If you need to employ someone in a country in which your business has no base, there could be all sorts of legal and administrative complications. For example, tax and social security issues for the employee and a risk that your business will be considered tax resident in the new country – exposing you to an obligation to pay corporation tax. To circumvent these risks, businesses sometimes use what are known as 'employers of record'.
These organisations contract with the employee and take responsibility for all the paperwork and they are on record as the employer for administrative purposes. This can be a great help, given the increasing clamour by employees to work remotely, along with a desire on the part of employers to access talent in previously untapped markets. But beware – employers of record are not permitted in some countries. We have surveyed which of our member countries allow this and which don't and have then looked at the risks of using employers of record.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
