Global Employer of Record: Expanding Outside Australia

Global Employer of Record

Even though Australia’s economy is rated as the 14th largest in world, it is still comparatively small in relation to the US, China, Japan, India, Germany, the UK or France. Expanding into other markets can give your company room to really grow its market. While a bigger market is attractive, getting people on the ground in new countries is challenging.

Using a global employer of record can make it very much easier to get great talent to work for you in new markets. These organisations have a presence in many countries and will take over the complex work of hiring employees for you.

Barriers to International Expansion

    You cannot just fly to another country, rent an office and hire employees. While the barriers differ from country to country, they often include the following factors:
  • Requirement to include a local on the board of directors
  • Requirement to deposit capital in a bank before starting to operate
  • Dealing with legal requirements when hiring employees
  • Making sure that you are following the local law with your HR practices
  • Dealing with the local tax laws.

Even the simplest thing like a letter of offer to a prospective new employee needs to be tailored to fit the local conditions.

Setting up a Subsidiary

One way to expand into a new country is to set up a local subsidiary. This will give you a solid base to work from and will let you grow your business in the new country once the subsidiary is set up. However, it can take a long time to set up a subsidiary and this process can be expensive.

This is fine if you are sure that you are going to be a hit in the new country and will want to grow fast. But if you are unsure if you can make it in this new market, you need to find a less risky way to expand.

Global Employer of Record

This is where a global Employer Of Record (EOR) comes in. This is a company that already has all the facilities you need to employee people in the new country. The global employer of record will handle all the regulatory, legal, tax and HR issues around hiring new staff for you. The global employer of record has already jumped through all the hoops and set up its own infrastructure to overcome the barriers.

The global employer of record will employ staff on your behalf. The company will pay them and delivery all the benefits that the employee is entitled to in that country. The global employer of record will also deliver any extra benefits that you have agreed with your new employee.

Some global employer of record companies will go further. They will virtually replace your HR department in the new country. They will find you talent to interview and give you software to manage the whole recruitment process.

Once you know that your business is going to really fly in your new market you can then go about setting up a subsidiary company.

Getting Help

Need advice on expanding out of Australia? Contact Fullstack or leading EOR organisation Globalization Partners for more details on how they can support your HR plan in 170 countries. You can also view our guide to setting up in the UK.

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Stuart Reynolds is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech & online companies.

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