A proven fact: most world trade happens because of multinational corporations. Shocking? Let’s break this down for you. In FY 2020, the 177 billion dollar IT industry saw techies getting hired left and right. This followed suit when smaller or big IT conglomerates started hiring ( as the work gets trickled down to these smaller companies). When Microsoft has sacked 10,000 of their employees, guess who will share the brunt of massive hiring? This points out that Multinationals make or break the world economy. So, to scale higher, your organization needs to charter in the unventured territory. EOR service providers are just the solution for all your legal and labour law problems.
Setting up and running an office in a foreign country are two different aspects. But guess what EOR service providers will be your strongest ally in achieving this mean feat. We deal with labour law, the local taxation framework and other regulatory compliance.
Do you want to do this alone? Without an EOR service provider? Sure, go ahead if you have nine months to spare for JUST setting up the Office and dealing with local taxation.
It would be best to employ an EOR service provider like MM Enterprise to accelerate this process. A simpler alternative that will ensure that work gets done.
In this guide, MM Enterprises is helping you decide and set up a guide and know-how of EOR services and EOR service providers.
But let’s get some history on EOR. Why it is necessary, how India can contribute to the changing landscape of jobs and how remote working is still going strong.
Why do EOR service providers hold significance with remote working?
Post Covid, the workplace has ceased to exist. Dramatic much? Maybe. But we know that the last few years have made way for a drastic shift in working conditions, and this has been nothing but good news for you.
Now you can go all out while hiring employees and open new employment possibilities. Like, you are going globally remote.
Studying the above statistics indicates that remote work is a hit. The normalization of remote working post-Covid and talent scarcity has created ample room for out-of-the-box ideas. While the opportunities are plenty, it comes with hurdles for employers.
EOR service providers pave the path of hiring employees across borders. Organizations like yours can tap into the remote/local talent pool when setting up the company across a foreign land without dealing with employee relocation, payroll taxation, and legal and administrative logistics.
Here are a few reasons why EOR services have piqued the interest of many.
But is this the whole story? By hiring an EOR service provider, companies can access remote employees. This is where this blog will help in your high hiring needs.
We will give you more information on why EOR will be the best possible decision. But again, let’s get this deeper. Why can foreign lands ( in our case, India)be a massive market for your organization?
Why is India the Golden Bird for Business Expansion in 2023?
India is a major superpower with steady GDP growth, and it has projected growth of 5.5% in 2023, the highest among G20 countries. Therefore, a lucrative option for Business Expansion.
Also, the government has constructed new business-friendly policies like Make In India. This is empowering business owners to create employment opportunities by promoting manufacturing. New data indicates that India is going several notches up in ranks when ease of doing business is concerned.
Moreover, India’s talent pool makes this country an attractive option for MNCs/ businesses to set up their operations.
But as always, setting up operations means staffing considerations, which come with labour laws and regulations that companies must comply with. Moreover, recruiting and retaining the right talent comes with its own set of challenges.
This needs curating a competitive compensation package and ensuring cultural fit and diversity in the workplace.
Advice on Staffing for Business Expansion
As we said earlier, India is THE market for setting up operations, but comes with critical challenges, I.e., staffing. To help you navigate unchartered territories regarding talent retention, here are our two cents:
PEO/ EOR services, a must:
Partnering with a professional employer can help you navigate the complex HR loopholes. The job description of PEO entails a good acquaintance with local labour laws and regulations. Additionally, provide valuable and expert guidance on HR-related matters, including employee benefits, taxation and compliance. They are here to help you handle all the paperwork administration and manage employee relations. While all you have to do is focus on growing numbers in revenue.
Social Media can be a Great Tool:
You seek employees, where half of the freshers reside, which is social media. Job seekers widely use LinkedIn, Facebook and Twitter. Use these media to promote the brand and the office culture it provides with complete job descriptions and engage with potential candidates.
Either Way, Hire Local HR professionals:
Locals know what works the best in company culture fit. They can help you with local labour laws, cultural appropriation and recruitment processes. Additionally, they can ensure compliance and maintain positive relationships with employees. Meanwhile, incorporating effective talent Retention strategies.
Employee Referrals:
Referrals work a great way when hiring local talent. With word of mouth, your company can get sizable employees who can get vetted by EOR service providers. Further, you can incentivize your employees to refer candidates and ensure fair recruitment.
Lastly, offer remote work options:
We have mentioned that remote work options have become increasingly popular, with more people prefer flexible work. Offering remote work increases employee satisfaction and retention. However, your remote work policies should comply with local labour laws and regulations.
Why go through various options? When are EOR service providers the best choice? Let’s know how it works and helps you scale your business.
EOR Service Providers- How do they work?
The employer of Record is the third-party organization, the legal employer of the company’s foreign employees. The EOR service providers undertake all the work avenues of management, such as hiring, payrolls, taxation, employee benefits and legal compliances.
Still, didn’t you get it?
You found a perfect match in one offshore employee. The talent is looking promising. But you can’t emplothemer.
Although you can’t employ them, the talent will work in your company with the help of EOR service providers. How does that work?
Through an Employer of Record service provider, you can engage global talent as if they are your employee. But legally, ly EOR is responsible for various thin, and from employment law, social security, and tax perspective, all the responsibility will be handled by EOR.
Lastly, EOR will be the legal employer who has to do all the paperwork while you reap the benefits of the talent. But at the end of the day, EOR is a service that comes at a price.
The charges are usually deducted as a percentage of the employee’s yearly salary or at a fixed monthly price, whichever is convenient for both parties.
The following next important question: Who do the employers work for?
EOR Service Providers enter into two contracts- the first is a service agreement with their client for giving them all employment services on foreign soil.
The second is an employment agreement with employees there. The. The company has duly signed that it will pay them a specifically agreed remuneration. At. At the same time, le EOR will handle all the employee perks and benefits.
Also, EOR service providers comply with all employment and labour laws. Every country has its own set of la, was, and it is exhausting to go through each. What is the next best thing? Hire EOR service providers.
Since it is well-versed in the country’s local regime, EOR undertakes compliance management. Additionally, it undertakes the process of negotiating and compensates the employees through its local bank account. EOR service promoters are responsible for the correct taxation framework,rk, per the company’s laws.
Furthermore, EOR has a better grasp of perks and benefits. As it has the exact geographical location and they know current remuneration standards. Therefore, it gives you access to the right resources,s such as the right recruiting partners, legal/financial consultants and even the workspace.
Why EOR service provider?
In fantasy land, hiring international employees entails interviews via video conferencing and wiring them their salaries via Payoneer or any international platform. In reality, this whole ordeal may cost you a lot of money on taxes and subsequent ban of your company even if attempted. Let’s get to know how!!
Huge Investment
Small and medium enterprises don’t dream of setting up a foreign business because of sizable investments. Setting up a working legal entity requires huge capital and time.
An EOR service provider negates the issues by solving each problem and charging a fee. Therefore, giving you access to a vast, vast global talent pool.
Complying Local and International Laws: headache
In today’s terms, organizations are willing to pay for information. This means our legal team is well versed with local laws and has years of experience in these years. They will strictly comply with the employers, whether it be taxation or foreign direct investment. The legal team has years of experience; they will only pave the way for better compliance.
Chop, Chop!! Time Is Of Essence
EOR can reduce the 9-month time gap to a mere week, and this happens due to the framework in place for each step of the process.
Registering a new entity and establishing a working framework can take months. Employing an EOR allows companies to begin their operations within weeks, as they already have a framework for each process step. Therefore, all the hiring, management benefits and payroll duties l can be outsourced. EOR service provider made all this work less cumbersome and more exciting for the employees and employer as it is highly efficient and cost-effective.
Things to Keep in Mind when Engaging with EOR service providers
EOR service providers have a massive role in the trajectory of the company’s expansion on foreign soil—all the morcriticalnt for businesses to take an informed decision when choosing one. The right EOR is the one that takes the company’s vision forward and recruits people accordingly. Further has the right resources to bring the necessary vision to fruition.
Here are some critical points while considering one:
Have some work Experience in the Desired country
This is why people are ready to shell out extra if the EOR service providers have proven experience in the particular country. Furthermore, when the provider has the requisite experience in employment legislation, tax regimes, and local operational guidelines. The work gets easier.
For example, Data privacy laws do not hold that much importance in South Asian countries. While Europe’s data protection law, GDPR, demands higher compliance when operations on European lands.
Therefore, if EOR is new to la, it will be of little assistance to its clients. Moreover, it’s imperative to cling to local laws or employs local EOR service providers.
Protection of your data and intellectual Property
One of the biggest challenges in new territories is stealing Intellectual Property rights and selling them to your competitor. Therefore, before choosing an E, OR must check their policies concerning data collection, protocols and mechanisms.
Data Privacy
Knowing which information will be processed and how it will be used for the company’s vision is essential; both the EOR and the client parties t should have an open talk on this topic. Secondly, there should be contracts on the same, and insisting on information security should not be taken lightly.
Intellectual Property should be protected.
A company’s trademark, logo, and Technology, which has been revolutionized,ry are precious assets and should be protected at all costs. Example: Everyone likes KFC chick, and only a few can replicate and master it. Why? Their recipe is not for everyone.
To weave the magic with revenues and popularity among global audiences, your Technology and assets will help immensely. Before zeroing in on an EOR service provider, you must check for a legal framework that helps against potential IPR breaches.
Secret Information
During operations, information about the company is in the hands of E, such as customer lists, pricing information & market strategy. The company has created a niche when armoured with these contacts and resources. Now it should be protected for obvious reasons. How?
First, there could be a series of NDAs or non Disclosure Agreements with the employees. Secondly, a robust security mechanism with firewalls and encryptions should be in place. This implies the software is rock sol, and copying or penetrating confidential information can be tricky.
Apart from the above reasons, if the EOR service providers are giving you results, you can experiment in a new market for companies who want to test the waters in foreign territories while remaining prudent in investment. Then, EOR service providers are good subsidiaries with minimal investment and provide the best talents without costing a bomb.
Still not convinced? How can EOR service providers make or break your business career?
Watch this video: https://www.youtube.com/watch?v=3plIsmHG7N4.
We now know the why of EOR. But don’t you think you have heard of this model somewhere else? Wasn’t it PEO?
Thsignificantor difference between PEO and EOR
When hiring remote talent, twstandardon models always pop up in your mind. Well, one model in which we are yanking about the second one is PEO, a professional employer organization( which we had mentioned at the start of the blog).
Even though they do the same job, it is labelled differently in the US. While in so, it is the same. Therefore it is essential to focus on the services rather than the label.
While both models offer the same service, es like complying with the local employment laws (social security and tax) when hiring globally remote, but and significant, in P, EO offers just local HR support like payroll and legal advice, and they seldom take responsibility for observing local employee compliance and engagement.
In that case, it is your responsibility to observe all employee-related obligations. Therefore, with E, OR, you don’t have to bother with employee compliance.
Now let’s come to the actual work.
What EOR service providers are offering in terms of solutions?
You want to hire employees globally without the necessity to observe employee obligations. Here is what an EOR service provider will do
- Curate an employment contract.
- Next, complete the employee onboarding process.
- There is a local Union for every professional. Register the talent with the Union.
- Enlist employee benefits and make the talent aware of them.
- Payroll processing.
- Take care of social security and taxation laws. In India, you can say PAN card is registered with EOR.
- Ensure that regional labour laws are adhered to.
An EOR service provider can speed up your international expansion while entering a new mark, and it can also act as a catalyst for widening your talent pool.
In Which scenarios can EOR service providers give benefits to Businesses?
Scenario 1: Expand to a new market without giving yourself unnecessary work.
This makes you aware of your market Proposition and helps you seal the market with your products. When you finally think of opening a branch.
Scenario 2: when an employee is relocating due to personal reasons.
You want to retain the talent when the talent is crossing geographical borders. It would be a ton of legal paperwork if you started complying with the said country’s tax laws. Better hire an EOR service provider.
Scenario 3: Luring Freelancers into Remote Team
Nowadays, freelancers are doing great jobs with their expertise. So it is a no-brainer to hire them in a remote team.
Scenario 4: bOfficeOffice goes remote
When you’re not so sure abouOfficeoffice, why not go remote first? It will enhance your employer brandinandas send off the message of flexible working hours.
Wouldn’t it be a dream to work in this super comforOfficeoffice?
Recently, the AirBnB CEO, Brian Chesky, said in an interview that more than 90% of the employees work remotely, ly and he doesn’t care when the dong they wo as long as the work is getting accomplished.
This articulates flexibility and company culture—an excellent way to start new operations in a new country.
One more Hurdle when Considering overseas operation: Permanent Establishment
The biggest challenge when you start working with an international workforce is creating a permanent establishment (PE).
It means that a business can be subject to corporate tax even when no subsidiary
office has been established or no legal entity. For a PE, all a ‘leased employee must does is be embroiled in tax-related activities.
Why is this relevant enough?
A lot of times, businesses are surprised when there is a creation of Tax footprints. When there have been no business withdrawals from either si, it has happened many times.
It happens when the ‘leased employee’ works on your behalf. And how is this connected to EOR service providers? When you are leasing out employees from nowhere without checking the background of the talent. This becomes a common problem.
The talent would do business on your behalf and start taxable work in your best interest. This includes sal; it could hamper your chances of creating an establishment even before thinking of one.
EOR Service Providers check the background and avoid creating a taxable presence. It ensures that legal entity and paperwork are in place before establishing permanent residency.
How To Stay Compliant When Working with an EOR service provider?
MM Enterprises believe in crossing borders when creating a more excellent workforce. The good news is that globally MNCs are changing the outlook of remote working. Don’t mind Elon Mu; hehe will come around. We are trying to state; companies are eager to break the notion of remote working. Nevertheless, remote hiring can be very tedious when there is urgent hiring as you have to manoeuvre a lot of labour laws.
Choosing from different EOR vendors can be truly exhausting and repetitive work. Why don’t we make this easy for you?
What is MM Enterprise Bringing to the Table?
We want to make an informed decision when you are picking the EOR which can be the right fit for the company. Hence, the subtle benefits will help you in onboarding the best talents.
We Bring Confidence Through Full Transparency
We have a complete upfront onboarding structure. No hidden cost, no suspiciously low pricing, and we pounce on you with elaborate bills when the company is under our wing.
Transparency goes a long way in establishing the trust you need before putting your business on foreign soil.
This also means no onboarding fees, benefit consultation fees, severance policy costs, or any other hidden costs you may have heard about. These detailed country guides and their taxation laws are also e embedded in our representative minds.
Have an open ta,lk, and the representative will gladly guide you on every process and how to establish a permanent office in the country.
First Mover’s Advantage
With MM Enterprise, the onboarding could be don-sleekly and efficiently. You don’t want the impression of your company to be a dud. In today’s creative world, first impressions are about professionally presenting yourself.
We agree even you can type a very descriptive job detail and outline every benefit. But outsource that work to us.
Top-Notch Employee Experience
When onboarding an employee for you, give the talent due onboard welcome. We arensuringat the employee is at ease and addressing the problems and concerns.
This helps improve your employer’s brand image and helps get more talent for your company.
Low-Touch, Ever-Evolving Software Platform
Our software is seamless and easy to use. All you have to do is set up ONCE. Now every Mon, then all you have to do is log in to the software and review the payroll assigned to the employee.
The ever-changing platform comes with flexible benefits. This explains you don’t have to do any work. Review it at a glance and give your affirmation on the benefits.
Get access to the software self-service portal with one click. When a client transfers its subsidiaries and local entity to a foreign land, we starsupportingto the local client’s subsidiary.
Simple and reliable.
Our team also gives other benefits. Such as
- Get assistance on business solutions and business expansion in India.
- We would be curating the appropriate job description and hiring the right talents.
- We will be the go-to person for the employees in HR matters. All work will be done according to your instructions and Indian labour legislation.
- We will assign a dedicated HR team to handle the total account and be responsible for the additional risks.
- MM Enterprises offers work and residence permits and takes the employee on our payroll process.
In addition to the above markers, we ensure the following protocols are in place.
EOR regulations:
ensure all the local laws and taxation processes a followed.
Employment terms and conditions:
as already stated abo, we will outline the terms and conditions which will comply with your company’s vision and local labor laws.
Premature Termination:
since we are familiar with termination and severance laws, we would advise you if the situation calls for it.
Risks:
will acquaint you with the risks you do f complied with the local laws and regulations. Also, guide you in the due process of mitigating the risk.
EOR Service providers give you the luxury of hiring across country borders. The provider enables you to build your dream team from scratch by undertaking end-to-end management and all HR responsibilities.
Further, it will give you the much-needed time to concentrate on business strategies. With ever-changing trends, you can rule social media with your ideas. Without moving an arm or l, e.g. a local entity is functional and operating. Thanks to the EOR service provider.
MM Enterprises Work Experience Concerning EOR service provider
We are helping companies build, manage and scale global teams in more than 15+ countries. Our client list includes Pepsico, Target, H&M, Ikea and more. Wpartnerip with AN and SR are global leaders in leading organizations to set up, build and run high-impact global Technology.
Our professionals are more than willing to he’ll you figure out the best mat that talent will help you mark your business foot on foreign soil. Sign up with us to take your business from local to global!!
Signing Off Upgrade, your companies, by partnering with the Right EOR service providers
Companies, can take undue advantage of hiring tale by registering and operating a local entity. With time, hiring can be very competitive and can be costly.
But with emerging talent hubs throughout the globe, EORs are becoming an essential resource for fir, with hassle-free onboarding and excellent work experience, and employees enjoying their work when there is a scope for growth and welcome onboard.
Want to expand into new locations with unfamiliar territories? Trust MM Enterprise to help you with all the paperwork simultaneously and let you do all the exciting work. Want to know the best PEO Service Providers in India?