International Operations – Things to Consider

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 May 29, 2019 Global Growth , International Expansion , Labor Laws  Blueback Global

International Operations – Things to Consider

Expanding internationally is a wise choice for any company seeking new revenue streams and competitive advantages. Lucrative foreign markets can increase profits and solidify your brand as an international leader. 

Nonetheless, companies need to consider many factors before expanding abroad. Here are some of the things your business should consider while planning an operational expansion into uncharted territories. 

International Business Registration & Entity Setup 

Before conducting business in a foreign location your company needs to establish itself as a legal entity within the target region. In addition, each business needs to comply with local tax registration, social security, and employer requirements and must register its international business license. 

In some jurisdictions, establishing a business and meeting requirements is a formal, complicated process. Language and cultural differences can increase complexity as well. If handled improperly it can lead to costly, time-consuming non-compliance issues which impact operations and your bottom line. 

Fortunately, company registration and entity setup isn’t an insurmountable hurdle. With the right global partner, you can establish your business abroad quickly and simply, including setting up a foreign bank account for your new operation. 

Accounting & Financial Reporting 

Conducting business in another country involves new accounting and reporting requirements within the host country. However, not every business can justify the expense of a dedicated foreign accounting team, plus they may not want to spend months setting up their financial and accounting operation.  

Luckily, other options such as outsourced local accounting and financial reporting can help your business sidestep this challenge. Your business relies on the expertise of regional partners with an intimate knowledge of local and regional requirements.  

Since they operate in the region, your business also adheres to accepted cultural standards and relies on regional languages too. 

International Payroll 

Your company can’t rely on the same payroll methods used at home when paying foreign employees. Every country has its own laws regarding withholdings, leave, overtime, and more and they’re often very complicated. 

Fortunately, your business can expand internationally without investing valuable time, energy, and resources into deciphering international payroll law. Centralized payroll eliminates the need to hire your own trained personnel. It also eliminates a large expense for any business– capital investment in equipment. 

Today’s highly-efficient payroll systems offer the sophistication of multiple in-country payroll service providers, but more affordable. Your business easily maintains control across multiple locations with a single point of contact. Local and regional payroll experts ensure your company remains complaint and always follows best practices.

Human Resource Compliance 

Managing human resources abroad is a complicated and time-consuming process. Labor regulations, employee rights, benefit requirements, and governmental attitude can impact your foreign operations. 

Each jurisdiction has its own specific legislation and government requirements which describe how your business must treat your employees. Additionally, these laws and regulations change frequently and quickly, making statuary compliance a daunting task. 

Non-compliance can lead to serious complications no business wants to face. Your business needn’t tackle this challenge singlehandedly. A good global partner tracks government and legislative changes connects with your business through a single point of contact and provides timely reminders to ensure compliance.

From the planning stage through to hiring, your company can adhere to accepted compensation and benefits benchmarks and fulfill its contractual requirements. A skilled international partner can provide proper documentation and comprehensive summaries to reduce company risk and inform decisions as your business moves into its new market. 

International Operations - human resource compliance

Expert International Business Advice 

Expanding into new territories comes with new challenges, so it is important your business has an international expert on your side. Legal, accounting, and communication issues may be difficult to resolve when your business tries to go it alone. 

Any business that wants to expand operations internationally should have a reliable advisory team with extensive experience in global expansion. Undoubtedly, your company will have questions regarding matters such as employee terminations, revenue reporting, intercompany agreements, and stock options for the foreign arm of your business. 

Sound international business advice is also invaluable should your business face a financial or tax audit. Your international partner should have solid connections with local and regional authorities and your best interests always in mind. 

Immigration & Mobility Support 

Managing your company’s human resources at a global level requires international expertise and a strong global network. Otherwise, your company could pay more than necessary, lose its competitive edge, operate less efficiently, and potentially violate regional laws and regulations. 

In many countries, governments regulate certain professions and companies need to notify the appropriate authorities when workers operate in their territory. Additionally, employees assigned to some regions must register with the finance ministry when their gross salary exceeds particular limits. 

International business expansion - Immigration & Mobility Support

Often times, services performed in a foreign country require a permanent establishment even if an employee performs services for less than a month. Consequently, employers usually pay employment taxes and social insurance contributions for its employees if they’re present in the country over a set number of days. The employer must also adhere to the country’s payroll requirements.  

To further complicate matters, some countries have tax treaties with other nations so employees may not pay tax if they work within the country’s borders for less than a set number of days. However, some countries tax salaries in their home country even when a person works elsewhere. 

Employee rights legislation may also supplant those of a foreign employment contract when it provides better conditions for workers. These include minimum salaries and working time regulations and non-compliance can result in stiff penalties. 

Finally, employers have an obligation to properly report and maintain salary documents. Required documents may include legal employment contracts, wage records, records of working hours, employee classification records, and work permits. Laws are often more stringent for foreign companies and may not follow standardized rules. 

Your business needs tailored human resource services to suit your needs so your international operation seamlessly blends with your existing internal HR team. Typical requirements include a standard suite of services such as recruitment, training, and performance monitoring. However, your business may also require immigration and mobility assistance or expatriate assignment management on your behalf. 

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Blueback Global is your international business expansion expert. With a network of global professionals each with regional knowledge and local business savvy, we simplify global expansion. 

We’re well-positioned, highly-experienced, and can help you overcome your multinational business challenges. Contact us for a free consultation and cut through the complications of global expansion. 

Contact Blueback Global Today!