International PEO

Almost every employer wants to hire talented people in foreign countries but are not sure how to go about paying them compliantly in their home country. But global expansion can be complicated. Some companies even have gone as far as identifying people they want to hire across borders, but stop short because they do not have an entity, a global EOR (employer of record) partner, or an international PEO in place.

What is an international or global PEO?

A global or international PEO (professional employer organization) is a third-party service that provides support for quickly and compliantly onboarding, paying, and managing the HR process for your international team. This co-employment model provides easier access to global labor markets across borders.

International PEOs are responsible for administering payroll, maintaining compliance in each country, and other aspects of global onboarding. As an employer-of-record, the company is still responsible for building and recruiting their global team, managing their employees, and other day-to-day operations of delivering productions and services.

What is the difference between an international PEO and an EOR (employer of record)?

The terms PEO and EOR are often used interchangeably, though there are some key differences between the approaches, depending on the country.

PEO

International companies that partner with a PEO enter into a co-employment relationship, which means they still need to maintain a legal entity in the country. This means that the company is still responsible for maintaining compliance. In other words, PEOs are not considered legal employers. In general, PEO services are more limited to services such as onboarding and offboarding.

EOR

When companies partner with an international employer-of-record service like Via, the third-party service is solely responsible for maintaining compliance and establishing an entity. Your international EOR (employer of record) service will manage health care, time cards, payroll, taxes, work visa & permit applications, global background checks, and other local HR processes.

On paper, the EOR is the official employer, though your company will maintain complete oversight over your team’s daily activities.

An EOR is a good option for employers looking to test out new markets.

GEO

GEO, or global employment organization, is another term that is often used interchangeably with global PEO, PEO, and international EOR.

What are the advantages of partnering with an international PEO?

As an employer looking to expand, building a strategic hub in a new market can be a daunting task. Mastering the ins and outs of local labor laws and HR processes can be cost prohibitive for companies with little to no presence in the foreign country. Building out a global hub can be challenging for small startups and major corporations alike.

By choosing the right EOR or PEO service, your business will receive support from local experts in the countries you’re planning to expand in. They will make sure that you remain compliant when it comes to:

• Health insurance

• International employment contracts

• International taxes

• Global background checks

• Global benefits management

• Managing paid-time off, including local holidays

• Onboarding

• Termination and severance

• Global payroll

• International compliance

• Work visas and permits

Your EOR partner will also make sure that you’re offering best-in-class compensation packages that go above what is mandatory, such as private health insurance. They can also help to ensure that you’re offering competitive salaries based on the employee’s experience and the role.

By streamlining local HR processes, your business will be able to:

• Hire employees in days, not months

• Enter into a new labor market without hefty legal fees

• Mitigate risk of non-compliance

• Maintaining control of your company’s IP

• Manage payroll for multiple countries with one platform

When is it best to open a foreign entity or subsidiary?

For companies with robust international expansion plans and long road maps, establishing a foreign entity or subsidiary might make sense.

However, establishing an entity will be both time consuming and expensive, as your business will need to learn how to navigate local labor and tax laws. Going global means hiring local lawyers, accountants, and HR specialists.

Management will need to determine what is better for the business in the long run when it comes to expanding operations globally.

Scaling up your business with an international PEO

Building your international team can be an uneven process.

Whether you are a startup looking to hire one person in Canada and one person in Mexico, or a major corporation hoping to build a unit of 10 engineers in Colombia, the right international PEO service will help you scale up at your own pace. Each employer has different needs, and Via is there to meet you where you’re at.

Avoiding misclassification with global contractors

During global expansion, many companies try to skirt around the issue by hiring international workers that would otherwise be considered full-time employees as contractors. While it can be a smart decision to hire contractors abroad, misclassifying full-time employees as contractors can lead to heavy fines, especially if you’re avoiding international payroll taxes.

Why companies partner with Via as their EOR

Companies of all sizes want to hire employees in foreign countries, but don’t know how to navigate the country’s local labor laws. Via makes onboarding global talent and building your global team seamless.

With our easy-to-use platform, Via helps you manage local HR processes for direct employment such as work visas & permits, insurance, payroll, background checks, and more. Our local labor lawyers and on-the-ground experts ensure that your company remains compliant while expanding abroad. As your employer-or-record/entity abroad, Via assumes full responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team.

With Via’s transparent pricing, you can pay full-time employees or contractors abroad with no hidden set-up fees, no foreign exchange or transaction fees, and no minimums–start with 1 employee and scale up at your own pace. We make it easier for your business to test out new markets and expand, all with minimal risk.

FAQ 

What is an international PEO?

An international PEO, sometimes referred to as an employer-of-record service, is a way to hire, pay, onboard, and administer benefits for employees in a foreign country without needing to build out a local HR team.

What does PEO stand for?

A PEO, or a professional employer organization, is a third-party partner that helps companies manage HR processes, such as administering payroll and benefits. Companies that partner with an international PEO enter into a co-employment model, which means that the parent company must still go about the process of establishing an entity

How do PEOs make money?

PEOs and EORs usually charge companies a monthly rate for their services. This number usually increases as the parent company hires more employees using the service.

What are the disadvantages of a PEO?

If your business chooses to partner with a PEO (as opposed to an EOR or employer of record), you will need to establish a legal entity, which can cost thousands of dollars and take months. Also, many PEOs outsource benefits and other processes to third-party providers, which can lead to unnecessary miscommunication and compliance challenges. That’s why it's best to partner with a global EOR (employer of record) like Via that owns its entity and administers its own processes for compliance, payroll, benefits, and other HR processes.