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
