When you expand internationally, there are so many factors to consider; what country to choose, language and culture, corporate and tax laws, regulations, and payroll requirements. As more companies expand, they find that starting a business in a new country is not as easy as it sounds. Having a global payroll partner with local in-country expertise is vital to success.
Where in the world to start?
India has over 1.2 billion people, a rapidly expanding middle class, and a highly skilled labor force. The challenges in India include; multiple legal and administrative systems, frequent changes to state and central governance laws and regulations, and 33 tax payments per year. To navigate expansion in India, use a partner who can manage the local regulations companies have to comply with, as well as the frequent revisions to state and central regulations that can cause heavy fines and additional charges.
Germany has the largest economy in Europe, sophisticated infrastructure, and strong business culture. Challenges in Germany include; a complicated tax system, with many types and payments, strict compliance laws, and many requirements needed to startup. You need in-country providers who know the laws to ensure all compliance and tax regulations are strictly followed. To grow or expand your business in Germany, use a partner who can manage the ever-changing tax regulations and local compliance requirements.
Mexico is a developing nation that is politically and economically mature, a natural bridge between Latin America and United States, and has a large young labor force. The challenges in Mexico include; Federal Labor laws with mandatory employee benefits, language barriers, customs and currency exchange. To navigate expansion in Mexico, you need a partner who can manage the extensive labor laws and regulations. There are many mandatory benefits for employees including profit sharing, bonuses, paid religious and legal holidays, employer housing contributions, and pensions.
Australia has the top economy in the Asia-Pacific region, very few barriers to entry, and simple startup procedures. Some challenges you may encounter in Australia include multiple tax payment requirements each year, and retirement fund contributions (superannuation levy) increasing each year. You need a consultant to help set up the right business structure for your company, manage tax payments and communications with tax authorities, and guide you through the retirement funding requirements in Australia.
Canada has a highly educated population, the 11th largest economy in the world, and most of the population living very close to the U.S. border. Some challenges you may face include; strict tax laws and resident requirements for employees working in Canada, firms in Quebec require business transactions to be conducted in French and must do business with a French firm name. Having a local partner who can guide you through the language and customs of each province of Canada is vital to ensure compliance. They can also help manage the tax regulations and language requirements of each province.
Brazil offers a large labor force with the 7th largest economy in the world. Brazil is a developing nation with lagging infrastructure, requiring multiple tax payments, complex customs and legal systems, and Brazil is the only country in the Americas with Portuguese as the official language. You need an expert to help you expand or continue to grow your business in Brazil by guiding you through the complex legal structure and constantly changing tax regulations, and using Portuguese-speaking consultants to ensure language is not a barrier to your expansion.
Hong Kong and Singapore are unique city-states with high incomes and low tax and unemployment rates. Some challenges you can face are registering companies and property, procuring electricity, and trading across borders. Employee compensation insurance laws can also be complicated, so you should consult a payroll expert to guide you through the regulations.
How payroll solutions can help
Cloud-based payroll solutions make it easier for small and mid-sized companies to manage international payroll. Look for a payroll solution with aggregated reporting, and the ability to view your payroll across all countries you have employees in. Your international employees must be paid accurately, on time and in full compliance with complex, country-specific laws and regulations, so it’s important to ensure your payroll solution is compliant.
Other factors to consider are registering your company abroad, establishing banking in new countries, identifying in-country benefits and accounting services, and time collection. Finding a global consultant to help with other expansion services can be helpful to ensure you are compliant with the country specific laws. There has never been a better time to expand globally, and finding the right solutions is key to your success.