Choosing a global PEO will make your expansion journey smooth and hassle free. A global PEO would take care of your employee payroll, labor and HR requirements while employees work for your company. Without an entity, having a global presence not being able to worry about employee and statutory related issues is a big win, but to have all these benefits it is important to select the right PEO for your organisation. A global PEO will not be just another vendor, they will ensure that your employees are paid on time, while having the same comforts and benefits as the employees who work for your company headquarters. Managing all these is crucial and that’s why you need the right partner on-board. Here’s a few questions you need to find answers for before signing up with a PEO

Who are your founders?

It is important to know and understand who the founders are and the purpose of starting the PEO. You need clarity in your answer as you are relying on them to manage your biggest asset, your employees.

Who are the investors and what role do they play in the organisation?

The global PEO needs to be sustainable in the long run, to have steady funds, in terms of capital and cash reserves. You need to be able to rely on them to know that they have the ability to pay your employees by end of the month.

What is the infrastructure of your organisation?

Understanding the infrastructure is important specially to see if they are equipped with an in-house team within location, what their technology platform is and data security, legal standards.

How many partners are deployed across the globe, what is their role?

If Payroll is being outsourced to a partner it is necessary to understand their expertise and the level of responsibility handled by the PEO towards your company.

How do you follow data security requirements?

The global PEO needs to be compliant with laws and governing data in each region they operate in and has to comply with the corporate standards.

Do you use a software to maintain our employee data?

It is important to understand how and where they store employee data and if it aligns with the corporate standards.

Any rewards, recognitions or listings by a third party recently?

Understanding if the PEO is known and recognised recently for their work, where they stand in the market among other players.

Do you have a local reach?

Understand if the PEO has a local office in the country or if they have a regional office or if they operate via partners etc.

What is your process to hire and on-board candidates?

Understand if the PEO is following a standardised process in hiring and on-boarding employees, if the company culture will be communicated effectively to an employee.

Any controls or measures used to pay teams on time?

Ideally a global PEO needs to have a 99% or higher payroll accuracy rate, and needs to pay employees irrespective if the company pays them on time or not.

When you expanded sometime back to a foreign country, it must have made complete sense to establish a local legal entity in the new country. It would have been more straightforward at that time to set up an entity as a subsidiary while directly employing people to your new company. Having the brand exposure with a physical presence in the region, entering into contracts within the country, simplifying tax obligations and arrangements are some of the benefits of directly expanding with an entity. It may have seemed like the more obvious choice at that time, but the pandemic has changed everything for corporates including expansions. 

By setting up an entity, companies look at different ways of managing operations and employees, in most cases in a more expensive way. Many companies send existing employees to the new country to manage operations on their behalf, while some look at different relationships – getting individual and independent agencies to carry out the operations. Then there are certain instances where a company would acquire a smaller company within the country or look at a joint venture which will operate on a profit share and shared control.

Many corporates are looking at cost savings, cost reductions and even shutting down foreign branches to sustain businesses in the long run. Instead of shutting down, many companies are also looking into transferring the foreign entity to a global PEO (Professional Employer Organisation). There will be a significant cost saving in transferring to a PEO while this process can be done fast, cost effectively and compliantly within days. Maintaining multiple subsidiaries will be a huge burden on the operational cost in the long run therefore global PEOs such as ExroAsia offer their low cost services for companies to maintain their global officers through a PEO.

Switching from a local entity to a renown PEO in the region will give you multiple benefits including saving thousands of costs and cutting down on your operational time. Global PEOs such as ExroAsia manages payroll, HR, recruitment and employee compliance and labor issues. While a global PEO can administer payroll at a lower cost, there will be reduced compliance cost with no requirement to engage lawyers or tax advisors as this will be managed by the PEO itself. Further all HR related tasks, employee responsibilities will be managed centrally by the PEO while the company leadership can engage in more strategic decision making.

The pandemic brought in some unforeseen challenges to many economic giants in the world. Across the globe, some predict a downturn of the economy for certain countries there are forecasts for some which are expected to bounce back. Despite economic challenges businesses must survive and carry on vigilantly. While every market got affected in some way, there are certain industries and companies who managed to see the light at the end of the tunnel by taking advantage on such industries and markets.

There are many Asian countries who has survived Covid-19 outbreak without much impact and certain countries seem to have a promising growth even through the pandemic times. While Asia sustained, Europe has bounced back with operations running as usual. One of the reasons as to why operations run smoothly, is because the outsourced services to Asia has not taken much of an adverse effect throughout the past few months. Although there are travel bans that took place during this time, it did not decrease the amount of opportunity for the Asian job market. While it was sustainable for many countries to carry on with their Asian expansions and operations, many are looking at a larger expansion while even considering few countries at once. The exit costs for these markets remain low whereas the annual maintenance costs are comparatively cheaper with low labor costs.

Companies are considering different ways of expanding instead of setting up an entity completely which takes many months with a lot of effort and a high investment. There are many methods how expansion plans can still take place despite all changes at a low cost in the post pandemic landscape. Businesses consider safer and easier options overseas without having to travel since the concept of remote working has been comfortably absorbed by many markets during this time. While setting up an entity restricts many aspects, International PEO (professional employer organisation) has been the most preferred option for many companies. While International PEO does not need the company to establish an entity, it can save the cost by around 60% with a quicker turnaround time to set operations up. They can hire people, take care of HR and other compliance and statutory requirements while making the expansion process smooth and hassle free. Since there is no permanent presence in the country, the company can opt to exit as soon as they need if they feel that the business is not viable.

Many businesses look for the right partner to expand their operations, a solution which can mitigate the risks and lets the company expand with confidence. ExroAsia has many years of experience with a team of experts on board who can support your growth journey. Drop a message if you would like to have a chat.

We have been dealing with mutations and aftermath of a Pandemic for many months now. Let’s face the reality, Covid19 is here to stay for a foreseeable time. Hindering or postponing operations can only be short term not a wise choice in long term as anyone else, we all need to accept the reality and terms of the New Normal. While there are industries and companies who got hit badly, there are organisations who thrived through the pandemic, inventing and reinventing products and services or be it internal processes. If Covid19 cannot be eradicated any time soon, and if businesses have to operate as usual, how should we handle our overseas expansions is a decision that has to be taken with careful consideration. Here are few areas to consider when making a decision whether it is the right time to go global.

Stay alert to how they manage the pandemic

Many countries faced severe consequences including developed countries like the UK and USA. Certain countries managed to curb the growth from early stage, certain countries tackled the worse stages differently. It is important to understand the resilience of the people within the country and how the government, middle class and the economy stabilizes in and out of the pandemic.

Monitor trade trends

Watch out for the countries that show an economic growth during these few months. Understand how the growth occurs whether it is an event base growth or if it is a sustainable growth. Have a few trustworthy sources to monitor these identified countries regularly to track the changes and approaches taken to manage the growth during this period.

Steady infrastructure is a must

It is extremely important to evaluate the state of infrastructure within the country and monitor the progress of plans on major infrastructure changes that might take place within the near future. Is there a good transportation system in place, ground transport and logistics to be in a state to ship goods? The state of airports, distance to travel within main cities to airports are important areas to consider.

Having the correct cost structure in place

While certain companies outsource services from other countries, some may directly invest to market products, while some companies would invest in low cost labor or production facilities. It is important to understand the cost structure that could take place with inflation and other economic conditions in long term and forecast results.

Recruit the right employees

When going global, one of the key things to focus on is global competence. Whether it is for marketing, sales or customer service; having employees who can cater to the requirements is everything. It is important to map the global competencies that is needed before hand with skill sets and look at recruiting the ideal profiles that would suit the job and company.

Interested to know more on global expansion? We are here for a chat. Inbox us to schedule a time for a quick call.

When a company hires an employee, the responsibility of all tasks of the employee including payroll, HR related tasks and legal and labor requirements must be taken up by the employer. But not all types of companies want to take up the responsibility of dealing with the liability of managing employees. This is where the solution lies in signing up with an Employer of Record (EOR).

What is an Employer of Record?

An Employer of Record is an organization which serves as an employer for tax purposes, undertaking the responsibility of the legalities and statutory requirements of the employee while managing payroll and other related tasks of the employee allowing the employee to work for their client.

Tasks managed by EOR

The Employer of Record handles many areas which include below functions:

• Processing payroll
• Filing taxes
• Handling compensation
• Issuing statutory forms for EPF and ETF
• Processing time sheets
• Creating and maintaining employment contracts
• Employee onboarding (new hire)
• Maintaining certificate of insurance
• Completing and storing legal and statutory requirements
• Doing background checks and screenings
• Offering and administering benefits
• Termination of employees

Benefits of having an Employer of Record

Using an Employer of Record saves time that is spent on manual HR and payroll related tasks especially if your business has relocated to another region. These mundane tasks take up time and energy, outsourcing these would only save time to invest on strategic input. It is cost effective, and it allows the employee to manage and follow the industry’s best practices when outsourced to experts. If your business is in multiple regions, EOR can centralise operations and manage functions smoothly. EOR can completely take care of your employees legal, statutory and payroll requirements even if you are not experienced, neither you need to spend time in learning and complying with laws and regulation in multiple countries.

However, this does not mean that the employer is not responsible for their employees, the company will be responsible for health, workplace safety and compliance where as an EOR will be responsible for employment admin related areas along with payroll compliance and tax laws.

Getting an Employer of Record for your company

As an employer, it is crucial to have your employees classified correctly, paid accurately, sand managed compliantly to avoid unnecessary lawsuits and issues. Even if you manage a global enterprise or a start-up, ExroAsia is equipped to offer an EOR solution customized for your requirements. Message us for a free consultancy session.

Many companies who are looking at expanding into Sri Lanka face with two challenges. Whether or not to start and entity, or to tie up with an umbrella company who can take up the entire set up and administration hassle away from you. Many opt for an umbrella company who would deal with the complex tax and regulations on behalf of your company. Second and the most important would be to select the right umbrella company for your company. Finding the right umbrella company could be a challenge itself, which is why ExroAsia has listed down few things to consider when selecting an umbrella company for your expansion in Sri Lanka.

 Track Record and Experience

It is important that the Umbrella Company you choose has a good track record, clients who can vouch for them with good references and feedback in different subject matters. It is easy to start an Umbrella Company but it is not easy to be in the business for long unless they are ethical, proficient and follow required procedure while serving clients all across the globe.

Expertise in Labor Law and Regulations

Like every other country, Sri Lanka has its own set of regulations and legal compliances for labor. Labor department in Sri Lanka always considers the employee perspective and is known to be partial towards the employee if there is any breach in regulations and bylaws. Any setup or entity in Sri Lanka needs to abide by the strict regulations and statutory compliance to operate smoothly in the long run. It is important that the Umbrella Company has a team who are experts in local labor laws and regulations.

Have a Board of Local Directors Who are Qualified and Suitable to take on the Responsibility

In Sri Lanka statutory obligations go beyond corporate liability into personal liability for the directors and therefore, it is important to have local directors within the country. Directors who would be able to take ownership of the liabilities and deal with labor issues. It is necessary to do a background check on the directors as there haves been instances where companies have appointed individuals without a suitable background, as namesake directors, and ended up in a disaster.

Don’t opt for a Shell Company in Sri Lanka

A shell company is a corporation that only exists in paper, without a physical office or actual employees. While a shell company might serve the purpose for many other entities in different instances, it is not advisable to select a shell company as your Umbrella Company. It is necessary to conduct a proper background check to see if the company exists in the given address, if there are physical people living in Sri Lanka who would take up responsibility for your company’s compliance and employees.

Before making a decision, it is required do a thorough fact check on the company, local directors, and financial status of the company, history and track record. After all Umbrella Companies are there to support your expansion, to make it smooth and hassle-free and not to expose the client to future liabilities.

Speak to our experts at ExroAsia for advice on Umbrella Companies or consultancy in expansion.