In the traditional playbook of global employment, setting up a legal entity in a new country has long been the norm. However, this method comes with significant drawbacks, both in terms of time and money. Managing a global workforce through this approach is often complex, confusing, and time-consuming.

Fortunately, there is now a more efficient way to onboard global talent without the hassle. Employer of Record (EOR) solutions, like Remoly, provide a streamlined alternative to opening legal entities, helping businesses reduce costs and maintain competitiveness. If you're contemplating establishing an overseas entity to hire global talent, our advice can be summed up in one word: don't! (or perhaps two?)

Why not, you ask? In this article, we'll compare the traditional method of opening legal entities with the modern approach of using an Employer of Record.

Opening Legal Entities: The Outdated Approach

Firstly, it's crucial to grasp the challenges associated with opening a legal entity in a new country.

1. Compliance Issues:

Managing legal and regulatory requirements, including tax filings and employment laws, can be a full-time job. Non-compliance can lead to legal disputes, fines, or even business dissolution.

2. Administrative Paperwork:

Despite technological advancements, paperwork remains a significant burden. Failing to maintain business records and documents can result in legal and financial consequences.

3. Setup Costs:

Establishing a business entity incurs upfront costs such as legal and registration fees, as well as ongoing operational expenses.

4. Ongoing Expenses:

Rent, utilities, insurance, and salaries contribute to ongoing operational costs, making overseas operations financially burdensome.

5. Personal Legal Liability:

Depending on the entity setup, business owners may bear personal liability for debts and legal issues, risking personal assets.

6. HR Management Complexity:

Handling HR functions in a different jurisdiction involves challenges in recruitment, onboarding, employee benefits, and performance management.

7. Limited Flexibility:

Business entities can be cumbersome to shut down and may hinder international growth or scaling based on changing business needs.

8. Time Deficiencies:

Managing a business entity demands significant time and attention, diverting focus from core business activities.

9. Tax Complexity:

Navigating complex tax regulations in different countries can lead to unexpected increases in tax rates.

Using an EOR: The Remoly Advantage

Remoly offers a Software as a Service (SaaS) based Employer of Record solution, revolutionizing global expansion without the need for establishing individual business entities.

1. Costs:

Remoly's onboarding costs for full-time employees start at $29/month, covering essential services like instant employment contracts, multi-country payroll, multi-currency payments, benefits administration, and more.

2. Compliance:

The platform ensures contract compliance with local laws, eliminating the need for legal fees when handling payroll.

3. Time:

Remoly stands out with a self-service web app, allowing employers to hire and manage global teams effortlessly. The platform offers payroll dashboards, timesheets, and rapid onboarding.

In conclusion, establishing legal entities for global hiring can be an outdated and burdensome approach. With Remoly as your Employer of Record, you can focus on finding the right talent, while we handle the complexities of global workforce management. Stay competitive, hire compliantly, and simplify your international operations in over 160 countries. Talk to us today for a seamless and cost-effective solution!