Don't have time to listen to a full webinar? View our slide deck, "Simplifying Your Foreign Operations: A Better Business Model." In today’s global market, expanding overseas is no longer a luxury, it’s a necessity. American businesses are aggressively pursuing international expansion to increase revenues and win new customers. However, there are challenges that come with international expansion: entity structuring, employment contracts, statutory benefits and tax compliance are just some of the issues that can fast become obstacles for businesses expanding operations overseas.

1. SIMPLIFYING YOUR FOREIGN
OPERATIONS: A BETTER
BUSINESS MODEL

2. SO YOU’RE HIRING
OVERSEAS, ASK YOURSELF …

3. DO WE NEED AN
ENTITY IN
COUNTRY? IF
SO, WHAT ARE
OUR OPTIONS?

4. WHAT ARE THE LOCAL
REQUIREMENTS FOR
EMPLOYMENT?

5. WHAT TYPES OF
CONTRACTS
ARE REQUIRED?

6. WHAT ABOUT
MANAGING
EXPATRIATES?

7. ARE THEY
CONTRACTORS
OR EMPLOYEES?

8. PREFER TO LISTEN TO OUR
WEBINAR ON SIMPLIFYING
FOREIGN OPERATIONS?
CLICK HERE.

9. WHY DOES COMPANY
STRUCTURE MATTER?

10. A LEGAL PRESENCE INDICATES COMMITMENT
TO MARKET & CREATES COMMERCIAL
FOOTPRINT WHICH ASSISTS IN THE HIRING
AND RETENTION OF EMPLOYEES

11. IT DICTATES THE REQUIRED REGISTRATIONS
AND TIMELINE FOR SET UP, WHICH IN TURN
DICTATES SPEED OF HIRE

12. IT WILL AFFECT THE ACTIVITIES PERMITTED
TO BE CARRIED OUT IN COUNTRY

13. IT AFFECTS YOUR COMPLIANCE
OBLIGATIONS

14. IT AFFECTS THE OVERALL COST
OF OPERATIONS

15. KEY ENTITY TYPES
REPRESENTATIVE
OFFICE
BRANCH SUBSIDIARY

16. REPRESENTATIVE OFFICE
ONE OF THE EASIEST WAYS TO GET SET UP
OVERSEAS, IT ALLOWS A COMPANY TO
ESTABLISH A MINIMAL PRESENCE BUT
EMPLOYEES CANNOT ENGAGE IN SALES OR
CONTRACTUAL MATTERS.

17. BRANCH OFFICE
AN EXTENSION OF A PARENT COMPANY,
SERVING A CERTAIN GEOGRAPHIC AREA. IT
CAN ENGAGE IN CORE ACTIVITIES, SALES, ETC.
IT’S NOT A SEPARATE LEGAL ENTITY; FOREIGN
PARENT SUBJECT TO ALL LIABILITY.

18. SUBSIDIARY
A SEPARATE LEGAL ENTITY FOR ENGAGING IN
BUSINESS OVERSEAS. PROVIDES A LAYER OF
PROTECTION BETWEEN THE INTERESTS OF
THE PARENT AND THE ON-THE-GROUND
ENTITY BUT INVOLVES A LONG SET UP AND
REGISTRATION TIME — HEAVY OVERSIGHT.

19. PERMANENT
ESTABLISHMENT RISK
A DETERMINATION OF PERMANENT
ESTABLISHMENT GIVES LOCAL
AUTHORITIES THE POWER
TO ASSESS INCOME OR A VALUE-
ADDED TAX

20. ARE YOU OPERATING OUT OF A
FIXED PLACE OF BUSINESS?

21. DO YOUR EMPLOYEES HAVE
REVENUE-GENERATING ROLES?

22. ARE SALES MADE
TO CUSTOMERS
IN-COUNTRY?

23. ARE YOUR EMPLOYEES
RECEIVING COMMISSION?

24. A DETERMINATION OF PERMANENT
ESTABLISHMENT GIVES LOCAL
AUTHORITIES THE POWER
TO ASSESS INCOME OR A VALUE-
ADDED TAX

25. UNDERSTANDING THE REVENUE MODEL AND ROLE
OF YOUR OVERSEAS ENTITY IS CRUCIAL TO
UNDERSTANDING THE ASSOCIATED TAX AND
COMPLIANCE REQUIREMENTS
REVENUE MODEL NEEDS TO BE
REFLECTIVE OF THE ACTIVITIES

26. REVENUE MODEL NEEDS TO BE
AT “ARM’S LENGTH”
ADHERING TO TRANSFER PRICING
CONCEPTS FOR CORPORATE TAX PURPOSES

27. CONSIDER INDIRECT TAXES
(SUCH AS VAT OR GST) ON
THESE TRANSACTIONS – SALE
AND IMPORTATION OF GOODS

28. INTERNATIONAL
STAFFING PROFILES
CONTRACTORS EXPATRIATE
EMPLOYEES
EMPLOYEES

29. CONTRACTORS
• IS FREE TO WORK FOR OTHER
COMPANIES/INSTITUTIONS
• DOES NOT HOLD BUSINESS CARDS IN THE NAME OF
THE COMPANY/INSTITUTION
• CAN BE SUBSTITUTED
• USES THEIR OWN EQUIPMENT
• IS NOT USUALLY GRANTED STOCK OPTIONS AND
EMPLOYEE INCENTIVE PLANS

30. • WORKS FOR ONE COMPANY ONLY
• USUALLY PAID AT REGULAR INTERVALS, NOT ON A
JOB-BY-JOB BASIS
• THE WAY THEIR WORK IS CARRIED OUT IS
CONTROLLED BY THE COMPANY
• HAS EQUIPMENT PROVIDED FOR THEM
• IS GRANTED STOCK OPTIONS AND OTHER COMPANY
PROVIDED BENEFITS
• MAY QUIT OR BE DISCHARGED
EMPLOYEES

31. EXPATS
• EXPATS MAY BE CRITICAL IN HELPING YOU GROW
YOUR BUSINESS IN OVERSEAS MARKETS
• SENDING AN EMPLOYEE ABROAD, HOWEVER, CREATES
A HOST OF ISSUES, AND TAX LIABILITY IS ONE OF THE
MOST COMPLICATED

32. EXPATS
• A MAJOR CONSIDERATION IN DESIGNING AN
EXPATRIATE PACKAGE IS THE DEGREE OF TAX
ASSISTANCE PROVIDED TO THE EMPLOYEE
• TAX ASSISTANCE IS REQUIRED TO ENSURE THE
EMPLOYEE DOES NOT HAVE TO PAY MORE INCOME
TAXES AS A RESULT OF THE ASSIGNMENT THAN
WOULD HAVE BEEN PAID AT HOME

33. OFFERS LETTERS AND
EMPLOYMENT CONTRACTS
• MOST COUNTRIES REQUIRE A LOCALLY COMPLIANT
EMPLOYMENT CONTRACT
• LOCAL EMPLOYMENT LEGISLATION WILL TAKE
PRECEDENCE IF THE TERMS OF THE EMPLOYMENT
CONTRACT ARE LESS FAVORABLE THAN LOCALLY
MANDATED OR STATUTORY TERMS, OR IN CASES
WHERE NO EMPLOYMENT CONTRACT EXISTS

34. • BE WARY OF LOCAL HR ISSUES:
• COLLECTIVE BARGAINING AGREEMENTS AND
TRADE UNIONS
• HOLIDAY PAY
• POST TERMINATION RESTRICTION PAYMENTS
• WORKING TIME
• HOLIDAY ROLLOVER PROVISIONS
• LOCAL LANGUAGE REQUIREMENTS
OFFERS LETTERS AND
EMPLOYMENT CONTRACTS

35. EMPLOYEE BENEFITS
GLOBALLY, THE EMPLOYER-
EMPLOYEE RELATIONSHIP WILL
VARY, DEPENDING ON YOUR
OVERSEAS COUNTRIES.

36. EXTENSIVE STATUTORY BENEFITS
MAY EXIST AND BE REQUIRED –
SUPPLEMENTAL BENEFITS ARE
UP TO YOU BUT BE AWARE OF
LOCAL INDUSTRY AND COUNTRY
BEST PRACTICE. FOR EXAMPLE …

37. THE NETHERLANDS
EMPLOYEES OFTEN EXPECT A
COMPANY CAR AS A STANDARD
BENEFIT, BUT IT IS ALMOST
IMPOSSIBLE TO TAKE OUT A CAR
LEASE UNLESS THE COMPANY HAS
A LOCAL ENTITY ESTABLISHED.

38. LEARN IN-COUNTRY
STATUTORY REQUIREMENTS
AS WELL AS BEST PRACTICES
TO CREATE AN EFFECTIVE
BENEFITS PLAN

39. BELGIUM
PAYROLL IS MADE IN 13.92
INSTALLMENTS PER YEAR
GRANTING STOCK OPTIONS
CREATES A PROBLEM WITH
OWNERSHIP.

40. BE SENSITIVE TO AND
UNDERSTAND THE LANDSCAPE
IN EACH COUNTRY

41. MEXICO
FEDERAL LABOR LAW GOVERNS
TERMINATION INDEMNITY
BENEFITS, WHICH ARE FUNDED
BY THE EMPLOYER.

42. CONDUCT LOCAL EMPLOYEE
BENEFITS BENCHMARKING

43. AUSTRALIA
SUPERANNUATION
GUARANTEE ACT MANDATES
THAT EMPLOYERS MUST
PROVIDE RETIREMENT
BENEFITS — MINIMUM
EMPLOYER CONTRIBUTION
IS 9% OF SALARY.

44. QUANTIFY AND QUALIFY
EXISTING PLANS IN
EACH COUNTRY

45. GERMANY
MANDATORY
SUPPLEMENTAL HEALTH
INSURANCE WHERE
EMPLOYEE OPTS OUT OF
STATE HEALTH SYSTEM.

46. A GOOD HR ADMINISTRATIVE
INFRASTRUCTURE IS KEY TO
SUCCESSFUL PROGRAM
IMPLEMENTATION

47. LET US HELP YOUR BUSINESS
MOVE INTO NEW MARKETS
NEED HELP SIMPLIFYING YOUR
FOREIGN OPERATIONS?
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