Easy Cross-Border Remote Work Using an Employer of Record

Easy Cross-Border Remote Work Using an Employer of Record

Easy Cross-Border Remote Work Using an Employer of Record

February 6, 2023

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Key Takeaways

  1. Cross-border remote employees must comply with the tax laws of their resident country
  2. Without a company branch or EOR, US companies cannot hire remote workers from abroad
  3. Hiring cross-border remote employees gives you global access and improves your client services
Summary

 

Today’s technological advancements and the increasing popularity of remote work have made cross-border employment more accessible than ever. Being able to hire globally without physically entering new markets also gives companies significant opportunities to expand their staff and reach international markets.

However, hiring cross-border remote workers requires legal compliance in both the country the company is located in and that of the remote worker. This may sometimes involve legal systems in multiple jurisdictions, which can quickly become arduous to manage.

Here we will simplify the process for you by explaining point by point what cross-border work is and how you can hire remote workers quickly and securely.

 

What is Cross-Border Work?

 

Cross-border work, or cross-border employment, is when employees live in a different country from the company they work for. This typically utilizes some form of remote work arrangement. For some part-time workers and independent contractors, this can also mean working in multiple countries simultaneously.

Cross-border employees are expected to adhere to the legal requirements and labor laws of the country they’re living in and the country, or countries, where they perform their work.

For example, John lives in the Netherlands. He works remotely doing customer service for a shipping company based in the US. As a result, John’s US employer will need to ensure he follows remote worker guidelines in both the US and the Netherlands.

 

How Do Employees Work Remotely?

 

With the rise of virtual meeting software, remote work has become easier for workers across most industries. Remote workers typically work at home or in the most accommodating space, saving employers on costs.

Remote workers will meet with managers, clients, and teammates through virtual programs like Skype, Zoom, or other web-based meeting platforms. This allows them to have the same level of communication and involvement as a worker in the office.

Some companies may provide computers, expenses, and software equipment for their remote workers. Others will require the remote worker to have the necessary equipment already. This depends on the size of the company and the type of work needed. The company should always try to accommodate the remote worker for specialized setup or software.

Despite the difficulties of providing necessary HR functions and legal security to overseas workers, there are options to help. A global Employer of Record (EOR) offers total management of employer responsibilities to overseas workers by hiring them on your behalf. You remain in full control of daily activities while their needs are met by experienced HR professionals.  This means you can hire and manage staff anywhere in the world in as little as 48 hours, without the need for a local entity.

 

Can US-Based Companies Hire Remote Workers from Outside the Country?

 

Yes, but the company must have a branch in the worker’s country or use a third-party organization to hire the employee.

The processes required may not be familiar to many employers, so it is essential to check what policies are in place for the country your remote worker is living in for proper taxation compliance.

 

The Pros and Cons of Cross-Border Remote Work

 

Pros

 

  • Reduced costs

Not only does remote work save on office space and location costs, but when hiring from abroad, you can pay remote employees according to the salary expectations of their country. These can be significantly lower than the market of your company.

  • Expansion into global markets

Having a global team via cross-border remote work is a fast and reliable way to gain a foothold in international markets and become familiar with other countries and their business etiquette.

  • Better services for your clients

With remote workers worldwide, you can offer 24/7 custom service, language-specific communication services, and more prompt responses to your clients’ needs.

 

Cons

 

  • Country-specific payroll compliance issues

Local employment and payroll taxes are often updated and changed. If you fail to ensure that your remote work employees comply, it could result in expensive fees and fines.

  • Time zone differences and internet issues

Having to rely on virtual meetings for communication and staff coordination can be problematic for many reasons. Some countries may have internet that is more subject to censorship, delays, or connectivity issues.

  • Lack of clear communication

Managers and overseers must show expertise in managing a remote cross-border team. Otherwise, they may struggle to adapt to remote employees’ needs. Long-term problems like this can negatively impact operations.

 

Cross-Border Remote Work FAQ

 

Q: How long can I employ a worker remotely from outside the US?

Most countries allow employees to work remotely outside their resident country for 90-180 days without a work permit or visa. After this, you will need to ensure that an employee has applied for the right residence documentation. This is likely to be either a digital nomad visa or the appropriate work permit to continue working for you safely.

 

Q: Do US-based remote workers have to pay taxes?

The US does not require the same kind of taxes from non-citizens living outside the country when working for a US-based company. However, remote employees should pay taxes in the country they’re residing in.

 

Q: Do US remote employees in Mexico have to pay taxes?

US citizens located in Mexico,  and working remotely for US-based companies do not have to pay taxes in Mexico. They will continue to be taxed by the US government as a citizen of that country. However, this may not be the case in other countries. Understanding the legal regulations around cross-border remote work taxation is essential. Lack of legal knowledge  may mean you find yourself at risk of double taxation.

 

 

Let INS Global Help You Hire Cross-Border Workers Quickly and Easily

 

Hiring workers from abroad may be restricted to companies that have a physical presence in the overseas market. US companies can hire cross-border independent contractors without having a separate legal entity, for example. However, this can still put you in danger of misclassification errors.

The safest and fastest way to hire remote workers from abroad is to partner with an Employer of Record. With an EOR, you can hire from a deep talent pool and find the perfect remote employees for your team. Because our staff are seasoned professionals you can manage this all while staying legally secure and risk-free.

Finally, INS Global offers EOR services in over 80 countries worldwide. We give you access to a global network of remote employees to fill all your needs in a streamlined and tailormade package.

Contact us here today to learn more.

 

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