Guide to Hiring Internationally: Methods
There is not a one-size-fits-all approach to hiring overseas. Your business is unique. You have different needs than your competitors, and you have different needs dependent upon which country you choose.
As for your methods to hiring internationally, options include:
- Establishing a Foreign Subsidiary.
- This option is the largest commitment to global hiring. It’s the formation of a legal entity in your new country, and your parent company controls the ownership of more than 50% of the voting stock. Your parent company is typically the US-based headquarters. Typically, a foreign subsidiary costs around $20K USD to set up has significant maintenance fees and takes about four months to set up. It’s also difficult to tear down and get out of the country if your business fails to succeed. Not all firms need to do this, so work with an expert to determine if this option is necessary.
- Working with independent contractors.
- Another risky option, working with foreign independent contractors may work for your business if you aren’t ready to commit to a full employee. If you move forward with contractors, work with an in-country expert to establish an agreement. It should fit the needs of your new country, cover IP protection and clearly state autonomy. Just know, there are risks involved with contractors, which are laid out in this post.
- Outsourcing individuals business processes.
- International Business Process Outsourcing (BPO) is ideal for companies that want to outsource tasks like customer service and do not mind giving up control. BPO is a third-party provider that manages business processes completely. It helps you focus on strategy, but as mentioned, you will not have direct control of that outsourced process.
- Employer of record services keep your company compliant.
- EOR services such as International Professional Employer Organization (PEO) and Foreign Subsidiary as a Service (FSaaS) are third-party companies that manage your international employees in your new country on your behalf. Benefits include management of all of payroll, entitlements, withholdings, and taxes. Your company is responsible for day-to-day management of responsibilities and employee liabilities, and the EOR keeps you compliant. Plus, you’ll have a legal entity without establishing a burdensome subsidiary.
Guide to Hiring Internationally: Attracting Talent
Now that you know the logistics of how to hire, you need to develop a plan on how to attract talent. You will find that it’s competitive in many international markets. As more and more businesses start to expand overseas, whether for opportunity or lower corporate tax rates, the global talent pool becomes smaller and smaller.