Company incorporation is the act of forming or establishing a legal entity, known as a corporation, which is separate from the owner’s legal identity. This kind of entity can be created in almost every country worldwide to conduct business or trade. Incorporating a new seperate entity is the most obvious way to establish yourself and begin trading for companies wishing to operate in a foreign market.
However, unfamiliar local regulations can complicate this process, the steps required in many countries are long and complex, and it’s often fraught with potential problems or pitfalls that can cost companies when they’re most vulnerable.
Company incorporation allows for the most significant degree of autonomy and control over your operations once you’ve completed setup. However, it also involves the entire range of responsibilities and complications that naturally follow such a complex process.
Instead, partnering with a PEO (Professional Employer Organization) or using the services of a global EOR (Employer of Record) can allow you operational flexibility without the associated costs. Read our breakdown here to read more about the advantages and disadvantages of company incorporation and PEO services.
A professional PEO services provider can manage your HR operations, hire or provide for your employees abroad on your behalf, and maintain complete regulatory compliance in potentially unfamiliar situations.
INS Global’s team of global expansion experts understand the complexities of international expansion. We know what it takes to hire, manage, and operate worldwide. Our global expansion services give you access to all of the tools and expertise you need to succeed in today’s demanding world. Contact our consultants today to learn more about the global expansion services we offer.
No, it is necessary to use a local entity abroad to comply with each country labor law.
Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.
The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.
In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.