The Best 3 Ways to Hire Workers Overseas as an NGO

The Best 3 Ways to Hire Workers Overseas as an NGO

The Best 3 Ways to Hire Workers Overseas as an NGO

August 31, 2023


Picture of INS Global



Picture of INS Global



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Key Takeaways

  1. New laws are changing funding due to serious problems with how NGOs offer services and hire workers overseas
  2. Opening a legal entity in a foreign country is one of the most comprehensive ways to hire the best talent but it’s filled with potential risks
  3. NGOs can benefit from EOR services in many ways, including compliance assurance, expansion speed, and reduced liability


Today, Non-Governmental Organizations (NGOs) play a key role in meeting global challenges, from humanitarian crises to environmental safeguards. While striving to make a positive impact on the world, NGOs often need qualified personnel who can navigate international operations without problems. However, the processes needed to hire workers overseas can be daunting, with logistic, legal, and cultural hurdles.

This is all the more true for NGOs where funding and brand image do not allow for even the slightest mistakes. Many incidents in recent years have shown the importance of robust hiring and payroll control when finding and managing staff overseas.

Particularly in vulnerable areas like India, governments are cracking down on NGOs. New laws are changing funding due to serious problems with how NGOs offer services and hire workers overseas.

This article looks at the steps you can take to ensure you are protected when working on important goals. We also explore why some tried and tested methods used to hire workers overseas need to be improved or rethought.


What are the Best Ways for an NGO to Hire Workers Overseas?


Opening a New Company Internationally


Opening a legal entity in a foreign country is one of the most comprehensive ways to hire workers overseas. This involves registering a branch office, subsidiary, or new structure in your target country. Through that local structure, an NGO can then hire workers overseas directly. This method has several pros at first glance and is the most well-known way to expand.

Having a physical presence abroad can enhance an NGO’s credibility and reputation among local stakeholders, donors, and partners. Likewise, setting up a local entity gives an NGO complete control over its operations and staff in the foreign location. This allows for a more direct and hands-on approach to its mission.

However, global expansion strategy can be resource-intensive and will require navigating complex legal and administrative processes. It’s best suited for NGOs with a long-term commitment and significant resources for international expansion. As a result, smaller NGOs with a bigger commitment to using funding for their mission may struggle with compliance obligations.

An NGO moving into a new country can also do more harm than good, even in how they hire workers overseas. This is a problem in many countries according to some international watchdogs. This is particularly possible if they don’t correctly understand local needs and best practices. Simply opening a company in a new country is often not enough.


Independent Contractors and NGOs


Another option is to hire independent contractors or consultants abroad. This approach is flexible and scalable and can be particularly useful for short-term projects or tasks that need specific skills.

Contractors can be cost-effective to hire workers overseas since NGOs don’t need to provide benefits or cover employment-related expenses. That being said, it’s essential to know what your organization must provide to avoid classification errors.

NGOs can tap into local expertise and knowledge by hiring contractors familiar with the local culture, language, and regulations. However, this is also the case with all local employees whenever you hire workers overseas in your target region.

Most of all, contractors provide flexibility to scale up or down based on project needs. They allow NGOs to do this without the long-term commitments associated with full-time employees. This is because a contractor agreement is typically much easier to end.

On the other hand, with contractors, it is much harder to ensure accurate legal representation. NGOs may put themselves in danger when trusting the wrong local specialist or being unfamiliar with local requirements.


Employer of Record (EOR) Service Benefits for NGOs Overseas


EOR services are third-party organizations that act as legal employers for foreign workers overseas or at home. NGOs can benefit from EOR services in many ways, including compliance assurance, expansion speed, and reduced liability for essential HR functions.

EORs handle payroll, tax compliance, and employment regulations, reducing the legal and administrative burden on the NGO and mitigating compliance risks. They can also expedite the process of hiring international employees by providing an established infrastructure for employment in the foreign country. This allows NGOs to deploy staff or volunteers quickly to target areas.

By outsourcing HR tasks to EORs, NGOs can focus on the core mission while the EOR takes care of the rest.

EOR services can be particularly useful when NGOs need a faster and more streamlined approach to hiring workers overseas but want to ensure legal compliance.

Careful planning and consulting with legal and HR experts are essential to make the right decision for successful international hiring.

Incidents of payroll or HR mistakes highlight the importance of understanding and adhering to local wage and labor laws when employing local staff in foreign countries. NGOs must ensure that their payroll practices align with local legal requirements to avoid potential legal issues and a loss of brand image.



Does an NGO Have to Set up an Entity Overseas? An INS Global Expansion Expert Explains Why International Company Incorporation Might Not Be Right for You


Non-governmental organizations (NGOs) are pivotal in addressing global issues, from poverty to environmental conservation. According to Wei Hsu, INS Global founder and international expansion consultant, many NGOs struggle with whether or not to set up an entity to hire workers overseas as their work expands. In fact, this is often a primary concern that can delay or disrupt essential projects.

While establishing a foreign entity can provide certain advantages, it might not be the right choice for every NGO due to key factors.


Local Partnerships


Firstly, one of the primary reasons NGOs consider a new international company is the access to local funding sources and partnerships abroad. NGOs may find it easier to secure grants, donations, and collaborations with international organizations by having a legal presence in a foreign country. However, this process can be costly, involving legal fees, compliance with local regulations, and administrative overheads that divert funds away from their intended purposes.

The decision to set up an overseas entity depends on the nature of the NGO’s work. Some NGOs primarily operate locally and may not even require a physical local presence to achieve their mission. In such cases, a new company structure may only be a drain on resources and dilute their impact.


Overseas Legal and Fiscal Compliance


Other crucial considerations are the legal and regulatory environment in host countries. Different countries have varying degrees of bureaucracy, corruption, and political stability, which can affect NGOs more than most. NGOs must carefully assess whether the benefits of international incorporation outweigh the risks associated with operating in a foreign jurisdiction.

Taxation is another significant factor. Some countries have tax benefits for NGOs. However, they can also introduce extra problems in terms of cross-border taxation, remote employees, or tax residency. NGOs should seek professional advice to navigate the tax implications effectively.

Moreover, their choice to set up overseas entities can affect the public perception of international NGOs. A good public image potentially means avoiding scrutiny or extra costs.

While opening a new company abroad can offer advantages to NGOs, it is not a one-size-fits-all solution. It’s a good idea to base this decision on your mission, funding needs, legal requirements, and the challenges of operating in a foreign country.

All these are unique to each NGO. As a result, the right solution for your NGO must come from a place of understanding of your individual situation.