Engaging workers abroad raises questions of entity, employment law, tax and
immigration that must be resolved before the first hire.
Structures. A local entity employing directly; an employer of record engaging
on the company’s behalf; an independent contractor arrangement; or secondment
from an existing entity.
Permanent establishment. Employees abroad can create a taxable presence for
the company, with corporate tax filing and payment obligations. Sales activity
and contract-concluding authority are the usual triggers.
Misclassification. Contractor arrangements are scrutinized more strictly in
many jurisdictions than domestically, with retroactive employment status,
back social contributions and penalties.
Employer of record. Practical for small headcounts, with the provider as
legal employer. Regulatory attitudes vary, and some jurisdictions restrict
labor leasing.
Local employment law. Mandatory terms that cannot be contracted out —
notice periods, severance entitlements, working time, collective agreements
applying by sector, and works council consultation. At-will employment does not
exist in most of the world.
Termination. Requires cause and process in most jurisdictions, with statutory
severance, and settlement agreements frequently requiring court or authority
approval to be effective.
Data protection obligations attaching to employee data from the first hire.
