may use local hires, ex-pats, independent contractors, full- and part-time employees, or a mix for your business. Different countries have different employment practices, so research what would work best for your company. Remember that your home country’s practices may not apply in other countries. 

Challenge 1: Overseas Employment Contracts

Maintaining accurate employee documentation is critical, as the lack of it could result in unwittingly getting slapped with penalties and fees. When drafting employee contracts, it is crucial to seek legal advice to ensure that they comply with host-country labour laws. In many countries, an employment contract must be written in a language other than English. While a cost may be associated with having a translation, the contract written in the host country’s language will take precedence.

Challenge 2: Employee Misclassification Risk

As an employer, knowing the employment laws and regulations of the country you are doing business is crucial. This is especially true when classifying workers as independent contractors or employees. Independent contractors may seem like a cost-effective solution for businesses. Still, companies should be aware that local authorities in many countries may deem them de facto benefits-eligible employees. Misclassifying a worker can result in significant fines and damage your company’s reputation. This can result in significant fines and reputational damage, so it’s important to ensure you are clear on the legal distinctions between contractors and employees before hiring anyone and budget for full-time employees under host-country laws to avoid those penalties.

Challenge 3: Tax Protection Policies for the Global Workforce

The costs of sending employees on overseas assignments can quickly add up, often totalling two to three times the employee’s salary in their home country. Many businesses establish tax protection policies to alleviate personal tax burdens and attract and retain top international talent. These policies can be complex and costly to manage. 

Challenge 4: Budgeting Immigration Cost

International business travel can be an excellent opportunity for employees to broaden their horizons and gain new skills. However, it can also be a logistical nightmare for employers.

Cross-border employee relocation can be a costly and time-consuming process. Planning and budgeting for immigration, relocation expenses, and allowances are essential to ensuring a smooth transition for all involved.

Challenge 5: Budgeting Termination Cost

As an employer operating globally, you must know the laws and regulations regarding employee rights in different countries. Depending on the country, there may be different rules regarding termination of employment, severance pay, and collective bargaining agreements. In some Western European countries, for instance, terminating an employee can cost up to 12 to 18 months of severance. Global employers must plan for this possibility when budgeting for international talent acquisition.

Challenge 6: Budgeting Employee Payroll and Benefits

As more and more companies expand their operations overseas, they are often surprised to learn that the costs of employee benefits can be much higher in foreign countries than at home. Different countries have different laws regulating payroll, extending beyond the typical health insurance contributions, statutory withholdings, and other benefits that can take a big bite out of a company’s bottom line when operating in a new country.

Local labour, tax, and social security laws may also come into play.  This can be a significant burden for companies operating in multiple countries. 

Challenge 7: Budgeting Taxable Voluntary Benefits 

As an overseas employer, you may be required to offer additional compensation in salary increases, profit sharing, holiday payments, bonuses, car allowances, and more. These voluntary benefits can significantly impact your employment contracts, compensation structure, and payroll operations.  

Depending on the country where you operate, these benefits may be taxed under different schemes than regular salary. Therefore, reviewing and understanding these benefits is essential to ensure compliance with local and international laws and regulations. For employers, it’s often a matter of getting the budget right: how much can you afford to pay for each of these perks?

This is where the global payroll budget comes in. It takes into account every single employee, every payroll period, and every benefit. You should be able to get a rough estimate of the figures involved without too much effort—but it’s worth getting advice from a payroll advisor or a Global Employer of Record if you need a more detailed breakdown.

Challenge 8: Budgeting Paid Time Off 

In today’s economy, being mindful of your company’s payroll budget is more important than ever. Unexpected costs can add up, such as employee vacation and overtime pay. In many countries, employees are entitled to several vacation days and paid time off each year.  When you factor in public holidays, paid time off in some countries in Western Europe can come to nearly two months per year for each employee, plus additional time off for overtime worked. Sick leave benefits can also be a considerable cost for employers operating in multiple jurisdictions. In other countries, for example, employees can collect 70 per cent of their salary for up to 105 weeks of sick leave.

Payroll Budgeting Solution: Global Payroll Calculator 

How is your global talent compensation policy competitive, and how much will it cost? Global Payroll Calculator (GPC) is a SaaS tool that can help you do this. 

Global Payroll Calculator provides a more intelligent way of global talent acquisition and compensation. With detailed data on employer and employee taxes and contributions in 190 countries, Global Payroll Calculator gives users a complete picture of total employment costs. With high accuracy, no hidden costs, and 100% compliance around the world guaranteed, the GPC tool enables users to make intelligent, fast, and informed decisions about locating their businesses or acquiring talent.

So whether you are an employer with a foreign, local, or hybrid workforce that spans multiple countries, an Employer of Record, PEO, or an agency (service provider) assisting with international staffing and recruitment, you can use the Global Payroll Calculator to get accurate worldwide payroll budgeting data and cross-country comparisons in 190 countries. The Payroll Calculator is a valuable resource to get the job done right.

Global Payroll Calculator by Acumen International has been named the Payroll Innovation Award winner for 2022 by the Global Payroll Association. Don’t let the uncertainties of international tax compliance and exposure to foreign labour laws sidetrack your global expansion plans.

To see further than others and act purposefully and confidently to achieve the goal is Nick Ganzha’s roadmap to success. From an early age, he admired the boundlessness and freedom of the Ukrainian nature, and today, his company, Express Global Employment (Acumen International), allows others to be boundless in their global growth and expansion. His international talent acquisition and management organisation, Express Global Employment, provides global HR and employment solutions that enable companies to hire overseas personnel easily and risk-free (in compliance with all legal norms) without establishing their own legal entities in each country. Global Employer of Record Solutions changes the way companies operate internationally. 

The Birth of a Global Employment Industry Pioneer

Nick Ganzha’s business journey began with a Ukrainian staffing and recruitment agency in 2001 when a request came in from Procter & Gamble. The task was challenging because, at that time, the concept of personnel outsourcing didn’t exist in Ukraine. However, Nick had a strong background thanks to his experience at PricewaterhouseCoopers and Accenture, and he created a business model that helped to win the client. As a result, Nick Ganzha is considered the pioneer of staff outsourcing projects in  Ukraine. 

In fact, what started as a local company has grown into a leading global Employer of Record Solutions provider, operating in 190 countries worldwide.

“Serving our clients, I recognised that companies expanding globally need a trusted partner who could help them navigate the complexities of global employment, tax, and compliance. The critical factor that has contributed to the success of Express  Global Employment over the years was my decision 12 years ago to internationalize our business. The journey  continued with a simple yet powerful idea: to help  businesses achieve global growth.” 

From Local to Global

By 2012, Acumen International covered 33 countries where Ganzha’s team provided a complete employment cycle in compliance with local labour legislation. And by 2017, it had already grown into  Express Global Employment, covering 190 countries. 

It was exciting and challenging as the company built its global network. Nick maintains that international business is always difficult and risky,  but with a trusted partner, it turns gratifying. 

We Are the Uber of the Global Employment Industry

And Nick Ganzha loves facing challenges. Today,  his company is a powerful organization that enables businesses of any size, budget, or growth stage to operate anywhere in the world via global personnel hiring: “Employ based on skills, not on geography. The whole world is now your talent pool,” he says. “It’s vital for businesses to expand their limits to become successful. Finding the right people is crucial for your company’s success. Don’t let your city or country  boundaries limit your talent pool.” 

One of the factors that makes Nick’s company stand out is that they excel in exotic countries, areas that are either underserved or hard to operate in. 

We have a well-established infrastructure in these countries, a global knowledge base, and we can provide services there. This is our strength,”  he says. He highlights that this factor enables the company to build partner relationships with competitors: “Express Global Employment offers a very robust and integrated Global EOR solution that even our competitors come to us when they need excellent global HR and compliance support in the most underserved or hard to hire locations. 

Nick Ganzha invested much of the company’s efforts,  time, and money in gaining expertise and creating a  global knowledge base. It was a future-focused investment, so they would be prepared to face any challenges.  “A successful person stands out from the rest by being  ready to seize opportunities when they arise.” 

Express Global Employment provides unique services and tools, such as allowing companies to officially onboard and payroll staff in any of 190 countries within 3-10 working days. Thanks to their Express services, clients can start operating worldwide almost immediately without establishing their own business entities. 

Global Payroll Calculator

Moreover, the company has created the innovative  Global Payroll Calculator that allows businesses to instantly estimate total employment costs across countries to compare and assess various market entries easily. The Calculator was innovative and won the prestigious GPA Award 2022  for Payroll Innovation. In addition, GPA recognized  Acumen International as the 2020 PEO (Professional  Employer Organization) of the Year. 

The Global Payroll Calculator is a SaaS tool by Express Global Employment that the company has been developing for almost four years. Express Global  Employment developed its Global Payroll Calculator covering 190 countries to simplify their sales and service teams’ lives and the daily payroll calculations they make for clients to foster their efficiency. With this, the company streamlined its order-taking and quote formation, making Express Global Employment a client of themselves. “The best possible quality test and success story ever, self-evaluated”, is their tag-line.  Today, offering the Calculator to a global audience,  Ganzha’s team helps clients automate the way they get  their global payroll calculations, providing them with instant insights to:  

• Make informed decisions about global hiring;

• Save time & cost on cost-of-hire estimation in 190  countries; 

• Allocate budgets for planned global expansion –  easily comparing the cost-of-hire in 190 countries  and choosing the best to expand their business; 

• Attract top global talent, regardless of location:  attractive job offers with employees’ net take-home salary calculations. 

Innovating the Future of Global Employment

Gradually, Nick’s ideas drew like-minded individuals to work with him, resulting in a powerful team that helps to develop the company – and Express Global Employment is always on the lookout for new talent. Nick says, “When new people come, they bring fresh perspectives, innovative ideas, and a gust of change.” The company’s headquarters is in London, the UK, with a global operations centre in Nicosia, Cyprus. The company also has offices in Ukraine, Estonia, and the United States. Express Global Employment is pioneering in the global employment industry, transforming how international business and hiring are conducted. Today, its solutions support their clients’ global expansion strategies via international talent acquisition and management and
revolutionize the global HR and payroll field in 190 countries. Nick Ganzha aims to realize his ideas, helping others experience greater freedom.

International business is always challenging and risky, but with a trusted partner it turns very rewarding. We are your reliable partner in ensuring compliant global talent management in 190 countries. 

A Beacon of Corporate Social Responsibility: From Childhood Dreams to Global Impact

Since childhood, he has strived to achieve something remarkable and seemingly unmeasurable, inspired by the great Ukrainian pasture in front of his grandparents’ country house in the Poltava region. Today, Nick Ganzha dreams of peace in Ukraine and helps to bring Victory closer through his unwavering support of Ukrainians during these challenging times. Along with his company, Nick has donated over $200,000 and will continue to donate until the Victory is achieved. What started as Nick’s personal drive has now transformed into the collective engagement of the entire Express team, showcasing their corporate social responsibility as a business before the Ukrainian people and the entire free world.

Since February 24, 2022, Express Global  Employment has been assisting Ukrainian and international companies in retaining the talents that were forced to leave Ukraine due to the full-scale russian invasion. With the company’s solid global  HR solutions, their client companies can continue to legally employ and pay their employees abroad without establishing a physical office. Thus,  they prevent the loss of key personnel, ensure business continuity, and avoid project breaks.  

The Victory of Ukraine is inevitable, as the entire  Ukrainian nation stands for it, and Nick Ganzha strives to represent this through his business and his life. He is a Ukrainian who is changing the perception of what is possible, globalising business and uniting the world. 

This article was initially featured in the book Top USA Entrepreneurs with Ukrainian Origins.

Further Reading: The Global Employer of Record: Ukraine’s Beacon in Turbulent Times

• Global Employment Solutions. How to Mix and Match Them
• Employer of Record: What, Why, How, and When?
• PEO (Professional Employer Organisation): What, Why, How, and When?
• Difference between an EOR and a PEO. Employment Risk Mitigation Strategy
• GEO (Global Employment Organisation): What, Why, How, and When?
• Acumen International, Your Gateway to the Global Talent Market
• Summing Up

Global Employment Solutions — EOR, PEO, and GEO. How to Mix and Match Them

What are the key differences between an EOR, a PEO, and a GEO? This Ultimate Guide to EOR, PEO, and GEO provides a brief overview of some critical differences between three of the most popular global employment solutions helping you decide which option is best for your company. 

Acumen International provides an easy guide to give you the confidence that your company will have success expanding globally and is ready for global expansion and international workforces. This Global Employment Solutions Guide will tell you what to expect and how to navigate the challenges and help you create an effective global employment strategy. With our Global Employment Guide, companies can avoid common pitfalls and set themselves up for success in their new venture.

EORs, PEOs, and GEOs are global employment solutions that help companies hire and retain talent around the globe faster and more efficiently. Each operates differently and suits a unique set of hiring and business needs. Each solution has advantages and disadvantages, making it better suited for specific business strategies. 

Your company needs to grow its global presence, and you’re wondering how you can do it without risking your current business model, resources, and capital.

Hiring employees worldwide is a big responsibility, so some businesses choose to engage talent through third parties. You could try to go it alone and hire an international team from scratch. Or, you could partner with a professional employment organization, such as PEO (Professional Employment Organization), GEO (Global Employment Organisation), or EOR (Employer of Record). Payroll, HR, legal, and immigration processes are often complex for businesses, but these third-party options can take the administrative burden off companies. So why might a business want to hire through one of these solution providers?

The Ultimate Guide to EOR, PEO, and GEO global talent engagement models covers different aspects. It briefly overviews some critical differences between PEOs, EORs, and GEO — three of the most popular hiring solutions helping you decide which model fits your company best. Finally, it outlines Acumen International’s service portfolio— from the initial planning stages to the implementation of any employment model.

Get Express Quote

9 Steps to Help You Navigate Through Global Expansion Journey

1. Determine Your Global Expansion Strategy
2. Building a Global Expansion Team
3. Choose the most business-friendly and cost-effective countries
4. Determine the most effective mode of entry, keeping the ease of exit in mind.
5. Determine the right talent engagement model
6. Develop a robust global talent acquisition strategy. Find an experienced and reliable partner
7. Compliantly hire local and foreign talent in multiple jurisdictions
8. Create Global HR Compliance and Employment Risk Management Strategies
9. Maintain reliable talent management systems. Adhere to local labour laws and HR compliance regulations.
10. Global Talent Retention Programs.

7 Global Employment Challenges to Consider

If you’re thinking about expanding your operations to a global level, you’ll want to consider all the details that go into that decision. That includes everything from choosing the most cost-effective country and the right entity type to preparing for business challenges across borders. Choosing a location that works with your overall strategy and offers lower taxes could be one way to help improve profitability.

As you prepare to expand internationally, it’s crucial to understand how each factor impacts the overall success of your business. Here are some global expansion challenges.:

1. Every country in the world has its own set of unique laws for businesses.
2. The legislative and regulatory landscape is ever-evolving. Keeping track of changes is cumbersome.
3. Global HR Compliance (labour, tax, immigration) laws are ever-evolving and hard to track.
4. Need to understand the local labour market to hire compliantly and risk-free.
5. Need to understand local employment and business practices.
6. Need to understand local competition and benchmark against standard business practices
7. Working with different languages, time zones, customs, and cultures

No matter which countries you expand to or what type of operation you open, there are some significant issues you will always have to deal with. 

Global expansion decisions come with a lot of moving parts. The decision to expand internationally can significantly impact your business, so it’s essential to make sure you handle it correctly.

3 Options for Multi-jurisdiction International Employment

Businesses establishing a global presence face the challenge of managing and scaling an employee base with no common borders or language. To successfully expand abroad, companies have several options for enabling hiring in international markets. 

There are six key things to consider when choosing an employment method for your company’s global expansion:

1. Budget and time frame
2. Tax implications
3. Compliance
4. Employment liability
5. IP protection
6. Asset acquisition.

The most commonly used ways are by doing the following: 

1. Overseas Permanent Establishment (a representative office, a branch, a subsidiary, and other foreign legal entity types )
2. Selecting independent contractors to handle tasks remotely.
3. Work with a global EOR (Employer of Record) and GEO (Global Professional Employer Organisation) Partner. 

Employer of Record: What, Why, How, and When?

What Is an Employer of Record (EOR)?

A professional employer organization (PEO) helps businesses by taking on many employee responsibilities and liabilities. This includes payroll, compensation, benefits administration, and employment taxes. A PEO allows businesses to outsource their human resource functions and focus on their core competencies while accessing their needed workforce.

Why Use an Employer of Record Solution?

Now, more than ever, startups and large corporations alike are struggling with how to hire remote employees and scale their teams globally without running into local labour and tax laws. Employers of Record can help companies achieve their goals while avoiding these legal and HR compliance risks – foreign specialists and knowledge workers fill positions as a service, which gives companies flexible access to talent without hiring them directly.

An Employer of Record (EOR) can also provide a registered entity for running a local, compliant payroll, managing payroll taxes, benefits, deductions, and employee information. An EOR can advise the client on the host country’s required notice periods, termination rules, and severance pay.

An Employer of Record (EOR) like Acumen International can take on all of the responsibilities of hiring an employee for you, including the legal and bureaucratic hurdles, and manage the entire employment process.

The EOR is solely responsible for paying salaries and benefits to employees and ensuring compliance with the host country’s local labour and employment laws. All HR aspects related to hiring an employee abroad are handled by an Employer of Record, which means that the client company does not have to establish a subsidiary or branch office in the target country where it needs to place its employees or contractors. EORs facilitate immigration policies, permits, and work visas for both employers and employees, depending on the conditions of the engagement.

What Services Does Employer of Record (EOR) Provide?

Summing up, the employer of record usually handles part of BPO services, particularly human resources-related issues regarding global remote personnel. These issues include but are not limited to:

• Payroll management;
• Compliance with local tax rules (file & deposit) of the country where the EOR company is located;
• Handling employment contracts: 
• Background, education, and other checks; 
• Onboarding and termination processes, as well as employee’s compensation;
• Arranging visas and work permits for employees;
• Ensuring the working process is organized under local labour laws;
• Processing workers’ medical insurance and other benefits (day-offs, bonuses, and more);
• Process maps, employment guides, and other documentation.

What Services Does an Employer of Record Not Provide? 

On the other hand, here are the services not included in EOR solutions:

• Quality control of employees’ work and their promotion;
• Decisions regarding contract termination and compensation, except for legal document processing;
• Project management.

Who Can Use EOR Services? 

An EOR can be hired by any company that wants to expand internationally but does not want to establish a legal entity abroad due to time constraints or high costs associated with setting up an office abroad. International businesses without subsidiaries may also use this service if they hire only one employee abroad for specialized roles, such as business development managers who scout for new business opportunities in foreign markets or sales directors who manage sales teams working remotely from other countries. 

Companies that want to hire contractors outside their home jurisdiction can also use employers of record to handle contractual obligations such as compensation packages, tax or benefits administration, and immigration permits required by employees worldwide.

Get Express Quote

Benefits of Using an Employer of Record

1. EOR Allows to Skip Incorporation and Avoid The Pitfalls of Setting Up a Local Subsidiary

So you can’t be bothered with local incorporation in your target countries. There is no need to go through the hassle and expense of setting up a local entity via incorporation and registration when you can utilize an Employer of Record. The EOR already has a legal entity that can handle all aspects of payroll, employment, and immigration requirements in the host country, negating the need for your company to do so. In addition, the EOR has the network and in-house expertise to ensure full compliance with local labor laws and regulations, making it the best choice for handling these matters.

2. No Immigration Compliance Issues

Immigration compliance is a top concern for multinational companies. With constantly changing immigration policies and increased scrutiny from foreign governments, it is essential to maintain compliance to avoid legal consequences. 

If you want to avoid the hassle and stress of constantly changing immigration laws and regulations, consider using a GEO solution with a local EOR. The EOR eliminates any risks associated with remote payroll, overuse of business visas, or multiple entries into the country. The EOR takes care of all work permit and visa requirements, ensuring a hassle-free experience with no complications from immigration authorities.

3. EOR Runs Local Payrolls in The Host Country

As an employer, it is crucial to follow local standards for running payroll and withholding deductions for pensions, health insurance, and taxes. Assigning employees abroad requires setting up a registered entity in the host country to comply with these regulations. The EOR can help ensure a smooth transition for employees.

EOR Solution by Acumen International: Global Employment Done Right and Fast

Acumen International’s EOR solution lets customers tap into the local workforce without setting up a new office or bank account. Acumen will take care of the employee onboarding, payroll, and compliance with local tax laws and regulations, freeing customers to focus on the employee’s day-to-day tasks. 

Our global employment cost estimation technology, coupled with our global presence, experience in managing global payroll & local compliance and immigration regulations, and knowledge of local benefits and taxes, allows our clients to optimize the management of their extended workforce. Acumen’s global  EOR services are delivered leveraging a single global platform that ensures data accuracy across all countries of operation.

Get Express Quote

Drawbacks to Using an Employer of Record

A few potential drawbacks to using an EOR may depend on a company’s employment needs and business strategy. Despite the advantages, companies should be aware of these potential limitations before deciding whether or not to use an EOR.

1. It May Not Be Suitable for More Than 10 Employees or Generating over 100K in Sales

A company expanding into a new country may find that an EOR is not the best solution for more than 15 employees. It may consider incorporating an entity and hiring local experts to help manage the payroll process. In that case, the EOR may only be an interim solution to get employees hired quickly.

Suppose you plan on hiring foreign workers to provide services or generate sales over $100,000 annually in any country. In that case, you should consider setting up an overseas subsidiary or branch office. Doing so will help to mitigate the risk of permanent establishment.

2. Employers Give Up Control of Host Country Payroll Process

Many employers are reticent to cede control of payroll processes in the host country to a local EOR, although this is purely for administrative reasons. This may be a completely novel concept against conventional business thinking regarding direct employment for some companies. While it may be a new concept for some companies, using a local EOR can provide greater business flexibility and freedom. 

3. Indirect Relationship between Company and Its Employee

The company relies on the EOR to handle claims since the employment contract is between the EOR and the employee rather than between the company and the employee. While the company does have the rights under its agreement with the employee, these rights are secondary.

Impersonal

PEOs can give your business the personalized attention and care needed to thrive. However, many PEOs are large companies that serve thousands of small businesses. This means that your company and employees could potentially get lost in the shuffle. When looking for a PEO, choose a company that treats its clients right — and gives them the tools, support, and services they need to grow their business. Remember, you always have the option to cancel your services if unsatisfied.

PEO (Professional Employer Organisation): What, Why, How, and When?

What is PEO (Professional Employer Organisation)?

A professional employer organization, or PEO, is a company that provides human resource management services and managed solutions to small, mid-size, and growth businesses. PEOs help businesses grow by taking on many HR-related tasks and responsibilities. Their services include payroll, benefits, HR, tax administration, and regulatory compliance assistance.

PEOs typically enter into a joint-employment relationship with an employer, which gives the PEO responsibility for many employee-related functions such as employee benefits, compensation and payroll administration, workers’ compensation, and employment taxes. PEOs allow businesses to outsource their human resources functions and gain economies of scale by having more benefits options, sometimes at lower rates.

With PEOs, your HR department can function at total capacity. Rather than limiting its scope to the traditional functions of HR, a PEO provides a comprehensive range of HR services tailored to your business needs. With a professional workforce of experts in multiple locations, PEOs ensure that employees work compliantly according to host country laws.

PEO Differentiator

PEOs typically enter into a joint-employment relationship with an employer and generally operate within a single jurisdiction or country, such as PEOs located in the United States. A crucial part of PEO services is assuming responsibility for complying with the laws and regulations governing the payment and reporting of federal and state taxes paid on employee wages.

What Services Does PEO Provide?

If you’re planning to expand your business, you’ll need the help of an expert services partner that can guide you along the way. The team at PEOs usually provides strategic guidance and a wide array of high-quality, cost-effective services tailored to your specific requirements that can help your company grow and scale up safely. Here are some of them:

• Human resources administration, including payroll, taxes, and benefits administration; employee training and development; recruitment; employee relations; compliance training; background or education checks; timekeeping services; 
• Regulatory compliance assistance, including payroll tax law and reporting requirements;
• IP protection and offboarding;
• Hiring and HR compliance services, helping you navigate through local regulations and avoid prohibited HR practices, including discriminatory job listings, Illegal criminal background checks, misclassified workforce, inaccurate payroll, and tax payments;
• Human resource support;
• End-to-end talent management, including recruiting, onboarding, engagement, performance management, and termination (upon employer approval); 
• Liaison with legal counsel on employment issues such as discrimination, wrongful termination, sexual harassment, whistleblower protection, non-compete agreements, severance agreements, and other employment law matters.

Get Express Quote

Benefits of Using PEO (Professional Employer Organisation)

There are many benefits to partnering with a PEO for businesses expanding to new locations. Perhaps the most significant benefit is that PEOs can provide access to cutting-edge global employment solutions that are usually beyond the reach of many organizations. This can give your organization a significant competitive advantage.

Businesses can benefit from the value propositions that PEOs bring to the table in five different ways

1. Improving clients’ ability to attract and retain talent.
2. Enabling clients to focus on their core businesses while PEOs handle HR matters.
3. Expert HR knowledge and resources to improve their overall business performance.
4. Reducing HR-related overhead costs. 
5. Eliminating the need to deal with legal compliance and HR issues.
6. Legal protection
7. Reduced payroll administration costs.

The primary benefit of partnering with a PEO, Professional Employer Organization, is a co-employment relationship that gives you the flexibility to focus your attention on the direction and growth of your business. 

A PEO assumes administrative and HR compliance tasks, enabling you to invest more time in strategic decision-making. Professional employer organizations can provide services to business owners and management teams that they wouldn’t otherwise have the time or expertise to run independently.

Co-employment is an excellent way for growth companies to enjoy the benefits of a professional HR solution on a long-term basis while maintaining direct control over day-to-day operations. A PEO is an organization that provides HR and payroll services but doesn’t hire or terminate employees independently. Those responsibilities are shared between the employer and the PEO.

PEOs typically offer Employment Practices Liability Insurance (EPLI) to their clients, which can offer protection if a former employee sues for wrongful termination or discrimination. This type of insurance can be invaluable for businesses, as it can help cover the costs of litigation and potential damages that may be awarded.

Statistically Proven Benefits of PEO

The National Association of Professional Employer Organizations (NAPEO) has shown in its whitepaper that:

• Businesses in a PEO arrangement grow 7-9 percent faster, have 10-14 percent lower turnover, and are 50 percent less likely to go out of business.
• PEOs can offer a broad array of HR services at a lower cost and offer access to retirement plans to small businesses that may not otherwise sponsor them.
• PEOs provide services to 173,000 small and mid-sized businesses, employing 4 million people.
• There are 487 PEOs in the United States.
• The total employment represented by the PEO industry is roughly the same as the combined number of employees for Walmart (the United States only), Amazon, Kroger’s, and Home Depot.
• The PEO industry’s 173,000 clients represent 15 percent of all employers with 10 to 99 employees.
• The ROI of using a PEO (in cost savings alone) is 27.3 percent.

Drawbacks to Using PEO (Professional Employer Organisation)

PEOs can be a good fit for businesses of all types and sizes. While this model offers many benefits, it also has drawbacks. Here are some of the disadvantages of using PEOs:

1. Higher costs 

The main reason why PEOs cost more than traditional employment is the administrative fees they charge. These fees cover the cost of managing your payroll and other expenses related to hiring employees. On average, these fees range between 10 and 15 percent annually.

2. Lack of control of HR processes and employees

PEOs can be very helpful in managing employee-related activities, but they also lack the flexibility and strength of an in-house team. If you need to change processes or policies, you may have to go through multiple levels of approval before implementing them.

3. No influence on your company culture

A PEO might be able to help you with HR issues, but it probably won’t be able to solve cultural problems that arise within your business. For example, suppose an employee is acting up or causing issues in the office. In that case, an outsourced HR provider may not be able to help you address these issues as effectively as an in-house human resources department would be able to do. The same goes for any other internal problems that arise within your business.

4. The lower value of the In-house HR department

The main disadvantage of using PEO is that you might lose the value of your in-house HR department. You still employ the employees, so all internal policies and procedures are still in effect. If you want to change any of these policies, you must involve the PEO.

Your employees won’t know who’s looking out for them. When an employee has an issue or concern, they might not always know who they should contact at their company or PEO — especially if their employer has multiple locations or works with various providers. This could lead to confusion and frustration among employees who don’t feel like they’re being heard.

Another potential downside is a lack of control and indirect communications. For example, if an employee has a question about their benefits or wants to file a claim for some compensation, they might call their HR representative at the PEO’s office instead of yours. This could mean losing contact with key employees and missing valuable information about your company’s performance.

5. Lack of process customization

A significant advantage of having an in-house HR department is that they can customize people-related processes to fit company culture and needs. With a PEO, these processes will change depending on which partner you select (and whether or not they’ve developed customized processes). If this is important to your company culture or strategy, it may be worth keeping your HR team rather than outsourcing payroll and other services to a PEO.

6. Limited flexibility

Many PEOs have strict rules about when and how you can terminate an employee’s contract with them. In most cases, you must give at least 30 days’ notice before terminating an employee’s agreement with you and pay any applicable taxes and unemployment insurance premiums during that period. This can be problematic if you need to make immediate changes to your staffing levels because it forces you into a situation where you have too few or too many employees at once.

7. Stock options

Considering using a PEO arrangement for your business, it is essential to know

the potential compliance challenges. Stock options can be complicated, and it can be difficult to ensure compliance if the employees are not considered your employees. This should be carefully considered before deciding to use a PEO, as legal complications may be involved.

Tax advisors have noted that it is possible to route significant gains from stock options exercises in other countries through payroll providers (PEOs). PEOs typically charge a percentage of the gross payroll amount, meaning increased earnings from stock options gains can lead to higher PEO costs.

Get Express Quote

What Is the Cost of PEO and EOR Services?

The price of a PEO depends on the specific services it provides and the number of employees you have. When you sign up for a PEO, you must pay setup and ongoing management fees. Some companies also offer discounts for large organizations that use multiple services.

PEO vs. EOR: What’s the Difference Between a PEO & EOR?

Before hiring employees overseas, you should know a few key differences between a Professional Employer Organization (PEO) and an Employer of Record (EOR). While they may seem similar at first glance, they are legally distinct entities with different implications for your business. Understanding the distinction between the two is essential to ensure a smooth and successful international hiring process.

A professional employer organization (PEO) can be a helpful way to outsource some of the administrative tasks associated with running a business, such as a payroll and filing taxes. Co-employment is a term used to describe the relationship between a business and a PEO, where both entities jointly employ workers. This arrangement allows businesses to outsource their HR functions to a PEO. With co-employment, the company and the PEO share responsibility for employment-related obligations. However, it’s important to note that a PEO does not provide access to international hiring if you do not already have a local entity in place. A PEO can be a good option for companies that don’t have an HR department or want to outsource some of their HR functions.

An EOR is a company that takes on the legal risks of employing your workers, including finance, legal & compliance, and safety risks, saving you from any potential problems down the line. This means that all of the responsibilities that come with being an employer are shifted to them — from tax reporting to handling any injuries or issues on the job. You’ll have none of these hassles but will take responsibility for managing your employees’ tasks and performance. Additionally, because an Employer of Record talent engagement model can be used for employees in other countries without setting up a business entity, it is an ideal solution for businesses that want to maintain a presence in multiple countries.

Global PEO and Global EOR Comparison

ATTRIBUTE	PEO	EOR
Employment Model	Co-employer	Sole Employer
Permanent Establishment Factor	Can only work with clients who have a registered in-country (state) entity	Facilitates foreign expansion without setting up an entity
Key Services	Global employment, payroll, benefits, immigration (visa, work permits), mobility	Global employment, payroll, benefits, immigration (visa, work permits), mobility
Responsibilities	Responsible for the entire array of HR functions	Responsible for a portion of HR functions
Tax Administration	Depending on local tax regulations may require taxes to be filed under the client’s taxpayer ID	Files taxes under own Taxpayer ID Number
Payroll Funding	Requires advanced payments from the client	Provides payroll funding
Local Entity Establishment	Required	Optional
Local Entity Ownership	Does not own the entities. Instead, partners with a local or global third-party provider. A PEO  does not allow you to hire in countries where you do not have a local entity.	100 % owns legal entities in the country of service. Allows to hire a workforce in other countries without setting up a business entity
Liability	Shares responsibilities and liabilities	Assumes all responsibilities and liabilities. EOR hires the employees in the new country under its local business entity and takes on all of the legal risks.
Legal Advice	Optional	100% compliance required
Global Labour & HR Compliance	Optional	100% compliance required
Insurance	May require the client to provide their own insurance.	Provide general liability (GL) and workers’ compensation (WC) insurance coverage.
Benefits	Provides higher quality employee benefits at competitive prices	Provides higher quality employee benefits at competitive prices
Employment Agreement	The client must draft and sign the employment agreement with an employee.	Drafts and signs the employment agreement directly.
Pricing Structure	– Fixed monthly fee per employee – Percentage of payroll plus applicable taxes	– Fixed monthly fee per employee – Percentage of payroll plus applicable taxes

GEO (Global Employment Organisation): What, Why, How, and When?

Key GEO Drivers

The global economy has been increasingly shifting in recent years, with more businesses expanding their reach to international markets and taking control over risks. This has led to a rise in the demand for Global Employment Organizations (GEOs), which help businesses navigate the complexities of managing employees in multiple countries. 

Several key factors are driving this trend. First, there is a growing focus on corporate governance and transparency, as investors and regulators place greater emphasis on these issues. Second, the war for talent has intensified as companies compete for the best workers in an ever-shrinking pool. 

Finally, Permanent Establishment risk has become a significant concern for businesses, given the increased scrutiny of multinationals by local tax authorities worldwide. GEOs can provide a valuable service for companies looking to operate internationally, helping them overcome these challenges and maximize their growth potential.

What Is a Global Employer of Record (Global EOR)?

What Is a Global Employer of Record?

When expanding globally, businesses often face the challenge of navigating complex employment laws, tax regulations, and administrative burdens when expanding into new markets. A Global Employer of Record (Global EOR) emerges as a strategic solution, alleviating these complexities and enabling seamless international workforce management.

Unlike a traditional Employer of Record (EOR), which operates within a single country, a Global EOR extends its reach across multiple jurisdictions, offering a unified platform for managing international employees. This centralized approach eliminates the need for companies to establish separate legal entities in each country, streamlining the process of hiring, employing, and managing staff globally.

Global EORs serve as the legal employer for international employees, assuming all responsibilities associated with employment, including payroll, tax withholding, benefits administration, and compliance with local labour laws. This comprehensive support allows companies to focus on their core business objectives without getting bogged down in the intricacies of foreign employment regulations.

The benefits of partnering with a Global EOR extend beyond compliance and administrative relief. Global EORs provide access to a vast network of experienced professionals who possess in-depth knowledge of local employment practices, ensuring that companies adhere to the latest regulatory requirements and avoid costly legal pitfalls.

Moreover, Global EORs offer a cost-effective alternative to establishing local subsidiaries or business units. By centralizing employment functions, companies can avoid the upfront investment and ongoing operational expenses associated with setting up a legal presence in each country.

For companies seeking to test new markets or adopt agile operational strategies, Global EORs prove invaluable. Their flexibility allows companies to quickly deploy and adjust their workforce based on market conditions and business needs, minimizing risk and preserving existing corporate structures.

Businesses expanding globally that don’t want to hire directly or establish foreign legal entities can use Global EORs to comply with local laws quickly and affordably without having to go through the hassle of complying with multiple sets of laws and regulations and risk worker misclassification. With Global EORs, employers can take on ambitious international projects with the best skills available.  

How a Global EOR Can Replace Multiple Vendors

• Payroll Company: Handle payroll processing, tax withholding, and reporting in compliance with local regulations.
• Employee Benefits Broker: Offer comprehensive employee benefits packages that comply with local laws and regulations.
• HR Consultants: Provide HR expertise and support, including recruiting, onboarding, and performance management.
• Background Checks Vendors: Perform background checks and screening to ensure compliance with local regulations.
• IP Attorney: Assist with registering and protecting intellectual property rights in a target country.
• Tax Advisor: Provide tax advice and ensure compliance with local tax laws.
• Translation Service: Provide translation services to help bridge language barriers.
• Legal Advisor: Provide legal expertise and support, including contract review and compliance.
• Immigration Advisor: Provide support with work permits and visas for international employees.

GEO (Global Employment Organization) Differentiator

A Global Employment Organization (GEO) is a subset of employers of record that perform their duties internationally across multiple jurisdictions worldwide.

When Do You Need GEO (Global Employment Organization)?

There are a variety of situations where GEOs may need to manage a globally distributed workforce. A GEO can facilitate quick employment and promote consecutive global moves.

5 Most Common HR Challenges for Businesses Going Global

1. An organization wants to hire the best talent from around the world, regardless of location. 
2. An organization offers remote working options, and employees are allowed to work from anywhere they choose. 
3. In the event of mergers, acquisitions, or sales activities, employees may be stranded in an area without a company presence. A GEO can help employ these one-time, third-country nationals in these cases. 
4. When employees are part of a company’s global mobility program or when they work for a company that operates in multiple countries.
5. An organization must establish tight cost control and management reporting concerning its global mobility program.

Get Express Quote

What Services Does a GEO (Global Employment Organization) Provide?

1. A single point of contact for all your cross-border payroll administration. A specialized employer organization (GEO) administers a local payroll through the EOR, which gives employees the confidence they will receive statutory employment benefits and protections. Local payroll management is one of the most challenging aspects of running any business, so working with an experienced GEO with expertise in global payroll is crucial.
2. A Global Employment Organization (GEO) ensures that the employment contract meets local labor law requirements. A GEO also works with employers to help them understand and comply with employment laws in different countries. The GEO also provides resources and training to employees on their rights and responsibilities under the contract.
3. A Global Employment Organization (GEO) provides work permits and visas for employees from other countries. This makes it possible for these workers to come to the employer’s country and work there for a set period.
4. A Global Employment Organization(GEO) guides clients on employment law matters such as notice, severance, termination, and statutory benefits.
5. Global Employment Organization(GEO) provides communication and coordination between the EOR, client company, and employees through regional account managers, allowing for a more efficient and effective working relationship between all parties involved.
6. A Global Employment Organization (GEO) strives to create global pay strategies and structures that are fair and competitive. They consider many factors when setting pay levels, such as internal business needs and market rates. They also examine how local taxes and regulations can impact those rates to create a cohesive global model.
7. A Global Employment Organization (GEO) can help align HR programs with global functions and business needs

9 Benefits of Using a GEO (Global Professional Employment Organisation) Solution

1. Facilitated and unified global mobility administration 
2. Centralized control over the global workforce 
3. Enhanced international employee and employer compliance 
4. Proactive global workforce cost management 
5. Alignment of global talent with opportunities 
6. Advice on favorable tax, benefit, and social security locations 
7. Reduced permanent establishment exposure risk
8. Simplified global reward structure and administration
9. Multi-location compliance risk management.

Global Employment Cost Forecasting

In today’s business world, it’s more important than ever to be mindful of costs when expanding your company internationally. Hiring talent in different countries can be expensive, so you must know each country’s compliance, tax, labour, and immigration requirements. One way to save money when hiring employees or independent contractors is to choose the most cost-effective and business-friendly country. This can help you reduce expenses by up to 50%.
Different countries have different labour laws and benefits, so it’s essential to do your research before making a decision. So why not take advantage of our Global Payroll Calculator — the advanced country-by-country employment cost comparison tool? With just a few clicks, you can compare the payroll costs, benefits, employer and employee taxes, and mandatory benefits for 190 countries. The Global Payroll Calculator can make finding cost-effective locations for your next global expansion move much easier.
The tool considers local taxes, payroll regulations, benefits, compliance requirements, and other labour-related factors that can impact an employer’s budget. By tracking developments in 190 countries worldwide, the research team behind the calculator strives to keep the data up-to-date so businesses can make informed decisions about expanding their operations internationally.

Acumen International, Your Gateway to the Global Talent Market

Acumen International’s mission is to provide services that make the world smaller. It aims to help businesses of all sizes in any industry reach international growth and expansion through various services.

Are you looking to hire employees quickly and efficiently in any of the 190 countries? Acumen International can help with our Express Global Employment solution. In just 72 hours, businesses can have their globally distributed employees working for them – perfect for when you need to get things up and running immediately. This solution also comes in handy during mergers and acquisitions, helping transfer and retain key personnel during the transition process.

Comprehensive Global EOR and PEO Service Portfolio of Acumen International

• Preparation of mandatory documents for in-country employment and payroll;
• Compliant client and worker onboarding and offboarding in support of global expansion, remote workforce, or merger & acquisition requirements;
• Audit-proof local labour law compliance;
• Compliant statutory and voluntary employee benefits provision and management for local and expatriate talent, including health insurance, automotive leasing, office equipment, accommodation on-demand, and related technology requirements;
• Coordination of monthly payroll, employee & employer tax payment processing, including year-end tax statements, and consolidated monthly invoicing;
• Compensation management, severance, and employee termination services;
• Immigration requirements processing, rendering work permit sponsorship, visa applications & extensions, and expatriate support;
• Global mobility and relocation services;
• Cloud-based Global Payroll Calculator provides total cost of employment estimates for local talent and expatriate personnel;
• Local market benchmarking services for clients considering market expansion (e.g., salary, bonus, the total cost of hire, etc.);
• Tailored on-demand international recruitment and staffing provided through in-country partners (ICPs).

Summing Up

Hiring needs vary in scope and duration, so the type of employee you choose should be based on your specific needs. PEOs are best for small-scale or short-term hiring, while GEOs are the best choice when you need a larger pool of workers.

Cross-border workers are a crucial part of many international companies. Globalization means organizations have expanded by reaching out to new markets and hiring workers from other countries. That complicates compliance because some organizations employ people in multiple countries and may have employment regulations. Managing these workers can be challenging, but there are ways to make it easier. The three innovative global employment models — GEO, PEO, and EOR can help minimize risk, centralize administration, and streamline operations.

Acumen International Global PEO and EOR solutions can help organizations develop effective global employment programs to ensure compliance with local legislation and provide a comprehensive and cost-effective solution across multiple locations. Acumen International is like a tailor-made suit that fits your business perfectly.

Get Express Quote

Welcome to the 8th edition of the Express Global Employment Monthly Global Employment Tax & Compliance Newsletter. This August, we delve into labour and tax regulations and compliance shifts from countries like the Netherlands, France, Singapore, Bulgaria, South Africa, the United Kingdom, and more.

Get ahead of legislative shifts and fine-tune your global employment strategies with unmatched depth and clarity.

Elevate Your Global Expansion Strategy with Our Global Payroll Calculator

As we explore the intricacies of global employment tax and compliance, the importance of having the right tools cannot be overstated. That’s why we’re thrilled to introduce a powerful addition to our suite of services—the Global Payroll Calculator by Express Global Employment.

Introducing Cross-Country Comparison in Global Payroll Calculator!

🌐 Swiftly compare employment costs, taxes, and employee benefits insights across 190 countries:

1️⃣ Streamlined Insights: Tailor and compare costs effortlessly with customizable inputs.

2️⃣ Informed Talent Strategy: Leverage real-time data to make smarter employment decisions.

3️⃣ Competitive Compensation: Stay ahead of the curve with regularly updated data for crafting attractive packages.

4️⃣ Unified Planning: Integrate the Calculator into your broader global employment strategy.

5️⃣ Automated Tax Compliance: Rely on our tool to ensure utmost accuracy in tax calculations every time.

Discover how the Global Payroll Calculator can be your game-changer.

Free Trial

UK Country Spotlight: New Flexible Working Bill Enacted 🇬🇧

1. Legislation Adopted

The UK has enacted the Employment Relations (Flexible Working) Bill, granting workers the right to request flexible working arrangements from the first day of a new job.

2. Why It Matters

This legislative change aims to modernize the workplace and fulfils a 2019 UK government commitment. It shortens the employer response time to two months from three and allows workers to make two yearly requests. The law broadly defines “flexible working, ” including varied work hours and locations.

3. Implications for Employers

The new law poses both benefits and challenges for employers. Research indicates that flexible working boosts talent attraction, employee motivation, and retention. However, employers must now be prepared to handle an increase in flexible working requests and need to respond more quickly.

Key Provisions

• Mandatory consultation before rejecting a flexible working request.
• Two requests are allowed per 12-month period.
• Decision time was reduced from three to two months.

4. Immediate Actions

Employers should promptly review and adjust their work policies to comply with this new legislation to leverage the benefits and avoid penalties.

Australia Country Spotlight: Towards a Unified Labour Hire Regulation Scheme 🇦🇺

1. Legislation in Progress

Australia’s Industrial Relations Ministers have agreed to create a harmonized labour hire regulation model, the Model Harmonised LH Scheme, by the end of October 2023.

2. Why It Matters

This initiative follows the release of a consultation paper in March 2023 by the Department of Employment and Workplace Relations (DEWR), aiming to consolidate existing labour hire licensing schemes from various territories into a single national framework.

3. Implications for Employers

The proposed national scheme suggests:

• Uniform rules for labour-hire providers in all Australian industries.
• Pre-licensing requirements for providers before offering labour hire services.
• A standard license duration of 12 months.
• Strict obligations and potential civil and criminal penalties for non-compliance.

While the exact features of the Model Harmonised LH Scheme are still to be confirmed, it is expected to include elements from existing schemes and offer a mechanism for mutual recognition of labour hire licenses across states to ease the regulatory burden.

4. Immediate Actions

Employers and labour hire providers should stay updated on the development of this scheme as it may introduce new compliance requirements and penalties.

South Africa Country Spotlight: Introducing the Trusted Employer Scheme for Streamlined Work Visas 🇿🇦

1. What’s New?

South Africa’s President Cyril Ramaphosa is rejuvenating the work visa system by introducing the Trusted Employer Scheme (TES). Initially proposed in 2017, this scheme aims to simplify the visa application process for skilled foreign labour, aligning it with global best practices.

2. Why It Matters

The TES will significantly cut down administrative hurdles for vetted employers, making bringing in skilled foreign workers easier and more predictable. This initiative aims to share the government and companies’ administrative burden and compliance risks.

3. How It Works

Employers qualifying for TES will benefit from:

• Faster visa processing times.
• Reduced documentation requirements.
• A dedicated account manager at the Department of Home Affairs.

To qualify, companies must demonstrate:

• Financial capacity to employ foreign nationals.
• Commitment to training South African citizens.
• Corporate responsibility.

4. The Points System

Companies will be evaluated based on:

• Investment in South Africa.
• Workforce composition (at least 60% South African employees).
• Sector of operation (priority sectors get additional points).
• Skills transfer programs.

5. Implications and Penalties

Companies will handle most compliance obligations, and non-compliance will result in strict penalties, including potential expulsion from the scheme and a ban on hiring foreign workers for up to three years.

6. Application Details

• The 30-day window for initial applications.
• Only 100 businesses will be accepted first, with a review after 100 days.
• Decisions will be made within 60 days, and there is no appeal process.

7. Immediate Actions

Companies interested in easing their visa application processes for foreign employees should prepare to apply for the TES as soon as it’s launched.

Singapore Country Spotlight: Revised S Pass Eligibility and Quotas Starting 2023 🇸🇬

1. Overview

Singapore’s Ministry of Manpower (MOM) is modifying the criteria for S Pass holders. The aim is to enhance the quality of this foreign workforce segment to match the top one-third of local APT workers. The changes began rolling out on September 1, 2022, and will continue to 2025.

2. Salary Requirements

Changes to minimum qualifying salaries for S Pass applicants will happen in phases. Age-dependent salary increases will persist.

Sector	From Sep 2022 (New) / Sep 2023 (Renewals)	From Sep 2023 (New) / Sep 2024 (Renewals)	From Sep 2025 (New) / Sep 2026 (Renewals)
All (except Financial Services)	$3,000 – $4,500	$3,150 – $4,650	At least $3,300 (TBD)
Financial Services	$3,500 – $5,500	$3,650 – $5,650	At least $3,800 (TBD)

Note: Final salary figures will be released based on the local APT wage landscape.

3. Changes in Levy Rates

The S Pass Basic/Tier 1 levy rate will rise in increments as follows:

Current Tier 1 Levy	From Sep 2023	From Sep 2025
$450	$450 to $550	$550 to $650

Note: No changes to Tier 2 levy rates, remaining at $650.

4. S Pass Quotas

Starting January 1, 2023, the S Pass quota will be adjusted:

• Manufacturing, Construction, Marine Shipyard, and Process sectors: Down from 18% to 15% of the workforce.
• Services sector: No change.

5. Action Items

Employers should adjust their hiring and retention strategies to accommodate these evolving requirements for S Pass holders.

Singapore: Upgraded Medical Insurance Policies for Foreign Workforce 🇸🇬

1. Key Points

• Effective Date: July 1, 2023
• Policy Update: Enhanced mandatory medical insurance for all Work Permit and S Pass holders, including migrant domestic workers.
• Annual Claim Limit: Boosted to S$60,000, with employer co-pay for claims exceeding S$15,000.

2. Summary

Starting July 1, 2023, Singapore’s Ministry of Manpower will bolster the compulsory medical insurance requirements for all Work Permit and S Pass holders. The annual claim limit will be raised to S$60,000. Importantly, employers will be responsible for co-paying claims surpassing S$15,000.

3. Recommended Actions

1. Review Insurance Policies: Employers should update their insurance packages to meet the elevated claim limits.
2. Budget for Co-Payments: Prepare for potential co-payments on claims that exceed S$15,000.

4. Employer Risks

Non-compliance with the new medical insurance guidelines could result in penalties. It’s crucial for employers to adapt their insurance policies to align with these changes.

New Zealand Country Spotlight: Important Updates to the Accredited Employer Work Visa Scheme 🇳🇿

1. Overview

New Zealand has recently revised its Accredited Employer Work Visa (AEWV) rules, with significant changes taking effect from November 27, 2023.

2. Five-Year AEWV Grants

Starting November 27, 2023, any worker earning at least the median wage will be eligible for a five-year AEWV.

3. Extending Current AEWVs

AEWV holders with visas granted before November 2023 have the option to extend their visas to a total of five years, provided they meet specific conditions:

• Maximum continuous stay requirements
• Unchanged job role, location, and employer
• Wage not below the initial AEWV application rate

4. Partnerships

Partners of five-year AEWV holders may also be able to extend their Partnership Work Visas, pending policy amendments.

5. Median Wage Increase

Immigration New Zealand plans to hike the median wage to $31.61 (approx. US$18.80), up from the current $29.66, by February 2024.

Current Median Wage	Proposed Median Wage	Effective Date
$29.66	$31.61	February 2024

6. Additional Points

After their visas expire, AEWV holders must spend at least 12 months outside New Zealand before re-entry unless they are on a residence pathway.

7. Action Items

Employers should review their current and future hiring strategies to align with these changes.

Spotlight on France: Key Changes in Employment Tax Obligations for 2024 🇫🇷

France’s Finance Act 2022 has introduced new reporting and taxation changes for employers and employees, slated to take effect primarily from January 1, 2024. These pertain to ‘reportable benefits,’ Special Assignee Relief Programme (SARP), Personal Retirement Savings Account (PRSA), and more.

1. Enhanced Reporting Requirements (ERR)

Starting from January 1, 2024, employers will be obligated to report the following non-taxable benefits in real-time via Revenue Online Service (ROS):

• Small Benefits
• Remote Working Daily Allowance
• Travel and Subsistence

2. Preparation Steps for ERR

• Evaluate current data collection methods.
• Assess inter-departmental collaboration.
• Examine ROS system integration.
• Review data quality.
• Reconcile payment timelines.

3. Small Benefit Exemption

Effective January 1, 2022, the small benefit exemption has been raised from €500 to €1,000 annually. Employers can now offer up to two tax-free, non-cash annual benefits, capped at €1,000.

4. Special Assignee Relief Programme (SARP)

SARP has been extended until December 31, 2025. Qualifying individuals can now claim 30% tax relief on a basic salary of at least €100,000, up to a limit of €1m. A mandatory PPS number is required to avail of this benefit.

5. Pension Contributions to PRSA

Two noteworthy changes:

• Employer contributions no longer count as a Benefit-in-Kind (BIK).
• Employer contributions are not considered as employee contributions for tax relief.

6. Shares Options and Revenue Compliance

Revenue has initiated focused compliance activities based on discrepancies identified in annual share reporting forms. Employee obligations now include various reporting and tax-payment requirements.

7. PAYE Revenue Audits

Revenue has resumed PAYE audits. Employers are encouraged to self-review and make necessary corrections to avoid penalties.

Common Audit Areas

• BIK on company cars
• Employee benefits like vouchers
• PAYE application on share awards
• Tax-free mileage and subsistence
• Contractor status assessment

8. PAYE Settlement Agreements (PSA)

For ‘minor and irregular’ benefits, employers can opt for a PSA to remit the corresponding taxes to Revenue. Applications are due by December 31 of the relevant PAYE year.

9. Action Items

Employers should review and adapt their payroll and benefits policies to align with these legislative updates.

Czech Republic: New Whistleblowing Law Affects Employers with 50+ Employees 🇨🇿

A recent legal change in the Czech Republic mandates employers with 50 or more employees to implement internal systems for whistleblowing. The law aims to align with the EU Whistleblowing Directive. Smaller companies, ranging from 50 to 249 employees, can collaborate with other employers to share these systems.

1. Key Changes

1. Impact Date: The law takes effect on August 1, 2023.
2. Employee Count & Deadlines:
   • Employers with 250+ employees: Must comply by August 1, 2023.
   • Employers with 50 – 249 employees: Must comply by December 15, 2023.
3. Employer Risk: Failure to meet these requirements could result in fines up to CZK 1,000,000 (approximately €41,000).

2. Recommended Actions

1. Policy Update: Review and update, if necessary, existing policies on protected disclosures to ensure compliance with the new law.
2. Implementation of Reporting Systems: Employers should either set up an independent whistleblowing system or collaborate with other employers to create a shared system, depending on the company size.
3. Compliance Check: Ensure that all steps are taken to fully comply with the new regulation by the stipulated deadlines to avoid significant financial penalties.

3. Action Items

Companies operating in the Czech Republic should act swiftly to meet the new whistleblowing compliance requirements by the respective deadlines. This involves updating existing reporting channels or setting up new ones in collaboration with other employers, if applicable.

Czech Republic: Upcoming Labour Code Amendment Addresses Remote Work 🇨🇿

A proposed amendment to the Czech Republic’s Labour Code outlines new guidelines for remote work. Employers and employees must note several key changes, including documentation requirements, expense reimbursements, and special provisions for parents with young children.

1. Key Points

1. Effective Date: The changes will be effective on September 1, 2023.
2. Written Agreement: Remote work will now require formalized written consent between the employer and employee.
3. Employer Discretion: Employers may mandate remote work under specific conditions, such as during a pandemic.
4. Expense Reimbursement: Employees can claim reimbursement for expenses incurred while working remotely, either based on actual costs or a flat hourly rate of a minimum of CZK 2.80 (approximately €0.10).
5. Special Provisions for Parents: Employees with children under 15 years old are eligible for remote work under certain circumstances.
6. Employer Risk: Failure to comply with these remote work guidelines could result in fines up to CZK 1,000,000 (approximately €400,000).

2. Recommended Actions

1. Review Existing Policies: Employers should examine their current remote work arrangements and update them to align with the new guidelines.
2. Documentation: Ensure written agreements for remote work are in place, as stipulated by the amendment.
3. Expense Policy Update: Revise expense policies to include options for actual cost reimbursement or flat hourly rates for remote work.
4. Parental Policies: Create or update policies that cover the right of employees with children under 15 to work remotely under specific circumstances.

Netherlands: New Minimum Wage Rates Effective 2023 🇳🇱

The Netherlands has announced an increase in the minimum monthly wage for employees aged 21 and over. This marks a notable change that employers must be aware of, given the financial and reputational risks associated with non-compliance.

1. Key Details

1. Effective Date: The new minimum wage comes into force on July 1, 2023.
2. New Rate: The minimum monthly wage will rise from €1,934.40 to €1,995.00, exclusive of the 8% statutory holiday allowance, for full-time employees aged 21 and over.
3. Employer Obligations:
   • Ensure all employees aged 21 and over receive at least the new minimum wage.
   • Verify compliance for special wage cases, such as when the holiday allowance is bundled into salaries that are three times the minimum wage.
4. Risks for Employers:
   • Wage claims from employees, inclusive of a 50% statutory increase.
   • Fines ranging from €500 to €10,000 per employee from the Labour Authority.
   • Potential reputational damage.

2. Recommended Actions

1. Review Current Salaries: Audit existing employee salaries to ensure they meet or exceed the new minimum wage.
2. Adjust Payroll Systems: Update payroll settings to reflect the new minimum wage from the effective date.
3. Revisit Special Cases: Double-check salary levels for employees who are exceptions, like those with bundled holiday allowances.
4. Communication: If applicable, notify employees of the change and how it will affect them.

Netherlands: Changes to Salary and Termination Rules for Post-Retirement Employees 🇳🇱

The Netherlands is modifying its employment laws to affect those who work beyond the state pension age and fall ill. The change significantly shortens these employees’ mandatory duration of continued pay during illness.

1. Key Details

1. Effective Date: July 1, 2023.
2. New Duration: Continued salary payment during illness for employees working beyond state pension age will now be 6 weeks, down from 13 weeks.
3. Transitional Provision: The 13-week period will still apply for those who reach the state pension age by July 1, 2023, and are already ill. For those who fall ill after this date, the new 6-week rule will apply.
4. Employer Obligations:
   • Be aware of the reduced 6-week continued pay rule for employees working beyond the state pension age.
   • The original 13-week rule remains for employees already at state pension age and sick as of July 1, 2023.
5. Employer Risks:
   • Overpaying salaries if the updated 6-week rule is not followed.

2. Recommended Actions

1. Policy Update: Review and amend company policies to align with the new 6-week rule.
2. Payroll Adjustment: Make necessary adjustments to payroll systems to implement the new rules from July 1, 2023.
3. Employee Communication: Inform all relevant employees about the changes and how it will affect their continued salary in case of illness.

Netherlands: New Minimum Hourly Wage Law Affects Full-time Workers 🇳🇱

Key Points

• Effective Date: January 1, 2024
• New Rule: Transition from a minimum monthly to a minimum hourly wage.
• Implication: Affects full-time employees, regardless of whether they work 36, 38, or 40-hour weeks.

Bulgaria: Upcoming Changes to National Minimum Salary Calculation 🇧🇬

1. Key Points

• Effective Date: Determination by September 1, 2023
• New Formula: Minimum salary to be set at 50% of the average gross wage, based on the previous year’s last two quarters and the current year’s first two quarters.
• Wage Floor: Minimum salary cannot be lower than the previous year’s rate.

2. Summary

Bulgaria’s Council of Ministers will define the national minimum salary for the next calendar year by September 1, 2023. The new salary will be calculated as half of the 12-month average gross wage, encompassing the final two quarters of the preceding year and the initial two quarters of 2023. Importantly, the newly set minimum salary cannot be lower than the rate established for the prior year.

3. Recommended Actions

1. Economic Preparedness: Employers should anticipate the financial implications of an increase in the minimum wage.
2. Document Update: Revise employment contracts or any standard documents that mention the minimum wage to align with the new rate.

4. Employer Risks

Failure to adapt to the new minimum wage criteria could lead to legal repercussions. Employers should proactively adjust their financial planning and employment documents to meet the new guidelines.

Conclusion

In a rapidly evolving global employment landscape, staying abreast of the latest tax and compliance updates is not just an option—it’s a necessity. We hope this month’s Global Employment Tax & Compliance Newsletter has provided actionable insights and a clearer roadmap for international operations. Don’t forget to explore our new Global Payroll Calculator for a comparative analysis that could be a game-changer for your business.

Thank you for allowing us to be your trusted partner in global employment solutions. Stay tuned for next month’s insights as we build a compliant and competitive global workforce together.”

Greetings and welcome to the July 2023 issue of our Global Employment Tax and Compliance Newsletter. As our world rapidly evolves, the arena of international employment, tax, and immigration law keeps pace, consistently offering new challenges and opportunities.

In this edition, we dive into many legislative changes spanning multiple corners of the globe. From the sweeping labour and tax law transformations in the United Kingdom and Ireland to the dynamic alterations to remote work regulations in the United States – particularly New York – this issue leaves no stone unturned. Our journey also takes us to the heart of Europe with a detailed overview of Belgium’s employment laws and crosses oceans to bring you the latest updates from Australia and Malaysia.

Our mission with this Newsletter is more than to inform; we aim to enlighten you, providing you with the insights you need to better comprehend the intricacies of these developments. Whether you are an employer seeking to meet changing obligations across jurisdictions or a global employment professional keeping up with the ever-evolving legal landscape, our expertly curated content is designed to enhance your understanding and preparedness.

As you delve into this month’s edition, we trust you will find the analysis insightful, the updates valuable, and the perspectives thought-provoking. We welcome you to join us in exploring the shifting global regulatory panorama.

Stay tuned, stay informed, and stay ahead of the curve!

🇬🇧 A Sharp Increase in UK Business Immigration Visa Fees Announced

To finance proposed wage enhancements in the public sector, the UK government has declared its intentions to raise various immigration-associated charges significantly.

Changes to Immigration Health Surcharge

An essential modification will be in the Immigration Health Surcharge, an upfront payment due during the visa application for each year of the visa’s validity. The standard rate will experience a jump from £624 to £1,035 per year, and for those under 18 and students, an increase from £470 to £776 per year is planned. To illustrate, a 3-year visa would now necessitate a Health Surcharge of £3,105.

Work and Visit Visa Application Fee Increase

The costs associated with work and visit visa applications are set to climb by 15%. This means that the expense for a 3-year Skilled Worker visa application lodged outside the UK would rise from £625 to £719.

Boost in Other Visa-related Fees

Further increases of at least 20% are expected for fees related to Certificates of Sponsorship, citizenship, settlement, wider entry clearance, study visas, leave to remain, and priority visas. Although no exact date for these increases’ enforcement has been communicated, they’re likely to be implemented in the near future due to the current economic climate.

Implications for Employers

These significant augmentations could drastically affect UK employers who plan to sponsor non-UK/Irish nationals for work in the country, especially when considered alongside the existing Immigration Skills Charge for sponsored work visas, which stands at £1,000 per visa year (£364 per year for small companies and charities).

With these changes, a medium or large employer could potentially shell out a minimum of £7,000 for a single employee’s 3-year sponsored work visa, not including legal advice fees and priority processing charges.

Effects on Sponsored Employees and the Employment Market

While visa costs, except the Immigration Skills Charge, can be shifted to sponsored employees, this might need to be reevaluated given the competitive nature of the recruitment market and the risk of discouraging high-potential candidates. Furthermore, sponsored employees intending to bring dependents to the UK will face these additional costs unless covered by their employers.

Looking Forward

These increased charges should be factored into future recruitment budgets, especially by UK employers heavily dependent on the non-UK/Irish workforce.

🇺🇸 Regulation Updates from New York: Implications for Global Employers

Why New York’s Employment Laws Matter to the World

Even for those outside the United States, changes to employment laws in influential jurisdictions like New York State (NYS) and New York City (NYC) can provide valuable insights into potential global trends. As we see the impact of the pandemic continue to shape workspaces and as Artificial Intelligence (AI) increasingly intertwines with HR functions, these updates offer a glimpse into the future of worldwide employment regulations.

NY Warn Act: Recognizing Remote Work Reality

In response to the pandemic-induced shift towards remote work, the NYS Department of Labor has amended the NY WARN Act, changing how employee count is determined. Remote workers based at the employment site are now considered in the employee count. The updates also streamline the communication method with the Department of Labor, replacing mail and fax notices with electronic submissions via the newly launched WARN Portal.

Increased Transparency & Accountability

The amendments now require employers to provide detailed information about affected employees and changes to how the payment in lieu of notice is treated. Furthermore, invoking exceptions to the NY WARN now includes additional administrative steps, reinforcing accountability.

AI in Hiring: A Brave New World

AI is transforming HR processes globally. NYC’s Local Law 144, regulating AI’s use in employment, came into effect in early 2023. As of July 5, employers must perform an annual “bias audit” on automated employment decision tools (AEDTs) and provide necessary notices before use.

These trends highlight the increasing importance of data transparency, employee rights in the digital workplace, and the potential challenges of AI in HR processes. Understanding these trends as employment laws evolve globally can help employers prepare for the future. Keep an eye on these areas, as the laws in New York often precede broader trends.

To further explore, please check out the FAQ by NYC Department of Consumer and Worker Protection (DCWP).

🇦🇺 Australia Raises Minimum Wages Effective from July 1, 2023

Australia is initiating significant wage alterations from July 1, 2023, following the Annual Wage Review 2022-23. This change in the wage landscape is poised to have widespread effects on employees and employers.

Key Highlights

National Minimum Wage: It will be increased to $882.80 per week, or $23.23 per hour, impacting all employees not within the scope of an award or registered agreement.

Award Minimum Wages: These will rise by 5.75%, applicable to most employees covered by an award.

National Training Wage: It is set to increase in line with the award minimum wage increases. This includes awards pertinent to the terms under Schedule E of the Miscellaneous Award, which have an operative date of 1 July 2023.

High-Income Threshold and Compensation Cap: These will now be $167,500 and $83,750, respectively, which could affect conditions for higher-income employees.

Super Guarantee Rate: This will jump from 10.5% to 11%.

Sector-specific Changes: Supported Employment Services Award will undergo alterations, and the aged care sector will see a 15% wage boost for direct care and some senior food services employees.

For more detailed information, including new pay rate calculations, visit the official Fair Work Commission website or use the Pay and Conditions Tool. Please note that these changes come into effect from the first pay period starting on or after July 1, 2023.

Keeping abreast of these changes is crucial for maintaining fair and legal business practices. Stay informed, and stay compliant!

🇬🇧Significant Immigration Rule Changes in the UK Effective July 17, 2023

The UK government has introduced significant changes to the Immigration Rules, effective July 17, 2023. These changes touch on various aspects, including student visas, the EU Settlement Scheme, the Shortage Occupation List, and more. Understanding these changes is crucial for employers to maintain legal and compliant practices.

Key Takeaways

🇬🇧 New regulations restrict international students from switching to sponsored worker routes.

A few key points are:

Students cannot switch to a sponsored worker route until they finish their course.

PhD students can switch to a sponsored worker route after 24 months of UK study.

Students can no longer apply for permission to stay as a dependent unless certain conditions are met.

EU Settlement Scheme (EUSS): The scheme underwent several updates, including:

Automatic two-year extension for individuals with pre-settled status.

Automatic conversion of eligible pre-settled-status holders to settled status.

Changes in how late applications to the EUSS are considered.

Shortage Occupation List (SOL): The SOL has been updated to include additional occupations from the construction and fishing industries, which will benefit from lower visa application fees and salary thresholds.

Other Updates

A new “genuineness” requirement for the skilled worker, global business mobility, and scale-up routes.

An extension of the application deadline for the Ukraine Extension Scheme is until May 16, 2024.

Impact and Response

These alterations to the UK immigration regulations carry significant implications for employers. Particularly, changes to student visa rules could affect ongoing graduate recruitment programs. Therefore, an immediate evaluation of these rules is necessary. Employers should consult with immigration counsel to assess the implications of these changes and update their policies accordingly.

🇲🇾 Malaysia Refines Job Advertisement Requirements for Hiring Expatriates

Malaysia’s Social Security Organisation (SOCSO) has rolled out significant modifications to the job advertisement process on the MYFutureJobs portal (MFJ). These updates, coming into effect on 15th June 2023, include the cessation of conditional exemptions for roles with specialised skills and a condensed advertising period, now 14 days.

What This Means for Employers

Advertising jobs on the MFJ portal before hiring expatriates has been a prerequisite for businesses seeking the Employment Pass (EP) for expatriates. The new guidelines, while shortening the advertisement period, have simultaneously eliminated the exemption for positions requiring unique skill sets. Therefore, HR and recruitment teams must stay updated on these changes to plan their expatriate hiring strategies optimally.

Why These Changes

The mandatory advertisement of job vacancies on the MFJ portal, introduced in January 2021, forms part of the Malaysian government’s broader initiative to enhance employment opportunities for local talent. Despite this, the dearth of experienced local talent in certain sectors has necessitated expatriate hiring to bridge the skills gap.

Digging Deeper

Here are the three central changes businesses need to be aware of when planning to hire expatriates:

Advertisement Duration: Businesses must now advertise for at least 14 days, down from the previous 30-day requirement.

Reporting Process: The updated process now permits companies to submit a ‘Hiring Outcome Report’ to SOCSO’s designated email address (papd@perkeso.gov.my) on the eighth day after the job advertisement, facilitating the issuance of a support letter.

Exemptions: The earlier provisions allowing the exemption for specialised or niche skills have been rescinded.

These changes serve as a reminder of the dynamic regulatory environment surrounding employment. Businesses must stay updated on these developments to ensure smooth expatriate hiring processes.

🇬🇧 Changes on the Horizon: New Legislation Impacting Employment in the UK

Several impending legislations will bring forth noteworthy changes to employment practices in the UK, encompassing aspects from redundancy and flexible work arrangements to carer’s leave, neonatal care, and the fight against discrimination at the workplace. Here’s a succinct rundown of these laws:

The Safeguard from Redundancy (Maternity and Family Leave) Act

Scheduled to take effect from July 24, 2023, this Act grants a lifeline to employees at risk of redundancy, providing them the right to suitable job alternatives before redundancy is confirmed. Initially limited to employees on maternity, shared parental, or adoption leave, the Act’s scope has been broadened to protect pregnant employees and those recently back from the leaves described above, as well as those who have experienced a miscarriage. Awaiting precise operational details, expected by April 2024, employers should begin to ponder the potential impacts of these extended protections.

The Employment Relations (Flexible Working) Act

Currently awaiting Royal Assent, this Act proposes several transformative shifts, such as:

1. Employees are entitled to submit two flexible working requests annually.
2. Employers are obliged to respond to such requests within two months.
3. Denial of a request mandates consultation with the employee.
4. Employees are relieved from explaining the implications of the proposed working arrangement.

However, the Act doesn’t sanction immediate access to flexible working, with employees still requiring 26 weeks of service to submit a request. While not legally mandatory, offering an appeal option if a flexible working request is denied remains recommended.

The Carer’s Leave Act

With around 600 people quitting jobs daily due to the struggle to balance work and unpaid caregiving responsibilities, this Act, likely to be law by April 2024, introduces an annual provision of one week’s unpaid leave for employee caregivers. Leave can be consumed as a single ‘block’ of five days or spread out to suit individual needs. Evidence of how or for whom the leave is used is not required. In anticipation of this law, employers can consider necessary policy adaptations.

The Neonatal Care (Leave and Pay) Act

Enforced in April 2025, this Act grants parents with a newborn in neonatal care up to 12 additional weeks of paid leave, over and above their maternity or paternity leave.

Worker Protection (Amendment of Equality Act 2010) Bill

This Bill heralds significant evolution in the UK’s workplace discrimination law, with fundamental changes including:

1. Mandating employers to take active steps to prevent sexual harassment at the workplace.
2. Reviving protection from harassment by third parties, with employers held responsible.
3. Provide up to a 25% compensation if employers fail to prevent sexual harassment.
4. In response to this Bill, employers may want to reassess and bolster their existing policies on Bullying and Harassment, fostering a proactive approach to tackling sexual harassment in their organisations.

🇮🇪 Expanding Reporting Duties for Irish Employers – ERR from 2024

In the 2022 Finance Act, Ireland introduced Enhanced Reporting Requirements (ERR) for employers to report specific tax-free benefits provided to employees, known as ‘reportable benefits’. This new mandate is set to kick in on January 1, 2024.

Under the ERR, employers must report tax-exempted ‘small benefits’ such as vouchers or benefits up to a combined value of €1,000 and the daily remote working allowance of €3.20. Additionally, business-related travel and subsistence expense reimbursements fall under this requirement.

Revenue Online Service (ROS) will be the platform of choice for reporting. Employers must submit, correct, and amend ERR data in real-time, before or during employee payment. Employees can view this data through their myAccount from 2024.

This reporting is separate from payroll submissions, intended to protect payroll records’ integrity and avoid accidental creation of new employments for reporting benefits.

To adapt to ERR, employers should start evaluating their existing systems for collating reportable benefits and determine how to integrate current IT systems with Revenue’s online reporting. It’s advisable to review policies on reimbursement of reportable benefits in line with legislation and Revenue guidance.

Remember, this is only Phase I – expect more employee payments and benefits to come within the scope of ERR in the future. Prepare now for a smoother transition when January 2024 arrives.

Employment Law Innovations in Belgium: Strengthening Worker Protections and Toughening Sanctions

In 2023, Belgium’s employment law landscape is set to evolve with many reforms. These are focused on fortifying employment stability, unifying resignation notice periods, and bolstering penalties for non-compliance with social laws. Here are the key details:

Subtitle: “Job Stability for Workers on Successive Temporary Contracts”

Effective from 8th May 2023, Belgium’s Employment Contracts Act of 1978 is adjusted to boost employment stability for individuals on a series of temporary contracts, frequently referred to as “precarious contracts”. Once these contracts surpass two years, the legislation stipulates that conditions typical to a permanent employment contract will take effect. This includes norms associated with a severance payment. For specific exceptions and a deeper understanding, our Belgian employment team is available for guidance.

Uniform Notice Periods Introduced

As of 28th October 2023, blue-collar workers who have been employed since before 1st January 2014 will have a maximum resignation notice period of 13 weeks. The transitional provisions for employees hired before 2014 will be replaced by the standardised notice periods introduced post-2014.

Strengthened Social Penal Code

Belgium is set to revise its Social Penal Code significantly, with increased sanctions for breaches of social legislation, including prison sentences for the most severe infringements. Now, promising a foreigner to work in exchange for payment in Belgium, along with incidents of harassment, sexual harassment, or instances where a worker’s health is endangered, could potentially lead to imprisonment.

Additionally, the practice of ‘social dumping’ – using cheaper labour, for instance, underpaid migrant workers – has been clearly defined and included in the highest level of sanctions. A scientific committee will be formed to aid in the battle against social fraud and dumping. This committee will advise and offer recommendations to shape the inspection services’ strategies and actions.

🇦🇺 Australia Rings in Major Immigration Changes from July 1

The Australian government has recently enacted numerous impactful changes to its immigration policy. These amendments, effective from 1 July 2023, could considerably reshape the landscape for foreign nationals looking to work or live in Australia.

The Implications of Changes

In April 2023, Australian Home Affairs Minister Clare O’Neil announced significant adjustments to the current migration system. These changes aim to facilitate employers in recruiting high-skill overseas workers, provide greater work flexibility for temporary migrants, and retain international students in the country. Consequently, current and prospective visa holders, expatriates, and businesses needing specialized workers may be significantly impacted. Thus, understanding these changes and adhering to the new procedures are essential.

UK Passport Holders: Eased Labor Market Testing

With the enforcement of the Australia-United Kingdom Free Trade Agreement (Australia-U.K. FTA) on 31 May 2023, UK passport holders applying for the Temporary Skill Shortage (TSS) subclass 482 visa are now exempt from the Labour Market Testing (LMT) requirements, paving a smoother path for UK nationals to work in Australia.

Revamped Working Holiday Maker Program for UK Nationals

The Australia-U.K. FTA has also spurred alterations to the Working Holiday Maker (WHM) program and the Youth Mobility Scheme, broadening opportunities for UK nationals. Key amendments include extending the eligible age limit and providing the possibility for multiple Working Holiday visas without specified work prerequisites.

Simplified Australian Citizenship for New Zealand Residents

In a significant step, New Zealand citizens who have resided in Australia for at least four years can now directly apply for Australian citizenship, bypassing the need for a permanent visa first. This change mainly benefits New Zealand citizens with a Special Category Visa (SCV) (subclass 444).

Adjustments in Temporary Skilled Migration Income Threshold (TSMIT) and Visa Filing Fees

Effective 1 July 2023, the TSMIT has increased, and numerous visa application charges (VACs) have also risen. These modifications may affect the cost calculations for individuals and businesses alike, with specific visa fees witnessing significant hikes beyond the consumer price index (CPI).

Elevated Superannuation Guarantee Payments

The Superannuation Guarantee (SG), which mandates employers to contribute a percentage of an employee’s earnings to a retirement fund, has increased from 10.5% to 11% from 1 July 2023. This development impacts subclass 482 visa holders and may add to the cost of international assignments.

Visa Condition Changes for Student Visa Holders and Working Holiday Makers

From 1 July 2023, there have been adjustments to work rights for student visa holders and Working Holiday Makers, primarily in terms of permissible work hours each fortnight. Notably, student visa holders engaged in the ‘aged care’ sector are granted unlimited work rights until 31 December 2023.

Australia’s immigration reform marks a crucial development with potentially far-reaching consequences for individuals and businesses. It further highlights Australia’s dedication to building an environment conducive to attracting and retaining foreign talent.

Harness the Power of the Global Payroll Calculator

Navigating the intricacies of global employment has never been more streamlined, thanks to our Global Payroll Calculator. This essential tool has been designed to optimize global employment operations and guide strategic decision-making on talent acquisition strategy. Here’s a glimpse at the remarkable benefits it brings to the table:

Discover Ideal Talent Pools

Identify the most promising markets for recruiting your global workforce. Global Payroll Calculator tool helps you spot the countries offering the best conditions for your operations.

Easy Cross-country Comparison

Compare employment conditions across a whopping 190 countries effortlessly. With such limitless comparisons at your disposal, making informed decisions becomes as easy as a click.

Stay Compliant with Confidence

With our tool’s detailed tax and compliance data for each country, ensure your operations always stay within the boundaries of the tax and labour law.

Optimize Your Costs

Spot jurisdictions with the best tax rates and social contributions to optimize employment costs. Global Payroll Calculator makes identifying such opportunities straightforward and efficient.

Plan Your Global Payroll Accurately

Utilize the Global Payroll Calculator to craft detailed payroll projections. We enable better strategic global payroll planning and budgeting by offering insights into potential financial commitments.

Spot Employment Patterns

Identify cross-jurisdictional employment patterns and costs that can guide your company’s strategic decisions. The Global Payroll Calculator makes spotting these trends simple and efficient.

Explore the world of global employment with our Global Payroll Calculator and equip your business with the insights it needs to thrive in the international arena.

Try Global Payroll Calculator

Welcome to the June Edition of the Global Employment Tax Compliance Newsletter.

At Acumen International, we pride ourselves on being your trusted partner, providing comprehensive solutions to simplify your global employment operations. We are dedicated to helping you navigate the complex world of employment tax compliance and immigration regulations, allowing you to focus on what truly matters – driving success in your global endeavours.

In this edition, we bring you a wealth of expert insights and professional advice tailored to our clients, partners, accountants, global payroll and tax professionals, employment compliance and global mobility experts.

As the world adapts to new challenges, we understand the critical role immigration plays in global workforce management. Our newsletter also features expert advice and tips to ensure smooth immigration processes for your international employees.

We invite you to delve into this edition of our newsletter, where knowledge meets excellence. Stay informed, stay compliant, and stay ahead of the curve with Acumen International.

European Council Council Advances on Platform Workers’ Rights: Negotiations Set to Begin

The European Council has unanimously agreed on its position. It is poised to negotiate with the European Parliament to establish a groundbreaking law extending employment rights to millions of gig workers.

The platform economy has experienced a phenomenal surge in recent years, with revenues soaring from an estimated €3 billion to approximately €14 billion between 2016 and 2020. Projections indicate that platform workers will reach 43 million by 2025.

While digital platforms have yielded benefits for businesses and consumers alike, they have created a grey area regarding employment status for many platform workers. The European Commission estimates that around 5.5 million individuals currently classified as self-employed are, in reality, engaged in de facto employment relationships with digital platforms, entitling them to the same labour and social rights granted to traditional employees under EU law.

Most of the EU’s 28 million platform workers, such as taxi, domestic, and food delivery drivers, are officially classified as self-employed. However, many are subject to the same regulations and constraints as traditional employees, indicating an implicit employment relationship that warrants the labour rights and social protections guaranteed by national and EU laws.

The European Council’s primary objective is to rectify misclassification instances and streamline reclassifying these workers as employees. Under the Council’s general approach, a digital platform will be legally presumed to employ workers (instead of considering them self-employed) if their association with the platform meets at least three out of seven specified criteria. 

These criteria include 1) income limitations, 2) work refusal restrictions, and 3) regulations governing appearance or behaviour. In cases where the legal presumption applies, digital platforms will bear the onus of proving, in accordance with national law and practices, that no employment relationship exists.

The proposed directive introduces two crucial enhancements: accurately determining the employment status of individuals engaged in platform work and establishing pioneering EU guidelines for using artificial intelligence in the workplace. 

Furthermore, the directive addresses concerns regarding transparency by mandating that workers be informed about the implementation of automated monitoring and decision-making systems. These systems must be supervised by qualified personnel safeguarded against discriminatory treatment, and account suspensions will require human oversight.

Albania Implements Sweeping Changes to Income Tax: Impacts on Corporate, Individual, and Withholding Tax

Albania’s new income tax law, Law No. 29/2023, was published on May 2, 2023, and will take effect on January 1, 2024, replacing the current law from 1998. This new law introduces significant changes to corporate income tax, individual income tax, and withholding tax, including a broader definition of tax residence, stricter requirements for the dividend participation exemption, extended limitations on interest deductibility, specific provisions for long-term contracts, the introduction of an exit tax, and more. 

Here are some key changes to Individual Income Tax under the new law.

1. The new law defines tax residence based on whether an entity is established in Albania or has its place of effective management and control in the country during the tax period. The criteria for management and control in Albania include decision-making, board membership or directors’ residency, and ownership by Albanian residents. In contrast, the current law only considers entities resident in Albania if they have their head office or place of effective management in the country.

2. A revised tax rates system for employment income is introduced, with a top marginal rate of 23%.

3. Controlled foreign company (CFC) rules are introduced, which will subject the income of CFCs to IIT (Individual Income Tax) in Albania, even if the income is not distributed to the Albanian resident shareholder.

4. Employers will withhold the tax on a monthly basis and remit it to the tax authorities by the 20th day of the following month for entities or by the 20th day of each three-month reporting period for self-employed individuals. 

5. To facilitate this process, a new form called the “statement on personal status” will be introduced, requiring signatures from both the employer and employee. The employer indicated on the form will calculate the tax due on employment income and deduct 1/12th of the relevant personal allowance from the monthly tax base based on the annual income level. In cases where an employee holds multiple employments, the second employer will apply the progressive tax rates without deducting any personal allowances.

During the transitional period between June 1, 2023, and December 31, 2023, progressive tax rates will apply to employment income. These rates are as follows:

Income earned by self-employed individuals engaged in professional activities will be classified as employment income. These conditions are:

• At least 80% of the total income generated is obtained directly or indirectly from a single customer.
• At least 90% of the total income generated is derived directly or indirectly from no more than two customers.

However, it is important to note that if the professional services are exclusively provided to nonresident clients, the income generated will be treated as business income, regardless of the abovementioned conditions.

Bulgaria Introduces New Minimum Wage Regulations: Implications for Employers

New regulations on the minimum wage in Bulgaria have been established. The Council of Ministers determines the national minimum salary for each calendar year. By September 1, 2023, the national minimum salary for the upcoming calendar year will be determined. 

It will be set at a level equivalent to 50% of the average gross wage over 12 months, considering the last two quarters of the previous year and the first two quarters of the current year. It is crucial to note that the national minimum salary cannot be lower than the rate set for the previous year.

Employers and payroll professionals should be aware of the potential economic impacts of the minimum wage increase. Additionally, they may need to adjust standard employment documents referencing the minimum wage to align with the new regulations.

Czech Republic: Changes to Czech Labour Code: Simplifying Remote Work Agreements and Cost Reimbursement

The Czech parliament is currently discussing a draft amendment to the Labour Code, which the Czech government has approved. The amendment introduces changes related to remote work, including the requirement for written agreements addressing remote work and reimbursement for remote work costs. The bill has undergone significant modifications since its initial publication last autumn. The final wording of the amendment will be determined after the legislative process is completed, and the bill is expected to come into effect in September 2023.

The revised rules for working from home are highly advantageous for employers. The revised rules make mandatory remote working agreements simpler than the original draft and reduce the obligation for employers to reimburse employees for costs associated with working from home. Additionally, employers can now agree with employees not to reimburse these costs, which helps reduce administrative burdens.

Mandatory remote work agreements are expected to be simplified compared to the original draft. The employer’s obligation to accommodate employees caring for children to work from home has been significantly alleviated. 

Regarding the entitlement to work from home, employees caring for children under 15 or other dependents and pregnant employees no longer have an automatic right to work from home. Instead, they have the right to apply for remote work, and employers must provide written reasons for refusing their request. The age limit for children cared for by employees has been lowered to children under nine years old.

Under the draft amendment, written agreements for remote work will still be required, but the extensive list of mandatory conditions has been reduced. The agreement should cover communication, work assignments and monitoring, cost reimbursement, and occupational health and safety rules, as Czech law currently lacks regulations for remote workers.

Reimbursing employees’ costs related to working from home has been a contentious issue. The amendment now provides three options: reimbursement of actual costs, provision of a lump sum for increased energy costs determined by a Ministry of Labour decree, or an agreement that limits or excludes cost reimbursement. This change is positive for employers, as it addresses administrative and financial burdens associated with remote work.

Slovakia – New Bilateral Agreement with Austria on Tele-Work and Social Security

Slovakia and Austria have signed a bilateral agreement on telework and social security that allows teleworkers to work up to 40% of their total employment from their home country while maintaining social security coverage in their employer’s country. 

The Framework Agreement, signed by the Ministries of Labour in both countries, came into force on June 1, 2023. This agreement addresses the challenges faced by cross-border workers and provides clarity on social security liabilities. It applies to Slovakia and Austria, with specific conditions and requirements. Employers and teleworking employees must stay updated on applicable social security laws and consult professional tax advisers for guidance.

The Framework Agreement specifically applies to Slovakia and Austria, with the employer’s registered office in one country and the employee’s residence in the other. It defines “habitual cross-border telework” as regular employment carried out by the employee in both the employer’s country and their country of residence, using information technology to fulfil assigned tasks. Additional employment or self-employment activities are not permitted, and no third-country element should be involved.

Similar framework agreements have been signed between Austria and the Czech Republic, Austria and Germany.

Uzbekistan Joins OECD/G20 Framework to Combat Tax Evasion and Address Digital Economy Tax Challenges

Uzbekistan has recently joined the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), demonstrating its commitment to fight against tax evasion and address the tax challenges posed by the digital economy. As a member, Uzbekistan will collaborate with other nations on an equal footing to implement the comprehensive BEPS package, comprising 15 measures to curb tax avoidance and promote tax transparency.

Participating in the two-pillar plan, Uzbekistan will contribute to achieving a fairer distribution of taxing rights for multinational enterprises under Pillar One. This will entail allocating taxing rights on an estimated annual profit of USD 200 billion to market jurisdictions. Implementing Pillar One is expected to yield global tax revenue gains ranging from USD 13-36 billion annually, with developing countries benefiting more than advanced economies.

Pillar Two introduces a global minimum corporate tax rate of 15% for companies with revenue surpassing EUR 750 million. This measure is projected to generate approximately USD 220 billion in annual global revenue gains, equivalent to around 9% of global corporate income tax revenues. Beyond financial benefits, Pillar Two aims to enhance tax stability and certainty for taxpayers and tax administrations.

Sweden – New Work-Permit Application Process

Sweden is revamping its work permit certification scheme with a new process prioritising applications into four categories. This initiative aims to streamline and expedite the processing of work permits, particularly for highly-skilled workers from outside the European Union. The new system replaces the existing certification scheme and introduces specific criteria for each category. Let’s take a closer look at the four priority categories:

The Swedish Migration Agency is actively implementing this new process and establishing new entities within the authority. They are expected to report back to the government by 4 September 2023, with the changes set to become operational by the end of the year. This revamped system aims to enhance efficiency and flexibility, enabling businesses to meet their labour needs more effectively and attract highly qualified talent outside the European Union.

The Impact of the German Whistleblower Protection Act on UK-Based Companies Operating in Germany

The German Whistleblower Protection Act, also known as “Hinweisgeberschutzgesetz” or “HinSchG,” came into effect on 2nd July 2023. This act implements the requirements of the EU Whistleblower Directive (Directive (EU) 2019/1937) and introduces mandatory regulations for whistleblower protection in companies with a minimum of 50 employees.

German companies with at least 250 employees and German subsidiaries of internationally active groups are now required to implement internal reporting systems and channels for reporting whistleblowing or breaches. Companies must act promptly and thoughtfully to ensure compliance, as penalties for non-compliance will be enforced starting from 1st December 2023.

Smaller companies have additional time to comply with the act. Companies with 50 to 249 employees are not obligated to adhere to the requirements until 17th December 2023.

Denmark: Transparent and Predictable Working Conditions

New legislation has been enacted to implement the EU Directive on transparent and predictable working conditions for employees, leading to important modifications in employment practices in Denmark. This legislation expands the scope of employee classification, adjusts the timeframe for providing written information, enhances the disclosure requirements for working conditions, and establishes new minimum standards.

Noteworthy updates include:

• Granting employees the right to pursue additional employment unless the employer can provide valid justifications for prohibiting it.
• Allowing employees to request alternative types of employment and receive written explanations for the employer’s decision.
• Introducing regulations for training during employment.
• Ensuring employees receive information about guaranteed working hours when their schedules are unpredictable.

These changes became effective on July 1, 2023. Employers should proactively comply with the new rules by reviewing employment agreements, policies, and procedures. Existing employees employed before July 1, 2023, have the right to request updated employment agreements or additional documentation in line with the new requirements, and employers must respond within eight weeks. 

Failure to comply with the legislation may result in compensation payments. The compensation amounts will align with those outlined in the Danish Contracts Act, typically ranging from DKK 5,000 to DKK 10,000. In aggravating circumstances, compensation may reach up to 20 weeks’ salary, while breaches deemed excusable and of minimal significance are subject to a maximum compensation limit of DKK 1,000.

Ensuring Compliance: Saudization Mandate for Sales Professions in Saudi Arabia

A new Ministerial Resolution has been issued in Saudi Arabia, imposing localization requirements on sales positions within establishments. Effective 24th December 2023, the resolution mandates that sales positions in establishments with five or more workers must be localized to 15%. This means that Saudi nationals must fill a certain percentage of these positions.

The resolution applies to specific sales roles, including sales managers, internal sales and customer services directors, and patent specialists. Employers operating in Saudi Arabia are advised to carefully review the requirements outlined in the resolution and take the necessary steps to comply with the localization obligations.

Failure to adhere to the localization requirements can result in financial penalties and potential restrictions on work license renewals. To mitigate these risks, employers should promptly adjust their employment practices to meet the localization quota and ensure continued compliance with Saudi Arabian labour law.

It is crucial for affected employers to familiarize themselves with the details of the resolution and make the required adjustments to their workforce composition. By doing so, they can ensure smooth operations within the Kingdom and maintain a positive relationship with the local authorities.

Lithuania’s National Visa Procedure Overhaul: Key Updates from July 2023

Effective July 1, 2023, Lithuania has implemented changes to issuing national visas. The Migration Department will now handle this procedure, and all applications must be submitted through the Lithuanian Migration Information System (MIGRIS). However, certain categories of foreign nationals will no longer be eligible to apply for a national visa.

The significance of these changes lies in simplifying the application process for national visas, which will resemble that of a residence permit. The new amendments eliminate the issuance of national visas based on work, with the exception of seasonal work, as well as other grounds that duplicate the reasons for granting a temporary residence permit in Lithuania.

What has changed is that from July 1, 2023, foreign nationals not in Lithuania will be required to apply for national visas through an external service provider designated by the Migration Department. Previously, such applications were accepted by Lithuanian diplomatic missions, consular offices, or visa centres abroad chosen by the Ministry of Foreign Affairs.

A new legal act, “Description of the Procedure for Issuing a National Visa” will be enacted on July 1, 2023. This law will outline the process for submitting documents, providing consultations, issuing or refusing national visas, and cancelling and revoking them.

Starting from July 1, 2023, all applications for national visas must be submitted through the Lithuanian Migration Information System (MIGRIS) via the website. The option to fill out applications through the Electronic Application Module (EPM) will no longer be available.

The grounds for granting national visas will also change. According to the Migration Department, as of July 1, 2023, national visas will no longer be issued to the following individuals:

• Full-time students intending to study at higher education institutions registered and operating in Lithuania.
• Teachers and researchers coming to work in higher education institutions under employment contracts.
• Foreign nationals coming to work in professions listed as “missing professions.”
• Foreign national employees who possess a work permit issued by the Employment Service.
• Citizens of Australia, the United Kingdom, the United States, New Zealand,  South Korea, and Canada who previously obtained national visas through a simplified process.
• Foreign nationals who have applied to obtain or change an EU citizen’s residence permit or a family member card.
• Foreign nationals for whom the Migration Department has decided to issue a residence permit or a family member card of an EU citizen.

To legally enter and stay in Lithuania, foreign nationals falling under these categories will need to apply for a temporary residence permit instead of a national visa.

Global Payroll Calculator

Acumen International provides Global Payroll Calculator, a comprehensive SaaS solution for global employment needs. This cutting-edge tool streamlines your global operations by automating processes, providing valuable global employer and employee tax insights across 190 countries, and ensuring compliance with global employment regulations.

With this powerful tool, you can unlock a range of key benefits:

1. Gain visibility into global employment tax and compliance intelligence.
2. Access the latest tax benchmarks, labour market trends, and compliance insights.
3. Attract and retain talent in a competitive marketplace.
4. Make data-driven decisions about compensation and talent sourcing.

Wrap Up

We hope the information shared will help you make informed decisions and stay compliant across multiple jurisdictions.

At Acumen International, we remain committed to providing unparalleled support as your trusted Global Employer of Record partner. As you continue your journey in managing a global workforce, we encourage you to stay connected with Acumen International for ongoing updates, industry news, and expert guidance.

Thank you for being a part of our valued network of clients, partners, and professionals. We look forward to serving you in the future and wish you continued success in all your global endeavours.

The recruitment landscape has undergone a profound transformation in the era of globalisation, with businesses seeking top-tier talent across borders. As a result, specialised recruitment services have emerged as a crucial necessity in sourcing and acquiring exceptional candidates worldwide.

In this article, we delve into the advantages and augmentation that Global Employer of Record (EOR) can offer to global recruitment service providers. Simultaneously, we address these providers’ persistent challenges in the ever-evolving global talent market. By understanding the advantages of leveraging Global EOR services, recruitment professionals can optimise their operations, expand their reach, and offer clients a seamless and compliant global recruitment experience.

Addressing 11 Recruitment Challenges in a Competitive Talent Landscape

In the fast-paced and competitive global talent market, global recruitment service providers face many challenges as they strive to meet the diverse needs of their clients ― employers running international operations across multiple locations. These challenges encompass various aspects of the recruitment process, from sourcing and attracting candidates to ensuring a positive candidate experience and streamlining hiring operations.

We will examine each challenge in detail, exploring the underlying issues, potential impacts, and the importance of addressing these challenges for the success of recruitment service providers. By understanding and analysing these challenges, recruitment professionals can gain valuable insights into the complexities of the global talent landscape, overcome these hurdles and optimise their recruitment efforts.

Precision in Talent Acquisition: Attracting the Perfect Fit Candidates

One of the primary challenges for recruitment service providers is attracting highly qualified candidates who align with their clients’ specific requirements. Attracting suitable candidates is a perennial challenge in talent acquisition. Recruitment service providers face the task of developing targeted sourcing strategies, crafting compelling job advertisements, and utilising various channels to reach potential candidates. In a competitive talent market, standing out and effectively attracting top talent requires innovative approaches and an in-depth understanding of candidate preferences and motivations.

Engaging Qualified Candidates

Engaging qualified candidates goes beyond simply attracting their initial interest. To maintain candidate engagement, global recruitment service providers must foster meaningful interactions throughout the recruitment journey. This includes effective communication, timely feedback, and personalised attention to candidates’ needs and aspirations. Engaging candidates requires building relationships, highlighting the value proposition of the role and the organisation, and addressing their concerns to keep them invested in the opportunity.

Hiring Fast

Hiring swiftly is a critical challenge for recruitment service providers. In today’s fast-paced business environment, delays in the hiring process can result in the loss of highly qualified candidates to competitors. Achieving an expedited recruitment timeline necessitates streamlining internal processes, efficient stakeholder coordination, and leveraging technology to automate candidate screening and evaluation tasks. By minimising bottlenecks and ensuring a well-structured hiring process, recruitment service providers can secure top talent before they explore other opportunities.

Maintaining a Strong Employer Brand through Recruitment Companies

A strong employer brand attracts the best candidates and fosters long-term retention. Values like respect, generosity, and flexibility are fundamental in today’s competitive talent market, where candidates extensively research organisations to find the right fit. Global recruitment service providers assist clients in crafting a compelling employer brand that aligns with these values, serving as an intelligent recruitment strategy.

Collaborating closely with clients, recruitment service providers shape and promote an appealing employer brand that resonates with candidates seeking a supportive work environment. They showcase clients’ positive attributes, unique strengths, and differentiation. By effectively conveying the employer brand, recruitment agencies attract qualified candidates who align with the organisation’s values, establishing it as an employer of choice in the talent market.

Crafting Compelling Employer Value Propositions: Remote Work Flexibility and Employee Benefits

In a competitive talent market, recruitment providers must emphasise remote work flexibility and a comprehensive range of employee benefits in their employer value proposition. Remote work options attract candidates seeking work-life balance while showcasing statutory and voluntary benefits demonstrates the organisation’s commitment to employee well-being. By integrating these crucial elements into the employer value propositions, recruitment agencies position their clients as enticing employers, captivating and retaining exceptional candidates in the fiercely competitive talent landscape.

Talent Mapping for Efficiency: Maximizing Recruitment and Tax Planning

In the global talent market, recruitment service providers are challenged to obtain accurate talent location insights. Understanding the geographic distribution of talent and the total cost of hire is crucial for effective sourcing strategies and empowering tax, payroll, and compensation planning for local and foreign talent hiring.

Global recruitment agencies gather data on regional talent pools, job market dynamics, and payroll and tax considerations to address this challenge. This information guides strategic decision-making, ensuring compliance and optimising talent acquisition efforts. By integrating talent location insights with tax and payroll planning, providers offer valuable guidance to clients, facilitating informed decisions and efficient management of human resources across jurisdictions.

Utilising Data and Analytics

Data and analytics have become invaluable tools in talent acquisition. Recruitment agencies can leverage data to gain insights into candidate preferences, job market trends, and the effectiveness of their attraction strategies. By harnessing these insights, service providers can make data-driven decisions, refine their approaches, and continuously improve their candidate attraction efforts.

Diversification of Recruiting Strategies to Meet the Needs of Global Employers

As global employers expand their operations across borders, they encounter unique challenges in sourcing and attracting talent in different regions and markets. To effectively meet the needs of global employers, recruitment service providers must adapt strategies to cater to different regions, cultures, and talent pools.

Beyond legal obligations, unbiased hiring practices yield business advantages by selecting the most qualified candidates free from prejudiced assumptions. This cultivates an inclusive work environment, exemplifying meritocracy and harnessing the positive impacts of diversity.

Global employers require diversified recruiting strategies to attract talent across multiple locations and diverse markets. Recruitment service providers This involves understanding local labour markets, cultural nuances, tax, immigration, and legal requirements.

Navigating Complex and Evolving Global Employment Laws to Achieve Compliance

Global recruitment agencies face the challenge of navigating intricate and ever-changing employment laws across different countries and regions. Each jurisdiction has its own set of regulations governing various aspects of employment, such as hiring practices, employment contracts, working hours, and termination procedures.

By implementing diversified global recruiting strategies, recruitment agencies help global employers overcome the challenges of operating in diverse markets. Their expertise in local labour dynamics, cultural understanding, and compliance ensures that clients can attract, engage, and hire the right talent in each target market. Through tailored approaches and strategic partnerships, providers maximise their clients’ ability to achieve their global talent acquisition goals and gain a competitive edge in international markets.

Recruiters must stay abreast of legal, tax, immigration, and other employment-related regulatory compliance requirements to ensure compliance and mitigate legal risks for themselves and their clients.

Recruitment agencies must collaborate closely with legal experts to ensure compliance and mitigate risks associated with international recruitment. This collaboration allows them to navigate the intricacies of each market’s legal landscape, ensuring a smooth and legally sound hiring process while safeguarding against potential pitfalls. By prioritising compliance, recruitment agencies can confidently expand their global talent acquisition efforts and deliver exceptional recruitment solutions to their clients.

Talent Scarcity and Skill Gaps in Global Talent Acquisition: Tapping into Global Talent Pools

In global talent acquisition, recruitment service providers face the dual challenges of talent scarcity and skill gaps. Recruiters must adopt proactive measures and strategic approaches to overcome these obstacles, including tapping into global talent pools.

Monitoring trends and implementing targeted sourcing strategies allow recruitment agencies to address talent scarcity and skill gaps by identifying emerging talent pools, niche skill sets, and in-demand expertise. This enables them to engage with potential candidates and establish talent pipelines aligning with clients’ requirements.

Understanding international labour markets, cultural nuances, and legal requirements is also crucial for global talent acquisition success. Recruitment service providers conduct thorough research, leverage local networks, and collaborate with global employment service providers to navigate complex employment laws and compliance obligations.

By consolidating their expertise in talent scarcity and skill gaps with a proactive approach to tapping into global talent pools, recruitment service providers bridge the divide between client demands and the available talent pool. This strategic approach enables them to deliver tailored solutions, attract top talent, and achieve successful outcomes in the global talent landscape.

Balancing Cost-effectiveness and Quality of Recruitment Services

Global recruitment agencies strive to balance cost-effectiveness and the delivery of high-quality recruitment services. They face the challenge of optimising their operational efficiency while not compromising on the quality of talent acquisition. This involves managing resources effectively, leveraging technology and automation where applicable, streamlining processes, and continually evaluating the efficacy of their recruitment methods. Recruitment agencies must also stay competitive in pricing and service offerings to attract and retain clients.

Transforming Global Talent Acquisition: The Strategic Alliance of Global EOR and Recruitment Experts

Within the ever-changing talent ecosystem, global recruitment agencies face many challenges. However, recruiters can effectively tackle and overcome these hurdles by collaborating with Global Employer of Record (Global EOR) services.

Collaborating with a Global Employer of Record (EOR) empowers recruitment service providers with various benefits, transforming their operations and amplifying their success in the global talent market.

In the following sections, we will delve into the benefits and augmentation that global employment service providers bring to global recruitment service providers and the challenges these providers face in the current global talent market.

Accelerated Market Entry and Streamlined Hiring Process

Expanding into new markets requires significant time, resources, and knowledge of local business practices. Leveraging the infrastructure and legal entities provided by Global EORs, recruitment service providers can help expedite market entry for their clients.

Partnering with a Global Employer of Record provides recruitment agency clients access to established legal entities and infrastructure in multiple jurisdictions. This streamlines global expansion, simplifies administrative operations, and ensures employment laws and tax regulations compliance. It empowers clients to focus on their core business while leveraging the expertise and support of a Global EOR for efficient and compliant international employment.

Through this streamlined approach, recruitment agencies can enhance operational efficiency, accelerate time-to-hire, and deliver exceptional recruitment services to clients. By leveraging the infrastructure and expertise of a Global Employer of Record, recruiters can achieve a competitive edge in the talent market and establish themselves as trusted partners in the recruitment process. This allows recruitment agencies to seize opportunities promptly, tap into local talent pools, and expand their clients’ global footprint with agility.

Compliance Expertise: Leveraging Global Employer of Record (Global EOR) Services

When it comes to global recruitment, compliance with labour laws, tax regulations, and immigration requirements is paramount for end employers operating in the global arena. Global Employer of Record (Global EOR) services specialise in navigating compliance’s complex and ever-evolving landscape.

By partnering with a Global EOR, recruitment agencies can provide their clients access to a wealth of compliance expertise. Global EORs deeply understand local labour regulations, including hiring practices, employment contracts, working hours, and termination procedures. They stay up-to-date with the latest changes in labour laws, ensuring that recruitment activities remain compliant in each jurisdiction.

In addition to labour laws, Global EORs also possess comprehensive knowledge of tax regulations and reporting obligations. They understand the intricacies of payroll processing, tax deductions, and compliance with local tax authorities. By handling these responsibilities, Global EORs reduce the burden on recruitment agencies and ensure that their clients remain compliant in their global operations.

Global EORs are well-versed in immigration processes, including work permit requirements and visa procedures. They can provide guidance on securing the necessary documentation for international candidates, ensuring a smooth and compliant immigration process for end employers.

Recruitment agencies can rely on Global EORs to support their clients in meeting their compliance obligations while focusing on delivering exceptional recruitment services.

Global Employment Risk Mitigation

International employment carries inherent risks and liabilities. By engaging a Global EOR, recruitment agencies can offload legal and financial responsibilities associated with employing candidates in foreign jurisdictions. Global EORs act as the legal employer for their clients’ workforce, assuming liabilities related to employment contracts, compliance with local labour, tax, and immigration laws, and ongoing risk management. This partnership helps protect recruitment agencies and their clients from potential legal disputes, lawsuits, and financial liabilities, providing peace of mind and reducing the burden of global employment risk management.

Leveraging Global EORs Expertise for Compelling Employer Value Propositions

By partnering with Global Employer of Record (Global EOR) services, recruitment agencies can tap into the international practices and local knowledge of employee benefits provided to enhance their candidate offerings and stand out in the talent market.

Recruitment agencies can leverage the expertise of Global EORs to navigate the complexities of implementing remote work policies across multiple jurisdictions. By understanding local regulations, tax implications, and best practices, recruitment agencies can design and promote attractive remote work options that align with their clients’ needs and the preferences of exceptional candidates.

Employee benefits are another crucial aspect of a compelling employer value proposition. Candidates today place significant importance on the benefits offered by prospective employers. Global EORs can provide valuable guidance to recruitment agencies on different countries’ statutory and voluntary employee benefits. By incorporating this knowledge into their candidate offerings, recruitment agencies can ensure compliance with local laws while providing comprehensive and attractive benefits packages that enhance their clients’ employer value propositions.

The partnership between recruitment agencies and Global EORs enables the seamless integration of international employment practices and local employee benefits knowledge, resulting in compelling value propositions that meet exceptional candidates’ evolving needs and expectations.

Concluding Thoughts

The collaboration between global recruitment service providers and Global Employer of Record (Global EOR) services offers numerous benefits in the global talent market. By partnering with Global EORs, recruitment agencies streamline hiring processes, ensure compliance, and focus on core recruitment activities. This collaboration accelerates market entry, taps into global talent pools, and expands clients’ global footprint. Additionally, Global EORs mitigate global employment risks and provide expertise in compliance obligations. The augmentation of recruitment service providers by Global EORs empowers them to optimise operations, attract top talent, and achieve successful outcomes for clients.

Welcome to the April 2023 edition of our Global Employment Tax and Compliance Newsletter! We bring you the latest updates and insights on employment tax and compliance regulations worldwide in this issue. Our expert team has been closely monitoring the regulatory landscape to provide you with the most relevant and up-to-date information.

This edition will cover important developments in several countries, including Spain, Poland, China, Singapore, Belgium, Latvia, and the Netherlands.

We will discuss changes to tax rates, social security contributions, and other labour law and compliance requirements that employers must be aware of. Additionally, we will provide guidance on best practices for managing global payroll, ensuring compliance with data protection regulations, and mitigating risks associated with remote work arrangements.

As the employment tax and compliance world evolves rapidly, we understand employers’ challenges in keeping up with these changes. That is why we are committed to providing accurate and actionable information to help you navigate these complex issues confidently.

Thank you for choosing our Global Employment Tax and Compliance Newsletter as your source of information on employment tax and compliance. We hope you find this edition informative and valuable.

🇧🇪 Belgium 

Regarding the Right to Disconnect, measures have been introduced in Belgium to promote a healthy work-life balance for employees outside of regular working hours. Employers with a staff of 20 or more individuals are required to develop a policy that outlines the practicalities of implementing the Right to Disconnect, guidelines on the use of digital tools, and education and sensitization actions for employees and managers on the proper usage of digital tools and the potential risks of over-connectivity. This policy must be introduced through a collective labor agreement or, in the absence of such an agreement, through work regulations. The collective labor agreement must be filed with the FPS Employment registry. At the same time, a copy of the work regulations that includes the modalities and implementation must be submitted to the social inspectorate.

🇵🇱 Poland

The Polish parliament has recently passed a bill that modifies the Labor Code, allowing employers to conduct non-invasive testing for the presence of alcohol or intoxicating substances in employees and civil law contractors. The main purpose of these checks is to ensure the safety and well-being of employees and other individuals or to protect property.

The President must sign the Act before it takes effect, and it will become effective 14 days after its publication. The expected impact date is Spring 2023.

Employers in Poland interested in using alcohol or substance-use checks should first determine whether it is necessary to protect the safety and well-being of their employees and others or to protect property. If they decide to conduct these checks, they should establish relevant policies and procedures to ensure that the checks are conducted in a non-invasive manner.

🇵🇱 Poland

The Polish parliament has approved amendments to the Act on Aid to Citizens of Ukraine in connection with the armed conflict on the territory of Ukraine, which provide additional support for Ukrainians and their spouses in obtaining work and residence permits. The changes include:

Extending temporary residence permits until August 24, 2023, if the last day of stay in Poland under the previous provisions of the Act falls between February 24, 2022, and the same date in 2023.

Creating an easier path for Ukrainian citizens to obtain temporary residence permits, even if they don’t meet the typical criteria for this type of permit.

Defining “diia.pl” as an electronic document allowing the Polish border crossing.

The Bill also abolishes almost all special immigration anti-COVID regulations for foreigners of all nationalities, such as extending the deadline for submitting temporary residence applications and the validity of temporary residence permits and cards that expired during the epidemic or state of epidemic emergency up to 30 days after the end of the state of emergency.

The expected impact date for most provisions is Spring, except for the anti-COVID immigration regulations that will come into force on August 24, 2023.

Employers should monitor any new regulations regarding the employment of foreign workers to prepare for potential changes in the work permit process and requirements for verifying the right to stay in Poland.

Employers must ensure their foreign employees have legal residence status to work in Poland. Fines for illegal employment range from PLN 500 (approx. €106.15) to PLN 30,000 (approx. €6,369) per case.

🇸🇬 Singapore

The Ministry of Manpower is set to implement a new evaluative framework called the Complementarity Assessment Framework (COMPASS) for Employment Pass (EP) applicants. The aim is to allow employers to select highly qualified foreign professionals while promoting workforce diversity. COMPASS is a points-based system that evaluates individual and employment-related attributes in EP applications. To qualify for an EP, applicants must meet the increased qualifying salary of S$5,000 per month (S$5,500 per month for employers in the financial services sector) and score at least 40 points under COMPASS.

The impact date for the new framework is September 1, 2023, for new EP applications and September 1, 2024, for renewals. Employers should take note of this new framework and prepare for future EP applications and renewals accordingly.

🇦🇪 UAE

The Abu Dhabi General Market (ADGM) in UAE has recently released guiding principles on whistleblowing, signaling a growing emphasis on transparency and accountability in the region. These principles provide a framework for employees to safely and securely report any wrongdoing, misconduct, or illegal activities within an organization without fear of retaliation.

This move by ADGM is a positive step towards promoting a culture of ethical behavior and corporate social responsibility. The region’s employers should note these guidelines and consider incorporating them into their policies and procedures.

In particular, companies in regulated sectors such as finance, healthcare, and energy should proactively review their existing whistleblowing policies to ensure they align with ADGM’s principles. Employers should also monitor developments in the regulation of whistleblowing and speaking out policies, as it is possible that there may be additional requirements in the future.

Failing to have a robust whistleblowing policy in place could expose employers to significant legal and reputational risks. Organizations must take whistleblowing seriously and create an environment where employees feel comfortable reporting any potential wrongdoing. By doing so, employers can demonstrate their commitment to good governance and protect their reputation as responsible corporate citizens.

🇩🇰 Denmark

The legislation was implemented in Denmark to comply with the EU Directive on transparent and predictable working conditions for employees, which makes several changes, including adjusting the concept of an employee, expanding the scope of covered employees, changing the timescale for providing written information to the employee, listing more working conditions that must be disclosed as a minimum, and setting new minimum requirements for several working conditions.

The impact date for these changes is 1 July 2023, and while employers require no specific action, they should be aware of the changes and ensure compliance.

The penalty for non-compliance is expected to be compensated at a rate reflecting current case law. The compensation in the Danish draft Bill corresponds to the compensation in the current Danish Contracts Act, with a maximum of 13 weeks’ salary and up to 20 weeks’ salary in cases of aggravating circumstances. If the breach is excusable and has been of no specific importance in all other respects, the compensation cannot exceed DKK 1,000. The range of compensation amounts in current case law is typically between DKK 5,000 and DKK 10,000, so employers should comply with the new requirements to avoid potential penalties.

🇱🇻  Latvia

Latvia has amended the Law “On Maternity and Sickness Insurance” to implement the EU Directive on work-life balance for parents and carers. The amendments introduce new provisions, including a minimum two-month parental benefit period for each child’s parent, which cannot be transferred to the other parent. 

Parents also have the right to choose the total period for receiving parental benefits for a child’s care, with two options available: 19 months, of which 15 months can be used until the child reaches one and a half years of age, and the non-transferable part can be used by each parent until the child reaches the age of eight, or 13 months, of which nine months can be used until the child reaches one year of age, and each parent can use the non-transferable part until the child reaches the age of eight. Furthermore, if one parent receives maternity benefit, the period of parental benefit (19 or 13 months) will include the period of maternity benefit payment.

For recipients of parental benefits who are employed or self-employed and not on childcare leave, the benefit will be paid at 50% of the parental benefit payable to those on childcare leave, an increase from the current rate of 30%.

These changes are effective from January 1, 2023. Employers must review and update their internal parental benefits policies to ensure compliance with the new requirements.

🇮🇪 Ireland

Effective December 16, 2022, new Regulations have been implemented to transpose the EU Directive on Transparent and Predictable Working Conditions in Ireland. The 2022 Regulations include requirements for more predictable working time, reasonable advance notice for employees with variable schedules, limitations on the duration of probationary periods, and rights for employees to work with other employers outside their schedule. Additionally, on-demand employment contracts will have limited use and duration, written notification of employment terms will be provided within specified timeframes, employees with 26 weeks of service can request a transition to more secure employment, and mandatory training will be offered without cost.

Employers must ensure compliance with the new Regulations, update template contracts accordingly, and be aware of the new employment terms and training requirements. Failure to comply with the provisions of the 2022 Regulations may result in employees filing complaints with the Workplace Relations Commission.

🇨🇳 China

The Revised Law on Protection of Women’s Rights and Interests in the People’s Republic of China imposes new obligations on employers to safeguard female employees’ legal rights and interests. These include measures to prevent sexual harassment, such as formulating internal rules and policies, designating staff responsible for anti-sexual harassment, providing training and education, establishing complaint channels, and handling disputes confidentially. Employers are also prohibited from engaging in discriminatory behaviors during recruitment, such as restricting job positions or setting employment conditions based on gender, marital/childbirth status, or pregnancy testing.

🇪🇸 Spain

The Budget Law sets out the contribution bases and rates for social security, unemployment, termination of activity protection, the Wage Guarantee Fund, and professional training. While there are no changes to contribution rates under the general social security system from those applicable in 2022, the cap on the contribution base for 2023 has increased to €4,495.50 per month. The law also regulates the new intergenerational fairness mechanism, which requires an additional 0.6% contribution (0.5% payable by the employer and 0.1% by the worker) to the contribution base for certain contingencies, including retirement plan coverage.

Employers must take note of the new contribution bases and rates for 2023 and ensure they apply them correctly. Reviewing the contribution base limit to ensure compliance with the new cap is important. Employers should also consider how the new intergenerational fairness mechanism will affect their social security contributions and factor this into their financial planning.

🇪🇸 Spain

The Spanish government has recently announced changes to its expatriate tax regime, commonly called the “Beckham” tax regime. The regime provides for a 24% income tax rate for qualifying expatriate employees with an annual income of up to €600,000. The latest changes are intended to incentivize more expatriates to work in Spain and now apply to individuals with contracts that permit them to work remotely in Spain.

In addition to the remote work provision, the new changes reduce the number of years an individual is required to have been a non-Spanish resident before the assignment from 10 to 5 years. This means that expatriates who have been living in Spain for less than five years can now benefit from the favorable tax regime.

Furthermore, in certain circumstances, spouses and children of expatriate employees can now also benefit from the “Beckham” tax regime. These changes will likely make Spain a more attractive destination for expatriate employees and their families, which could positively impact the country’s economy.

🇳🇱 Netherlands

The Netherlands has recently changed the “30%-scheme,” which provides certain foreign employees with a tax-free allowance of 30% of their income. However, starting from January 1, 2023, employees applying for this scheme will only be able to receive the tax-free allowance on income up to €216,000. This means that income earned beyond this amount will not be eligible for the tax-free allowance.

Additionally, employees already part of the “30%-scheme” before January 1, 2023, will experience a phased reduction in the tax-free allowance. Employers must review their compensation and benefits packages for foreign employees and ensure they comply with these new regulations.

Experience Hassle-free Global Payroll Management with our Global Payroll Calculator

Managing global payroll can be challenging, especially when it comes to calculating employment tax across multiple regions. Many organizations struggle to keep up with the constantly changing tax regulations, leading to non-compliance risks and costly mistakes. With our Global Payroll Calculator, you can eliminate uncertainty and simplify your payroll calculations.

Our Global Payroll Calculator provides comprehensive support to help you overcome the most significant global payroll challenges, including lack of up-to-date employment tax intelligence, reducing the cost of hire, avoiding non-compliance risks, and navigating the complexities of different employment taxes across various jurisdictions.

Don’t let payroll compliance risks slow you down. Try our Global Payroll Calculator today.

Sample Employment Tax Calculation

It’s time for the March 2023 Edition of our Global Employment Tax and Compliance Newsletter! Let’s dive in!

The Global Employer of Record is a cost-effective and risk-free talent engagement model in the world of human resources and payroll management. But what does it mean, why is it important, and what are the benefits? We’ll look at all these questions in this week’s newsletter.

A Global Employer of Record is an entity that acts as a legal employer for all local and international employees worldwide — even if they work remotely and/or in multiple countries. The company provides a single point of contact and responsibility for all payroll, benefits, tax administration, and HR functions across multiple jurisdictions.

Using a Global Employer of Record

Global Employer of Record (EOR) solutions provide a quick, simple, and cost-effective way to tap into global talent pools for companies hiring talent outside their target country. 

These businesses have an existing local legal entity in your target countries. This simplifies the global expansion process immensely, as your organisation can rely on the Global EOR provider’s employment expertise and infrastructure.  

It allows them to streamline onboarding and manage payrolls, tax, and benefits for their clients’ employees. The global EOR is not responsible for overseeing job duties or employee performance; these tasks are left to international employers. 

Normally the Global Employer of Record arrangement is only needed for limited periods, generally no more than two years. However, some countries may see it used for extended time frames depending on individual circumstances.

Utilizing a Global EOR solution can be a great HR-team augmentation solution for organizations expanding into new countries – especially those risky or underserved ones. 

By employing local and foreign talent through the Global EOR’s legal entity, the organization is unburdened from managing payroll and benefits and navigating the maze of labor and tax law compliance. All of those responsibilities land on the global EOR provider, which would list itself as the legal employer, handling all compensation, benefits, or immigration matters that come along with it. Such services can not merely provide invaluable knowledge regarding worldwide hiring practices and guidance when making decisions around employee compensation structure.

Get Express Quote

Global Employer of Record: All Services Under One Roof in 190 Countries

In today’s business world, a company can’t reach its full potential if it doesn’t expand into international markets. The biggest challenge is ensuring you have a local employer of record partner in each country you do business in. It’s hard because there are so many things to consider—different tax laws, varying degrees of government involvement in payroll and tax administration, and more—and they can vary from country to country. 

You need a partner who knows their way around all those quirks, which can be tricky to find. Even if you find someone, it’s still a lot of work to handle the nuances of multiple countries and ensure that each of your in-country employees is treated fairly and compliantly.

What’s more challenging than finding the right partner? Managing all those relationships with multiple partners across different HR functions, operating in different time zones, and having varying levels of expertise with organizational challenges. 

When you think you’ve got it all figured out, there’s some other complication that throws everything off-kilter, like a new tax law or labour regulation, or currency exchange rate.

Why Use Global Employer of Record Services?

It’s a new cost-effective, compliant way of managing payroll, benefits administration, legal matters, and so much more—all from one place. You’ll have access to the entire suite of services that your company needs to stay compliant with a single contract and payment structure. Best of all? It’s all wrapped up in one neat package. That means no more paying for multiple vendors for each service you need. Just one monthly fee, and you’re done!

As a result, companies with global operations can reduce their costs by eliminating multiple vendors, streamlining their reporting and compliance processes, reducing risk exposure by centralizing their HR functions into one entity that understands local regulations better than any other company could, and increasing efficiency by hiring staff who understand how to hire across borders. Acumen International can replace at least 10 local vendors as follows.

1. Payroll Company
2. Employee Benefits Broker
3. HR Consultants
4. Background Checks Vendors
5. IP Attorney
6. Tax Advisor
7. Translation service
8. Legal Advisor
9. Immigration Advisor
10. HR Compliance Advisor

Global Expansion Risk Control 

Your business expanding into new countries and continents can put you at higher risk for costly mistakes and problems. 

Let’s face it. Your company could be in trouble when it comes to taxes and adherence to ever-changing compliance requirements. With so many regulations, some are bound to trip you up. And who has the time to stay on top of it all? It’s easy to fall into an under-taxation trap or get caught misclassifying employees as independent contractors (which can result in huge fines in many countries), and you might not even know there’s a problem until it’s too late.

A Global Employer of Record (EOR) helps with compliance issues that could arise from entering new markets. By working with Global EOR, you can ensure your company follows each jurisdiction’s in-country rules and regulations, helping avoid the following risks.

1. Permanent establishment risk ​
2. Employee misclassification risk​
3. Under-taxation risk​
4. HR compliance risk​
5. Immigration compliance risk​
6. Intellectual property rights risk
7. Vendor management & vetting risk​.

Get Express Quote

Global Employer of Record Support upon Business Transitioning

As a company, how you will succeed in the global economy is a direct result of your ability to attract and retain top talent. Global expansion via mergers, acquisitions, new ventures, and joint ventures has become the preferred growth strategy for many organizations, but business success does not always translate into business continuity. 

While you may be planning for your business to grow and expand into new markets, it doesn’t always happen according to plan. Sometimes the business changes in a way that makes it necessary to close locations or sell off assets, while other times it makes sense to acquire another company. In all of these cases, you’ll have to transfer your employees between companies—a complicated and sometimes intimidating process that can take many months and cause significant challenges for both the employees affected and the business as a whole. 

As with most change initiatives, the Global Employer of Record partner’s expertise and engagement are key factors in the success of any business transition. Acumen Global EOR’s employee transition management services support the entire process and help minimize these potential risks in 190 countries.

Our comprehensive business transitioning solutions include:

• A market testing vehicle without local incorporation
• HR-arm upon global expansion urgent needs​
• Business in transition – M&As, close-downs​, lay-offs, consolidations, other business combinations, and business restructuring events
• Expert global employment capabilities in remote, risky, or underserved markets​.

Our clients include Fortune 500 companies and small and medium-sized businesses across all industries, including IT, finance, technology-enabled services, manufacturing, retail, distribution, and logistics. The service offerings are designed to help organizations navigate through these transitions without disrupting business operations or negatively impacting employees.

Why Wait? Get Express Quote Today!

Global Employer of Record (EOR) is a flexible, scalable, and adaptable talent engagement model that can support you throughout your global expansion journey. It doesn’t matter if you’re starting from scratch or are looking to expand your business in an already established market. Our Global EOR services can help you at any stage of your international growth. 

You’ll find that Acumen International’s approach is uniquely suited to meet the needs of companies entering new markets and those seeking to enter new customer channels, as well as for companies experiencing rapid growth or needing workforce flexibility.

Get Express Quote

Global Employment: Payroll Challenges & Employer Obligations

Operating a business in foreign markets comes with unique human resources challenges, unlike anything you may have encountered in your domestic markets. Factors such as national health care, work visas, work permits, compliant employment contracts, and risks of unfair dismissal claims can vary significantly from country to country. Having a sound understanding of these issues is critical to successfully expanding your business into new markets.

When expanding your business into overseas markets, you’ll need to consider your talent engagement strategy carefully.  Depending on international and local regulations, you may use local hires, ex-pats, independent contractors, full- and part-time employees, or a mix for your business. Different countries have different employment practices, so research what would work best for your company. Remember that your home country’s practices may not apply in other countries. 

Challenge 1: Overseas Employment Contracts

Maintaining accurate employee documentation is critical, as the lack of it could result in unwittingly getting slapped with penalties and fees. When drafting employee contracts, it is crucial to seek legal advice to ensure that they comply with host-country labor laws. In many countries, an employment contract must be written in a language other than English. While a cost may be associated with having a translation, the contract written in the host country’s language will take precedence.

Challenge 2: Employee Misclassification Risk

As an employer, knowing the employment laws and regulations of the country you are doing business is crucial. This is especially true when classifying workers as independent contractors or employees. Independent contractors may seem like a cost-effective solution for businesses. Still, companies should be aware that local authorities in many countries may deem them de facto benefits-eligible employees. Misclassifying a worker can result in significant fines and damage your company’s reputation. This can result in significant fines and reputational damage, so it’s important to ensure you are clear on the legal distinctions between contractors and employees before hiring anyone and budget for full-time employees under host-country laws to avoid those penalties.

Challenge 3: Tax Protection Policies for Global Workforce

The costs of sending employees on overseas assignments can quickly add up, often totaling two to three times the employee’s salary in their home country. Many businesses establish tax protection policies to alleviate personal tax burdens and attract and retain top international talent. These policies can be complex and costly to manage. 

Challenge 4: Budgeting Immigration Cost

International business travel can be an excellent opportunity for employees to broaden their horizons and gain new skills. However, it can also be a logistical nightmare for employers.

Cross-border employee relocation can be a costly and time-consuming process. Planning and budgeting for immigration, relocation expenses, and allowances are essential to ensuring a smooth transition for all involved.

Challenge 5: Budgeting Termination Cost

As an employer operating globally, you must know the laws and regulations regarding employee rights in different countries. Depending on the country, there may be different rules regarding termination of employment, severance pay, and collective bargaining agreements In some Western European countries, for instance, terminating an employee can cost up to 12 to 18 months of severance. Global employers must plan for this possibility when budgeting for international talent acquisition.

Challenge 6: Budgeting Employee Payroll and Statutory Benefits

As more and more companies expand their operations overseas, they are often surprised to learn that the costs of employee benefits can be much higher in foreign countries than at home. Different countries have different laws regulating payroll, extending beyond the typical health insurance contributions, statutory withholdings, and other benefits that can take a big bite out of a company’s bottom line when operating in a new country.

How do you ensure your payroll across multiple jurisdictions is on track? There are many expenses and costs involved in a payroll process. You must understand the costs and whether they align with your company’s objectives.

In some cases, local labor, tax, and social security laws may also come into play.  This can be a significant burden for companies operating in multiple countries. 

It also means you can predict your costs and plan ahead for them. A good budget allows you to make informed decisions, identify both risk and opportunity, and react to it appropriately. That’s invaluable in the business world.

But the key point is that a good budget is one that accurately reflects your business environment and conditions. And, importantly, payroll is no different. It’s important, therefore, that you understand how to calculate payroll globally – not just in terms of how much you need to pay employees but also in terms of how to structure your payroll costs accurately.

There are numerous hidden costs in your global payroll – some of which are unavoidable and some of which are avoidable but can lead to problems down the track. For example, there’s the cost of remitting money to overseas employees. There’s tax withholding — and by this, we mean not only the cost of withholding tax but also other costs like the administrative burden on you as an employer or the possibility that local law makes it compulsory (in some places) for employers to withhold certain taxes from employee salaries. Then there’s the cost of handling foreign currency conversions.

In your role as an employer, you might be responsible for various statuary payments, including maternity pay, shared parental pay, paternity pay, adoption pay, and sick pay. When estimating a budget allowance for this purpose, it can be hard to predict these costs accurately.

Challenge 7: Budgeting Taxable Voluntary Benefits 

As an overseas employer, you may be required to offer additional compensation in salary increases, profit sharing, holiday payments, bonuses, car allowances, and more. These voluntary benefits can significantly impact your employment contracts, compensation structure, and payroll operations.  

Depending on the country where you operate, these benefits may be taxed under different schemes than regular salary. Therefore, reviewing and understanding these benefits is essential to ensure compliance with local and international laws and regulations. For employers, it’s often a matter of getting the budget right: how much can you afford to pay for each of these perks?

This is where the global payroll budget comes in. It takes into account every single employee, every payroll period, and every benefit. You should be able to get a rough estimate of the figures involved without too much effort—but it’s worth getting advice from a payroll advisor or a Global Employer of Record if you need a more detailed breakdown.

Challenge 8: Budgeting Paid Time Off 

In today’s economy, being mindful of your company’s payroll budget is more important than ever. Unexpected costs can add up, such as employee vacation and overtime pay. In many countries, employees are entitled to several vacation days and paid time off each year.  When you factor in public holidays, paid time off in some countries in Western Europe can come to nearly two months per year for each employee, plus additional time off for overtime worked. Sick leave benefits can also be a considerable cost for employers operating in multiple jurisdictions. In other countries, for example, employees can collect 70 percent of their salary for up to 105 weeks of sick leave.

Payroll Budgeting Solution: Global Payroll Calculator 

How is your global talent compensation policy competitive, and how much will it cost? Global Payroll Calculator (GPC) is a SaaS tool that can help you do this. 

15 Benefits That Will Save You Time And Money in 2023

1. Automate and speed up global payroll budgeting routine processes.
2. Streamline data collection.
3. Gain valuable insights into the global talent market.
4. Make informed decisions about talent acquisition.
5. Get the complete picture of the latest tax benchmarks, labor market, and compliance. 
6. Plan effective global mobility programs.
7. Explore and benchmark pay practices in the global marketplace.
8. Gain guidance on what to pay your top talent and hire top-performing employees while maintaining a diverse workforce.
9. Simplify & streamline payroll planning.
10. Attract and retain talent in a competitive marketplace.
11. Know the exact costs to recruit, develop and retain top talent.
12. Gain greater visibility into and better understand global employment tax and compliance intelligence.
13. Make data-driven decisions about compensation programs, sourcing strategies, and other talent acquisition.
14. Develop a strong and cost-effective talent strategy 
15. Conduct service provider quote benchmark analysis. Combat global employment overspending. 

Global Payroll Calculator provides a more intelligent way of global talent acquisition and compensation. With detailed data on employer and employee taxes and contributions in 190 countries, Global Payroll Calculator gives users a complete picture of total employment costs. With high accuracy, no hidden costs, and 100% compliance around the world guaranteed, the GPC tool enables users to make intelligent, fast, and informed decisions about locating their businesses or acquiring talent.

So whether you are an employer with a foreign, local, or hybrid workforce that spans multiple countries, an Employer of Record, PEO, or an agency (service provider) assisting with international staffing and recruitment, you can use the Global Payroll Calculator to get accurate worldwide payroll budgeting data and cross-country comparisons in 190 countries. The Payroll Calculator is a valuable resource to get the job done right.

Global Payroll Calculator by Acumen International has been named the Payroll Innovation Award winner for 2022 by the Global Payroll Association. Don’t let the uncertainties of international tax compliance and exposure to foreign labor laws sidetrack your global expansion plans.

Businesses need to stay on top of global employment and tax regulations. Maintaining a current understanding of global regulations is critical for HR and compliance professionals.

The Global Employment Tax and Compliance Intelligence Newsletter is a comprehensive solution that helps businesses comply with global regulations and offers expert analysis of changing legislation in 190 countries.

At Acumen International, we make regulatory and legislative changes easy to understand so you can stay on top of changes that may impact your business. Address legal questions on employment and tax topics efficiently and accurately to ensure you confidently surface the information you need and your business proactively anticipates and understands how regulations impact your organization.

Subscribe today to stay current on the latest global employment legal and compliance information and discover how to proactively benefit from regulatory changes and insight.

1. Mongolia 🇲🇳

Effective 1 January 2023, progressive rates of personal income tax are introduced that apply to employment income:

– 10% on annual income up to MNT120,000,000

– 15% on annual income above MNT120,000,000 and up to MNT180,000,000

– 20% on annual income above MNT180,000,000

Effective 1 January 2023, the national minimum wage is increased from MNT420,000 to MNT550,000.

The maximum monthly base (payroll cap) for calculating the employee social security contributions is increased from MKT4,200,000 to MNT5,500,000. As a result, the employee social security contributions are capped at MNT 632,500 per month for 2023.

2. Luxembourg 🇱🇺

Effective 1 February 2023, a new wage indexation applies. Wages and pensions must be raised by 2.5%. The next wage indexation is scheduled for 1 April 2023.

3. France 🇫🇷

For 2023, the personal income tax thresholds are increased as follows:

– exempt from PIT annual income up to EUR10,777

– 11% on annual income above EUR10,777 and up to EUR27,478

– 30% on annual income above EUR27,478 and up to EUR78,570

– 41% on annual income above EUR78,570 and up to EUR168,994

– 45% on annual income above EUR168,994

The maximum amount for a standard deduction of 10% of employment income is increased to EUR13,522

Effective 1 January 2023, the monthly social security ceiling is increased from EUR3,428 to EUR3,666 for Bracket A, and from EUR27,424 to EUR29,328 for Bracket B.

The maximum monthly base (payroll cap) for calculating the employer unemployment insurance contribution is increased from EUR13,712 to EUR14,664.

4. Germany 🇩🇪

For 2023, the personal income tax thresholds are changed as follows:

– exempt from PIT annual income up to EUR10,909

– 14% – 24% (geometrically progressive rates) on annual income above EUR10,909 and up to EUR16,000

– 24% – 42% (geometrically progressive rates) on annual income above EUR16,000 and up to EUR62,809

– 42% on annual income above EUR62,809 and up to EUR277,825

– 45% on annual income above EUR277,825

Effective 1 January 2023, the maximum annual base for calculating the pension and unemployment insurance contributions is increased to EUR85,200 (East) and EUR87,600 (West) for the health and long-term insurance contributions – to EUR59,850.

The standard deduction for employment-related expenses is increased from EUR1,000 to EUR1,230 annually.

The deduction for pension expenses is increased from 94% to 100% of the pension insurance contributions, up to a limit of EUR25,639.

5. Poland 🇵🇱

Effective 1 January 2023, the maximum annual base for calculating the retirement and disability insurance contributions is increased from PLN177,660 to PLN208,050.

6. Singapore 🇸🇬

Commencing 1 January 2024, a significant announcement was made in Singapore – Government-funded paternity leave will be extended from two weeks to four with a voluntary extension of an extra two weeks.

To provide increased assistance to lower- and middle-income working mothers, revisions have been made to the Working Mother’s Child Relief program. Accordingly, eligible individuals may receive further support through this revised initiative.

1. First child:

• From 14 February to 31 December 2023: 15% of the mother’s earned income
• From 1 January: S$8,000

2. Second child:

• From 14 February to 31 December 2023: 20% of the mother’s earned income
• From 1 January: S$10,000

3. Third child:

• From 14 February to 31 December 2023: 25% of the mother’s earned income
• From 1 January: S$12,000

As part of the updated parental leave regulations, parents can access 12 days of unpaid leave per year to care for their infants. This is an increase from the previous six-day allowance.

Business Immigration: News & Compliance

1. Israel 🇮🇱

In a move to modernize its business immigration system, the Israeli government has recently introduced digital work visas for certain categories of employees. Those eligible may obtain B-1 Expert, B-1 Hi-Tech, SEA 90-day, and STEP 90-day visas online when entering the country. Dependents, however, must still adhere to traditional means with a physical B-2 visitor visa stamp on their passports. Despite this transformation, no alterations were made to the overall application process.

2. United Kingdom 🇬🇧

As the UK’s immigration landscape continues to change, many small businesses are taking a closer look at the potential benefits sponsorship offers in 2023. A Home Office sponsor license is now required for companies that wish to recruit non-EU employees through the Skilled Worker visa route. Obtaining sponsor license status grants employers unrestricted access to a vast pool of international talent from around the globe.

When it comes to addressing skills shortages in the future, a survey conducted by the Federation of Small Businesses of the UK has revealed that twice as many small businesses are now turning to sponsorship. Some consider this path undesirable due to its potentially high costs and complex process for gaining and maintaining a sponsor license – yet these employers are taking this route nonetheless.

Regardless of size or industry, any organization can apply for a sponsor license provided all the Home Office’s eligibility requirements are met. Qualifying businesses must have 

1. an established UK base with a fixed address, the capacity to offer jobs that meet Home Office skill and salary criteria; 
2. Availability of systems in place to monitor any sponsored immigrants and personnel who manage sponsorship;
3. no criminal convictions involving immigration offenses or other transgressions like fraudulence or money laundering.

Sponsor Licence Application Procedure

The requirements for obtaining a sponsorship license include completing an online application form, submitting supporting corporate documents, demonstrating that the company has adequate HR practices to fulfill its licensee duties, appointing personnel who will manage the process, and paying fees. All of these steps comprise the application process for a license.

New Startup Law in Spain to Facilitate Talent Acquisition

The Spanish Congress of Deputies approved new legislation called the Law for the Promotion of the Startup Ecosystem, or Startup Law. During one of their plenary sessions, this law was passed on December 1, 2022.

According to the Spanish Tech Ecosystem Report, the value of the Spanish Startup Ecosystem was 46 mln Euros in 2021.

The new Startup Law in Spain is an ambitious attempt by the government to address the unique challenges that startups encounter when raising capital and recruiting high-skilled workers.

The Startup Law seeks to create a favorable regulatory environment for Spanish startups to foster innovation, create jobs, and spur economic growth. It includes provisions to reduce bureaucracy, offer tax incentives to investors, and make it easier for firms to access financing and global talent.

Objectives of the Startup Law in Spain 

• Encourage launching or relocating startups in Spain.
• Facilitate administrative procedures. 
• Attract and retain specialized talent to startup companies through more favorable tax considerations for stock options.
• Promote the rapprochement between vocational training institutions, universities, and emerging companies. 
• Support the development poles or centers of attraction for companies and investors in peripheral cities and rural areas. 
• Promote innovative public procurement with emerging companies. 
• Bridge the gender gap in the startup ecosystem.

Requirements for Creating a Startup in Spain

According to new legislation, certain criteria must be met to be classified as a startup. 

1. Businesses must have been established no more than five or seven years ago in the biotechnology, energy, and industrial production sectors.
2.  Businesses should have their operations base and most of their staff based in Spain. 
3. Startups cannot issue dividends nor be listed on any stock market. 
4. Their annual turnover must not exceed 5 million euros.

New Work Visa for Remote Talent in Spain

A new visa program has been created to enable foreign nationals to take up residence in Spain while working for a company based elsewhere. Independence professionals can perform part of their work for Spanish businesses, with no more than 20% of their time devoted to such activity. This is not open to regular employees, however.

Qualification Criteria for New Spanish Visa Program

1. The applicant should have a degree from a prominent university, business school, or professional training program; alternatively, they should demonstrate three years of professional experience. 
2. The employer abroad must have been registered as a business entity for more than one year
3. Full-time employees must prove that they worked at the company for at least three months before application submission. 
4. Applicants must prove that the foreign employer allows them to work remotely. For independent contractors, it is required that they demonstrate an existing business relationship with one or more companies outside the country, which stretches back over at least three months before applying. 
5. Finally, applicants should prove financial self-sufficiency by having an income double the national minimum wage plus any additional revenue required for family members associated with them.

About Acumen International Employer of Record

Acumen International is a Global Employer of Record that offers a unique Employ to Expand hybrid talent management solution designed to give businesses the tools and services they need to hire, onboard, payroll, and reward employees worldwide — all with a single partner across 190 countries. 

With an innovative and flexible Tiered Pricing Model, Acumen International can help its clients hire a local and foreign workforce with minimal cost, risk, and time while ensuring 100% employment and tax compliance. 

Global Payroll Calculator by Acumen International is a payroll tax and compliance intelligence tool that supports multinational employers and HR professionals in accurate forecasting their total global employment costs and liabilities.

If you need support with any aspect of global employment or business immigration, Acumen International Employer of Record is here to help.

Get Express Quote

The global marketplace is becoming increasingly competitive and interconnected. As a result, the importance of businesses meeting the complex compliance requirements in their HR operations has never been higher. 

News about Global Employment Tax and Compliance is often difficult to find because of the language barriers, time zones, and cross-border legislation complexity. Acumen International solves this problem by researching and publishing regular updates in English from our experts worldwide.

This newsletter is intended for global employers and global employment service providers. We hope it will be a helpful resource for companies doing business globally and navigating the complex web of employment taxes and labour laws worldwide.

Navigate the Complex Web of Global Employment Tax and Labour Laws

Our Global Employment Tax and Compliance Newsletter is a bi-weekly publication that keeps you updated and helps track the most significant changes in the legislation and regulations around Global Employment Tax and Compliance in 190 countries. 

This Newsletter provides comprehensive information on employment taxes—such as payroll taxes, social security contributions, statutory severance payments, unemployment contributions, etc.—and their associated regulatory developments. 

We will also provide tips on complying with the increasing number of immigration and labour law requirements you must deal with when relocating your employees or hiring new employees overseas. We hope this will help you avoid potential legal issues.

Global Employment Tax and Compliance Insights

The Global Employment Tax and Compliance Newsletter by Acumen International covers global employment tax, labour, and immigration compliance from various angles.

Latest Global Employment Tax and Compliance Updates in 15 Countries

The first issue features changes in the 15 countries’ legislation and regulations around Global Employment Tax and Compliance. We have compiled a comprehensive overview of recent alterations to the employment and labour laws that international employers must be aware of. Here is a summary of these key changes to help determine the required action.

1. Malta 🇲🇹

Effective 1 January 2023, the Government of Malta has increased the maximum amounts of social security and maternity fund contributions as follows:

• The maximum amount of social security contributions is increased from EUR37.24 to EUR39.28 for individuals born up to 31 December 1961 and from EUR49.97 to EUR51.60 for individuals born from 1 January 1962 onwards, per week per employee.
• The maximum amount of maternity fund contributions is increased from EUR1.12 to EUR1.18 for individuals born up to 31 December 1961 and from EUR1.50 to EUR1.55 for individuals born from 1 January 1962 onwards, per week per employee.

2. Singapore 🇸🇬

Effective 1 January 2023, Central Provident Fund (CPF) contribution rates are increased in Singapore.

For employees’ portion:

• 20% for employees up to 55 years of age
• 15% for employees 55-60 years of age (previously 14%)
• 9.5% for employees 60-65 years of age (previously 8.5%)
• 7% for employees 65-70 years of age (previously 6%)
• 5% for employees above 70 years of age

For employers’ portion:

• 17% for employees up to 55 years of age
• 14.5% for employees 55-60 years of age (previously 14%)
• 11% for employees 60-65 years of age (previously 10%)
• 8.5% for employees 65-70 years of age (previously 8%)
• 7.5% for employees above 70 years of age

3. Serbia 🇷🇸

Effective 1 January 2023, the Serbian Government has announced the following changes:

• The maximum monthly base for calculating social security contributions is increased from RSD441,140 to RSD500,360.
• The rate for pension and disability insurance on behalf of the employer is decreased from 11% to 10%.
• The non-taxable amount for salary tax calculation is increased from RSD19,300 to RSD21,712.

4. South Korea 🇰🇷

Effective 1 January 2023, the South Korean Government has introduced the following changes:

• The national health insurance contribution rate is increased from 6.99% to 7.09%.
• The long-term care insurance contribution rate increases from 0.8577% to 0.9082%.
• The exemption limit for meal allowance is increased from KRW100,000 to KRW200,000 per month.

 5. Philippines 🇵🇭

Effective 1 January 2023, the rate for social security insurance for the employee is increased from 4% to 4.5%, on behalf of the employer – from 8% to 9%. The minimum monthly base for calculating social security contributions is PHP4,000; the maximum monthly base is PHP30,000.

Effective 1 January 2023, PIT rates are changed as follows:

–           exempt from PIT annual income up to PHP 250,000

–           15% on annual income above PHP 250,000 and up to PHP 400,000

–           20% on annual income above PHP 400,000 and up to PHP 800,000

–           25% on annual income above PHP 800,000 and up to PHP 2,000,000

–           30% on annual income above PHP 2,000,000 and up to PHP 8,000,000

–           35% on annual income above the threshold of PHP 8,000,000.

6. Turkey 🇹🇷

Effective 1 January 2023, the following amendments are introduced:

Tax brackets for PIT are increased:

–           15% on annual income up to TRY70,000

–           20% on annual income above TRY70,000 and up to TRY150,000

–           27% on annual income above TRY150,000 and up to TRY550,000

–           35% on annual income above TRY550,000 and up to TRY1,900,000

–           40% on annual income above the threshold TRY1,900,000

The minimum monthly base for calculating social security contributions is increased to TRY10,008.00; the maximum monthly base is increased to TRY75,060.00.

7. Estonia 🇪🇪

Effective 1 January 2023, the Estonian Government has announced the following changes:

• The basic tax exemption is increased from EUR500 to EUR654 per month, from EUR6,000 to EUR7,848 per year.
• The minimum amount of public pension and public health insurance contributions payable by the employer is increased from EUR192.72 to EUR215.82 per month.

8. Côte D’Ivoire 🇨🇮

Effective 1 January 2023, the maximum monthly base for calculating pension contributions is increased from XOF2,700,000 to XOF3,375,000, and for calculating family allowance and industrial accident insurance contributions – from XOF70,000 to XOF75,000.

9. Ghana 🇬🇭

Effective 1 January 2023, the rates of income tax and tax brackets for resident individuals have been revised as follows:

– exempt from tax annual income up to GHS4,824

– 5% on annual income above GHS4,824 and up to GHS6,144

– 10% on annual income above GHS6,144 and up to GHS7,704

– 17.5% on annual income above GHS7,704 and up to GHS43,704

– 25% on annual income above GHS43,704 and up to GHS240,444

– 30% on annual income above GHS240,444 and up to GHS6,000,00

– 35% on annual income above GHS6,000,00

Effective 1 January 2023, the minimum monthly base for calculating contributions to the Social Security and National Insurance Trust (SSNIT) is increased from GHS365.33 to GHS401.76, the maximum monthly base – from GHS35,000.00 to GHS42,000.00.

10. Kazakhstan 🇰🇿

Effective 1 January 2023, the following changes are implemented:

– The standard personal allowance is increased from KZT42,882 to KZT48,300 per month (14 times of monthly calculation index of KZT3,450).

– The maximum monthly base for calculating pension fund contributions is increased from KZT3,000,000 to KZT3,500,000 (50 times of monthly minimum wage of KZT70,000).

– The maximum monthly base for calculating health insurance contributions is increased from KZT600,000 to KZT700,000 (10 times of monthly minimum wage of KZT70,000).

– The maximum monthly base for calculating social insurance contributions is increased from KZT420,000 to KZT490,000 (7 times of monthly minimum wage of KZT70,000).

11. Armenia 🇦🇲

Effective 1 January 2023, the following changes are adopted:

The personal income tax rate is reduced from 21% to 20%.

The maximum monthly base (payroll cap) for calculating pension contribution is increased from AMD1,020,000 to AMD1,125,000 (15 times of minimum monthly salary of AMD75,000).

The rates and brackets for the pension contributions are revised as follows:

– 5% of monthly employment income up to AMD500,000

– 10% of monthly employment income (minus AMD25,000) if monthly employment income is above AMD500,000 and up to AMD1,125,000 

12. Trinidad & Tobago 🇹🇹

Effective 1 January 2023, a personal allowance is increased from TTD84,000 to TTD90,000.

13. Austria 🇦🇹

Effective 1 January 2023, personal income tax rates are amended as follows:

– exempt from PIT annual income up to EUR11,000

– 20% on annual income above EUR 11,000 and up to EUR 18,000

– 30% on annual income above EUR 18,000 and up to EUR 31,000

– 41% on annual income above EUR 31,000 and up to EUR 60,000

– 48% on annual income above EUR 60,000 and up to EUR 90,000

– 50% on annual income above EUR 90,000 and up to EUR 1,000,000

– 55% on annual income above EUR 1,000,000

The maximum monthly base (payroll cap) for calculating social security contributions is increased from EUR 5,670 to EUR 5,850.

14. Luxembourg 🇱🇺

Effective 1 January 2023, VAT rates are reduced as follows:

– standard rate – from 17% to 16%

– reduced rates – from 14% to 13%, and from 8% to 7%

Effective 1 January 2023, the minimum monthly base for calculating social security contributions is increased from EUR 2,313.38 to EUR 2,387.40, and the maximum monthly base – is from EUR 11,566.88 to EUR 11,936.98.

15. Egypt 🇪🇬

Effective 1 January 2023, the minimum monthly base for calculating social security contributions is increased from EGP1,400 to EGP1,700, and the maximum monthly base is from EGP 9,400 to EGP 10,900.

Harness Payroll and Tax Compliance with Global Payroll Calculator

Operating in multiple jurisdictions, you need guidance on global tax and labour law compliance. You must understand how different regions’ employment taxes impact your company and its global employees.

Most organizations with a global footprint struggle to calculate employment tax because they fear uncertainty and may need access to up-to-date intelligence.

Global Payroll Calculator by Acumen International revolutionizes how businesses leverage global payroll information by streamlining global payroll and tax calculations for 190 countries. 

That’s where we come in with the Global Payroll Calculator. Acumen International is an innovative technology company that has created solutions that help businesses like yours navigate the complexities of calculating employment taxes while optimizing their hire cost and avoiding the costs and risks associated with not doing so.

We’ve automated routine processes so that you can speed up data collection, gain valuable insights into the global talent market, make informed decisions about talent acquisition, get the complete picture of the latest tax and employment cost benchmarks, labor law compliance requirements in 190 countries —and much more!

With the Global Payroll Calculator by Acumen International on your side, you’ll be able to:

• plan global mobility programs;
• explore pay practices in the global marketplace;
• gain guidance on what to pay your top talent while maintaining a diverse workforce;
• simplify & streamline payroll planning;
• achieve 100% payroll and tax compliance
• attract and retain talent in a competitive marketplace.

Every Aspect of Employment Tax and Compliance Covered by Global Payroll Calculator

1. Save Time

Make cross-jurisdictional employer and employee tax research a breeze. Get instant access to trusted commentary and guidance from leading employment tax and compliance experts.

2. Save Money

Navigate the complexities of multi-location employment tax regulations. Reduce the costs associated with outsourcing to third-party local employment tax and compliance advisors.

3. Avoid Risk

Avoid costly HR and tax compliance mistakes by providing accurate and up-to-date tax notes.

4. Budget Payroll

Find out the details you require to budget compliant and accurate payroll: employer’s social security, mandatory benefits, insurance funds, and payroll tax obligations.

5. Expand Confidently

Determine the best country for expansion based on the most favourable tax and social security requirements.

6. Benchmark Vendor Quotes

Conduct service provider quote benchmark analysis. Combat global employment overspending — data validation at your fingertips.

7. Retain Talent

Get up-to-date insights into mandatory benefits in 190 countries.  Build a complete picture to develop an effective employee retention strategy.

8. Get Talent Intelligence

Build a strong talent acquisition strategy. Compare talent pools. Calculate and compare foreign and local employee taxes to understand the best place to hire talent. Make informed global hiring decisions.

Acumen’s Global Payroll Calculator Gives You an Edge — No Matter Where You Are

The Global Payroll Calculator by Acumen is a SaaS solution for instant, and accurate cost of employment estimates that offers:

• total employment costs estimation (detailed employer & employee taxes and contributions);
• locals and expats’ cost of hire estimates in all international currencies;
• coverage of 190 countries and cross-country comparison;
• time & cost savings due to instant automated estimates and unified data in one place vs. multiple providers.

About Acumen International Employer of Record

Acumen International is a Global Employer of Record that offers a unique Employ to Expand hybrid talent management solution designed to give businesses the tools and services they need to hire, onboard, payroll, and reward employees worldwide — all with a single partner across 190 countries. 

With an innovative and flexible Tiered Pricing Model, Acumen International can help its clients hire a local and foreign workforce with minimal cost, risk, and time while ensuring 100% employment and tax compliance. 

Global Payroll Calculator by Acumen International is a payroll tax and compliance intelligence tool that supports multinational employers and HR professionals in accurate forecasting their total global employment costs and liabilities.

Get Express Quote

Global employment today is a puzzle. Some pieces are missing, some are swapped around, and some are even upside down or inside out. Whether you are a multinational corporation, an international non-profit, or just a business that operates in more than one country, you have probably had the experience of running into some of the same challenges with global employment.

When hiring a staff to work overseas, some challenges come far beyond the nuts and bolts of finding and vetting candidates. Companies often overlook these challenges when they think only of locally-hired employees, which can have extreme consequences for businesses that employ a workforce internationally.

The employment laws, compliance regulations, legal requirements, and tax implications can be complicated. The laws vary widely by country, making it challenging to structure payroll and employee benefit plans around international operations.

Why is this? Because if you are not careful, you might find yourself unwittingly breaking one employment law regulation or another in your new country. This could lead to fines, other legal issues, and harmful public exposure for your brand. It is not just about being bad for your business, though; it is also about being bad for the people who work in your company.

A global Employer of Record helps solve the global employment puzzle. That’s why companies turn to a global EOR that has experience operating in many countries and can provide expert advice on compliance issues.

1. Local Incorporation Cost and Risk

Different businesses have different strategies for entering and exiting countries. However, ad-hoc strategies are more likely to lead to miscommunication and problems. Businesses must have a fully implemented strategy before entering or exiting countries. By doing more planning and preparation, the process will be more straightforward.

3 Options for Multi-location International Employment

Businesses establishing a global presence face the challenge of managing and scaling an employee base with no common borders or language. To successfully expand abroad, companies have several options for enabling hiring in international markets. 

There are six key things to consider when choosing an employment method for your company’s global expansion:

1. Budget and time frame
2. Tax implications
3. Compliance
4. Employment liability
5. IP protection
6. Asset acquisition.

3 Most Common ways of Local Entity Establishment

1. Overseas Permanent Establishment (a representative office, a branch, a subsidiary, and other foreign legal entity types )
2. Selecting independent contractors to handle tasks remotely.
3. Work with a global EOR (Employer of Record) and GEO (Global Professional Employer Organisation) Partner. 

You’re expanding your business into new territories with many new challenges. You’re revising your business models to better suit overseas markets, setting up foreign entities to make local hires, and dealing with the tax implications.

Incorporation and payroll registration at the local level are essential. However, the associated costs and time investment required for skilled accounting and legal support can be prohibitive. A Global Employer of Record is the solution that helps you skip the costly and time-consuming tasks of local incorporation and registration. A global EOR ensures compliance without sacrificing flexibility or control of your foreign workforce.

Engaging the services of a global EOR (employer of Record) lets you offload compliance-related concerns and skip the hassle of incorporation.

Skip the paperwork, and skip the hassle. Stop worrying about complex tax rules and legal issues your business faces. Let us help you enter foreign markets with just one payment and a single contract.

Get Express Quote

2. Employment Taxes

The world is becoming increasingly connected, with people and businesses moving across borders to take advantage of opportunities. However, employment and tax legislation have not kept up with this trend, making it difficult for companies to stay compliant.

Employment taxes can be a significant burden for businesses, especially those that hire internationally.

There are many different types of taxes that businesses have to pay, but employment taxes are one of the most important and ever-evolving. These taxes can vary significantly from country to country and can be a large portion of a monthly salary. Not only are the rates different in each country and state, but the tax filing methods can be highly complicated. So it can be challenging to figure out how much you need to withhold from your employees and how much you owe in taxes.

The problem with international employment taxes is they are often much more complicated than domestic ones and can vary even within one country. For example, there are different laws in the US depending on where you live and if you work for the federal government or a private company. In other countries, the applicable taxes may depend on which industry you work for.

3. In-country Employee Registration

Managing payroll in different countries can be a complex and challenging task. Employees may need to be registered and taxed differently in each country, and other laws must be followed. This can make it very hard to keep track of everything and ensure everything is done correctly. However, it is critical to ensure that employees are appropriately registered with the local authorities before they start work. Failing to do so can result in penalties for both the employee and the employer.

4. Payroll Calculations: Country-specific Requirements

In many countries, payroll calculations vary significantly. For example, employees in some countries may receive a 13th and 14th-month salary halfway through the year or at Christmas as standard. Thus, it’s essential to be aware of the payroll practices in your country of employment.

Understanding how payroll calculations work in your new country is important to avoid surprises. Some countries have different rules when it comes to employment contracts. In some cases, you may be responsible for paying your employees for the entire employment contract duration even if they are not performing as expected or you want to end their employment early. This can be a financial shock to foreign employers who are not used to this practice.

For this reason, it is vital to ensure that you review and understand the terms of the employee’s contract before hiring them so you know what to expect.

 However, by addressing some key challenges and partnering with a Global PEO, organizations can ensure compliant, accurate, and timely payments.

Get Express Quote

5. End of Financial Year Reporting

The financial year for many countries ends in March, and companies with a presence in more than one country need to produce financial reports for each country and send them to the relevant government bodies. With the end of the financial year approaching, accountants are busy preparing reports, some of which can be complex and difficult to navigate as they may be on foreign websites with little or no English language support. You must get these reports lodged on time, as it could result in late payment penalties.

Many of these reports need to be completed in the local language, so it is recommended that you use an accountant specializing in the country you are based in to ensure compliance before lodgement deadlines.

If your company plans to do business in multiple countries, clearly understanding each jurisdiction’s employment and tax laws is essential. Compliance with these laws can be complex and time-consuming, so many businesses outsource payroll management and other HR functions to a global Professional Employer Organisation (PEO). A reputable Global PEO will have experts on staff who are familiar with the specific requirements in each country where you plan to operate.

6. Local Employment Contracts Compliance

As an employer, you need to have local employment contracts that comply with the law of the jurisdiction where your employees work. These contracts should be provided in both English and the local language. Do not simply copy and paste your existing contract template from your home country – this could result in non-compliance and serious legal consequences.

When recruiting employees for your business, it is critical to ensure their employment contract is appropriate for the country where they will be working. A UK employment contract may not be valid in the United States because they are both English-speaking countries. 

The language of the employment contract is a crucial detail to keep in mind during the recruitment process, as non-compliance to target country employment laws or any mistakes with the paperwork could cost you money, time, and potentially your business.

Get Express Quote

7. Compliant Employment Contract Termination

The employment termination process can be just as necessary as the hiring process. This part of employment should not be taken lightly as it can have many implications and consequences, both for the employer and the employee. Therefore, it is essential to consider all aspects of the situation before deciding.

The start of termination process begins when the employee signs the employment contract. If the termination guidelines are clear and precise from the outset, then terminating an employee will be much smoother.

When setting out the terms of employment, you must be clear about the notice period (making sure it’s compliant with the country-specific regulations) and what is expected in terms of returning company equipment, knowledge transfer, and a credit card or cash float balance. Non-compete clauses protecting your intellectual property are also important considerations. Doing so will help avoid misunderstandings and potential legal problems down the road.

If an employer does not have clear procedures for the termination of their employment contract, they may face litigation. Employees who feel mistreated may become disgruntled and legally contest the termination. This can be costly and challenging, especially if the dispute is in another country with a different time zone and language.

Employ to Expand: How to Put Together a Hard Puzzle with Acumen International Employer of Record

Many things can go wrong when you try to find employment overseas. Acumen International can help you navigate these challenges. Still, it is essential to know the potential obstacles you may face because if candidates are unhappy at any stage, the whole arrangement can fail.

As a Global Employer of Record, Acumen International enables organizations to quickly and compliantly hire employees in any country. We take care of all the employment-related details so our clients can focus on their business goals.

When deciding to move abroad for work, your selected candidates consider several factors. The visa and work permit process complexities, currency fluctuations, lifestyle choices, and family considerations can all impact their final decision.

As a global PEO and EOR, we understand that you must put your employees first when expanding your business globally. Considering this move’s impact on their lives, it is crucial to think outside the box and ensure they are comfortable and supported at every step.

It has become critical for organizations to understand applicable laws and regulations concerning issues such as minimum wages and benefits, employment standards, immigration, and labor relations in each location. A Global PEO and EOR can play an essential role in helping organizations navigate this complex global employment landscape by offering reliable and country-specific solutions and expert advice on compliance-related matters.

Global Employer of Record Services by Acumen International

• Global payroll management;
• Compliance with local tax rules (file & deposit) of the country where the EOR company is located;
• Handling compliant employment contracts: 
• Background, education, and other checks; 
• Compliant onboarding and termination processes, as well as employee compensation;
• Arranging visas and work permits for employees;
• Ensuring the working process is organized under local labor laws;
• Processing workers’ insurance and other benefits (day-offs, bonuses, and more);
• Global employment process maps, employment guides, and other documentation.

A Comprehensive Global Employment Solution & a Single Point of Contact

Managing the employment side of your business can be a full-time job in and of itself. There are many options to consider when it comes to finding help, from payroll companies and tax and immigration advisors to employee benefits brokers to human resource consultants.

One alternative to working with numerous vendors is partnering with a Global Employer of Record. A Global EOR can manage all aspects of your business HR resources, from benefits and payroll to unemployment management and safety training. This can free up your time to focus on running your business.

A global Employer of Record can provide a full suite of services to help you replace the following multiple vendors.

• Payroll Company
• Employee Benefits Broker
• HR Consultants
• Background Checks Vendors
• IP Attorney
• Tax Advisor
• Translation service
• Legal Advisor
• Immigration Advisor
• HR Compliance Advisor.

Global Payroll Calculator: Instant and Accurate Global Employment Cost Estimation

When hiring employees and contractors across the globe, you may not choose the most cost-effective and business-friendly country.

• Do you know which country is the most cost-effective place to hire employees? 
• What are the costs of entity establishment and legal representation?
• What are the payroll costs and management fees?
• What are your ongoing annual tax compliance costs?
• Are you fully aware of banking implications?
• Did you know that labor laws and hidden costs could make your company less efficient when choosing a country to run your business? 
• Did you know that there could be a more cost-effective country to hire employees in and save up to 50%?

If you are a business with a global footprint, you probably need help to keep up with the intricacies and uncertainties of managing a globally distributed hybrid workforce. This is because countries have different labor laws, compliance, and tax regulations. You need guidance on tax and compliance. You must understand how foreign employment taxes impact your company and its global employees. Most organizations with a worldwide footprint struggle to calculate employment tax because they fear uncertainty and may need access to up-to-date intelligence.

What if, instead of limiting your company’s international expansion by cutting through the jungle of local regulatory compliance, tax, labor, and immigration requirements, you could have all the information of 190 countries at your fingertips?

Global Payroll Calculator: Tax and Compliance Intelligence at Your Fingertips

That’s where we come in. Acumen International is an innovative global employment solutions provider that has created solutions that help businesses like yours navigate the complexities of calculating employment taxes while optimizing their hire cost and avoiding the costs and risks associated with not doing so.

Acumen International offers the Global Payroll Calculator to help businesses understand the tax rates and compliance requirements for hiring a local and foreign workforce. Acumen’s expert team tracks developments in 190 countries around the globe. It provides up-to-date data on local regulations related to tax, payroll regulations, benefits, hiring practices, compliance requirements, and other labor-related factors that impact an employer’s bottom line. This valuable information makes the Global Payroll Calculator an invaluable tool for businesses looking to expand internationally.

Global Payroll Calculator: A Wealth of Capabilities for Payroll 2023 Budgeting

We have automated routine processes so that you can speed up data collection, gain valuable insights into the global talent market, make informed decisions about talent acquisition, get the complete picture of the latest tax benchmarks, labor market trends, compliance trends—and much more!

With us, you will be able to plan global mobility programs; explore pay practices in the global marketplace; gain guidance on what to pay your top talent while maintaining a diverse workforce; simplify & streamline payroll planning, and attract and retain talent in a competitive marketplace.

Global Payroll Calculator helps companies reduce labor costs by providing up-to-date information on hiring, compensation, and tax requirements. It is also an ideal tool for quickly locating employees in any country.

Get Express Quote

Global EOR (Employer of Record) Services: Save Up to 75% of New Market Expansion Cost

Acumen International Employ to Expand Program is the perfect opportunity for you if you are trying to reach new markets, expand your workforce, and grow your business.

Want to reach emerging markets? Hire a high-performing team focused on productivity and profitability. We make hiring, onboarding, and payrolling your hybrid workforce easy. You get the support you need to manage, reward, and your global workforce with one accountable Global Employer of Record partner across 190 countries. 

Our Tiered Pricing Model provides flexible options for international growth with lightweight investment.

Our Global Payroll Calculator automates employer and employee tax calculations worldwide.

The indisputable advantages of partnering with Acumen Global Employer of Record are demonstrated below:

	Average Cost & Time	Our Solution *
Time to Market	10+ weeks	72 hours
Legal Advisors Fees	$ 10 000 +	………….
Official Employment & Benefits	$ 20 000 +	………….
Incorporation & Liquidation Costs	$ 11 000 +	………….
Bank Account Setup	$ 2 000 +	………….
Maintenance costs, in-house staff to manage the foreign entity, payroll, taxes, and benefits administration.	$ 25 000+	………….
The approximate total cost of new market entry**	$ 74 000 +	$ 15 000

* Per one Employee
** Costs vary from country to country

Acumen Global Employer of Record can help you solve the complex puzzle of global employment. As a Global EOR partner, we help businesses meet all their HR needs while handling compliance issues in the international arena. By offering comprehensive global employment solutions and reality checks about the compliance aspects of employing staff across the globe, we can be an essential resource for your in-house HR and Management teams.

Contact us to discuss your quick and compliant global employment journey.

Get Express Quote