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 scrutinised 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 labour 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.