For most businesses, their key asset is their staff. This makes the proper management of their recruitment, contractual issues, payroll calculations, payments and Human Resource policy implementation a time consuming and complex exercise.
Below are of some of the steps which need to be considered, and how we can help you best tackle them and ensure your workforce are satisfied and your business on track.
Registering as a local employer
Many countries still require new businesses to formally register themselves with the local authorities and tax office as an employer. This step is often linked to the establishment of a new corporate entity. This can quickly become a heavy bureaucratic exercise as it is important to understand the various diverse official offices that require notification of plans to hire personnel, with differing administrative requirements. This is where TMF Group can help, especially if you are looking at launching in several countries at the same time. We can take care of all the paperwork, and ensure all the necessary bodies are informed, and that the road ahead is clear to start hiring.
Obtaining special authorisations for expatriate staff
If you are looking at hiring or brining in your own foreign, expatriate employees, there will often be a requirement for special authorisations. These include work visas and residency permits. Many countries have recently tightened up their requirements in these areas, particularly for work permits, to protect their own indigenous workforce from cheap imported labour. This means a full understanding of the exact obligations and procedures is vital – otherwise companies face having their salaried staff not being able to work or refused entry into the country. Our role is to eliminate many of the delays and distractions of the various applications, and ensure your foreign expatriate staff are in post as soon as possible and business is underway.
Recruitment of local employees
As well as expat staff, you may wish to hire local personnel. Again, this can represent a distraction for your plans, especially for some of the administrative and back office posts. TMF Group can assist in this area, working with local partner recruitment firms or handling the selection process ourselves in our own core accounting or HR and payroll specialisms. We will ensure that you secure the best commercial terms from employment agencies, and only pay fair market rates for any staff. We will can also co-ordinate hiring across several countries simultaneously so that you can be assured that business in on track in all your jurisdictions.
Establish your local Human Resource function and policies
Ensuring your staff are properly managed and supported is vital for the success of your day-to-day business. It is also important that your company’s own internal HR policies are properly implemented and are helping the business to thrive. Our in-country specialists, who understand the local requirements and restrictions on HR policies, can work with your international HR function to ensure polices, terms, bonus schemes etc. are fully applied in staff contracts and employee handbooks. This can include full local language translations, if beneficial or if a local statutory obligation. TMF Group can also manage the on-going HR function if economical for you, or help recruit a local HR resource.
Payroll tax compliance for expatriate employees
Engaging expat staff can bring some complex payroll issues and calculations. Foreign staff often have different tax rules and computations in addition to those of your local staff. TMF Group’s HR teams across the world have a full understanding of the rules in most countries, and will ensure that the payroll deductions and calculations for expats are correctly processed. We can also help with your expats’ personal tax returns and filings, which helps reassures them that their own local obligations are properly taken care of.
Selection and implementation of payroll software
There is often a plethora of local payroll software packages available in each country, reflecting the local complexities of salary calculations and deductions. In a number of countries, foreign businesses are obliged to select from only two or three officially approved solutions. Understanding the differences in these alternatives, and appreciating which option is the best for your business is where we can add real value. TMF Group can provide a guide to the different offerings, and make an appropriate recommendation for your needs. If necessary, we can also offer our own industry software packages, which are fully compliant for local standards, and can be quickly set-up for you.
Managing payroll calculations and payment processing
Probably the most time consuming and sensitive issue when employing foreign staff is the management of their salaries. Both the local tax authorities and your own staff will expect complete accuracy the calculations and payments, as well as complete record keeping. At the core of this process is the full recording of employment terms and tax bases for the computations. Once the calculations have been completed, and thoroughly reviewed, all employees will expect weekly/monthly payslips. These should tie into summary payment calculations and bank payment instructions. TMF Group is expert at managing this whole process from start to finish. Our offices around the world are well versed in the efficient and fully compliant weekly or monthly payment runs. As an independent check on the system, we can also eliminate the risks of phantom staff payments or unauthorised changes to staff payments.
Dealing with the local payroll tax authorities
Aside from registering employees at the outset of the establishment of the business, companies need to support a regular stream of HR correspondence with the local tax office. This includes a constant dialogue with the tax authorities on changes in staff, and keeping up-to-date with the regular updates on processes, deductions or payments. There will also be official payroll payment filings to be made – weekly or monthly, depending on the frequency of salary runs. The rules and constant re-interpretations can become a real distraction for foreign businesses trying to establish themselves and grow. TMF Group is the expert in this area. We deal regularly with the payroll authorities, and so can ensure that they are kept fully updated of the relevant facts surrounding your businesses, and therefore minimise the numbers of distracting enquiries or tax audits.
If you would like to hear more about the requirements for employing and managing an international workforce, or perhaps wish to learn about the obligations in a specific country, then we would be delighted to hear from you. You would be happy to provide a free consultation on the requirements you will face in any major territory around the world.
At TMF Group we have assisted thousands of companies successfully expand and operate seamlessly across borders. We look forward to helping you too.