Staying on top of compliance updates is crucial. Companies who fail to do so may risk legal penalties which could affect both the reputation and drain the organization financially; It could worse case scenario even lead to the business being shut down completely.
For these reasons, many organizations choose to use the help of an Employer of Record (EOR) in getting compliance tips for expansion. In this post we will give you the best tips and risks to be considered by an industry expert.
With work from home becoming normalized, it is important to consider how this will have an impact on compliance, which will also be discussed.
What are your top compliance tips for companies looking to expand?
The most important compliance tips that companies need to consider before relocating is to get familiarized with the country’s personal income tax laws and to be on top of the local employment laws.
All countries have different tax treatments which makes it important for companies to be aware of the personal income tax law that is enacted in the desired relocation country. For instance, in Singapore you are only taxed the following year and there are specific rules in regards to tax deductions.
Being on top of the employment laws of the desired location is a necessity in a compliant expansion. The employment law mandates the minimum standard of benefits that an employer needs to provide the employee. Further, awareness of the industry best practices, in regards to the number of leave days to be awarded per year, the medical coverage etc, is also key in getting regarded as an employer of choice.
🤩 What do you consider the top 3 employment risks companies?
1️⃣ The company needs to be registered with relevant departments for the payment of taxes, employees’ provident/social funds, state health insurance plan and so on. This could be done internally through the organization but a recommendation would be to do it through a local partner who has full knowledge of the requirements. As different countries have different standards of practices, it is crucial to be aware of the local employment laws.
2️⃣ The company should be aware of the salary arrangements in the country where they want to hire so as to avoid over or underpaying their workers.
3️⃣ The company should be on top of the discriminatory hiring practices. Countries have different tolerances in regards to discriminatory hiring practices such as:
- The amount of females workers
- The legal age of working
- Local vs foreign percentage of employees
- Severance payments
Companies should therefore ensure that they are in line with fair employment practices in order to stay compliant in their hiring.
What is your prediction on the future of work?
The pandemic has had a big impact on the future of work. It has required companies to be more reactive to changing laws, with countries switching regulations regarding travel and vaccination requirements. While it has created complications for businesses to relocate, one cannot deny the array of opportunities that has come with it as well. The normalization of remote work will allow for companies to get employees from various countries; talent that doesn’t necessarily need to be relocated but where employees have the flexibility of even working from their home country.
It is very unlikely that laws and regulations will change to be more adapted to remote workers in the future. However one can expect that companies will be increasingly open to changing their policies to be more open to remote workers. Furthermore, companies will most likely become more open to engage with remote workers, allowing them to get access to a more diversified pool of talents without the need for them to relocate to a different country.
We at Agile HRO are no strangers to remote work or helping companies succeed, no matter how or where in the world. If you’re thinking about setting up a remote team, hiring employees around the globe, or simply considering expanding your business, feel free to reach out to us and tell us how we can help.