Economies all over the world have taken a heavy hit due to the COVID-19 Pandemic. This has resulted in many businesses needing to revisit their budget plans and expansion strategies to save as much cost as possible, while also ensuring that their business model is efficient. While this means plans for overseas expansions have slowed, they have not stopped completely. Businesses everywhere are turning to EOR services in order to get their foot through the door overseas, as they are still able to save on costs while doing so. If you’re interested to find out more about how an EOR can benefit your business, read on to find out more.
What Exactly is an EOR?
For starters, EOR stands for Employer of Record. In the most basic terms, they are services that help businesses with overseas deployment. Under an EOR service, a business will not have to legally set up an entity in the country whereby the employee resides. A service provider legally employs staff on behalf of your company, and transfers them to you under a service agreement. This allows businesses to hire staff almost immediately to help perform your business operations. For businesses looking to quickly expand overseas, this is an efficient and cost-effective method. We have compiled a list of some of the top benefits of engaging an EOR for business expansion, read on to find out more.
Fast Market Entry
We’re all too familiar with the phrase “time is money”. And for businesses regardless of their purpose and background, this is very true. The traditional process of overseas expansion for businesses involves first establishing an entity in the desired location. Not only can this be costly, it also requires plenty of paperwork and processing which ultimately results in the procedure being time-consuming and troublesome as well. As an EOR takes care of the hiring process for you in your desired country, this completely eliminates the need to set up an entity in order to enter the market. This reduces the time needed for business expansion from months or sometimes even years, to just a matter of weeks.
“Look before you leap” applies for many things, and that includes business expansion. Overseas expansion can be very risky for businesses, especially since setting up overseas entities is usually very costly. If plans fall through, and a business has to withdraw from the country, this will cost them plenty of money and time. However, as an EOR does not require one to set up a local entity, businesses can test the waters first before making big financial commitments such as setting up a store or office. This severely minimises the risk of causing serious financial damage to the business should plans of expansion fall through.
Laws and regulations regarding employee rights, payroll and taxes are different in every country. For this reason, it can be troublesome and confusing to keep up-to-date with these, especially during overseas expansions. However, overlooking these can result in a lot of legal trouble for a business, which can both be costly and damaging to one’s reputation. A professional EOR ensures that their clients are fully compliant with the laws and regulations of the country they are entering.
Looking to Expand Your Business?
As we begin to see the light at the end of the tunnel that is the COVID-19 Pandemic, many businesses have started thinking of business expansion again. However, it is still important for many to save costs. An EOR not only helps with that, but ensures compliance and a minimised-risk market entry.