Ever set foot into an unknown city and been stranded? It may sound venturesome, especially when you are a traveler with a thirst for adventure, but travel plans call for many decisions. Where to go, what to do, how much money to save, how to communicate in the local language and another question you should not neglect is: Should I book a tour package or travel alone?
The language, culture, and system differences can be confusing and overwhelming, especially if you’ve never traveled the world alone! To answer all this and for a hassle-free travel experience, choosing a tour package is the best to help you plan your end-to-end vacation more seamlessly.
Let’s understand the same use case in a global business context.
When an organization is en route to becoming a market leader, they elevate by tapping into newer markets and revenue streams. While growth is a common buzzword, further scrutiny of global expansion brings up the need to set up a local entity.
Global Expansion: An Inevitability in the Modern Business Landscape
Global expansion has become more of an imperative for businesses than a choice. However, setting up a new entity in a foreign country is complex and requires commitment and extensive planning. International expansion and operation are the prime challenges for most companies, so choosing a suitable strategic alternative becomes a make-or-break game for the organization. Any typical multinational organization with a determined roadmap and long-term goals to expand their business recognizes their best and optimal solution as the ‘establishment of a new legal entity’.
However, is it as easy as it sounds? The real challenge comes into play when factors like company law, employment law, compliance, and regulatory frameworks surface. When organizations want to test a potential market or understand the market pulse of geography and explore opportunities, the most cost-effective, quick, and safe way to expand the business and hire employees is by choosing an Employer of Record (EOR) provider.
While we delve deeper into this topic, let’s start with the primary comparison between establishing an entity and considering an EOR provider.
When organizations actively plan for international expansion, the factors that become the most prominent barriers are regulatory/legal compliance (56%), tax structure (46%), and human capital/talent (38%), says a CFOTech report.
The primary reason behind this extensive research and cautiousness is the complexity involved in this process. The set-up of a successful legal entity in new geography requires hassle-free planning, research, risk, and impeccable compliance documents. The hoops to jump and challenges to navigate are often overwhelming, even for experienced executives.
How does Employer of Record work in Global Expansion?
The most preferred option is usually choosing an Employer of Record solution. The EOR solution allows companies to smoothly navigate into new markets by assisting with Human resources, onboarding, legal compliances, and paperwork. It becomes an instant hero by expediting the entire process and eliminating cost and time risks.
Innovation is the primary driver enabling businesses to gain a competitive edge in the industry. Especially after the pandemic scenario and brief hiatus, organizations haven’t shied away from expansion.
According to NelsonHall, despite the pandemic, organizations are increasingly reaching out to EOR providers– to improve and enhance their expansion efforts.
Why opt for EOR Solution?
– A handful of hurdles, including setting-up costs, understanding the new geography, and cultural differences, arise when organizations set foot into expansion. The burden of employment, payroll, and work permit requirements for non-resident companies has become an overarching encounter.
– Branching into a new territory also involves launching the product and providing services in a new language. It becomes essential for the organization to be conscious of the cultural norms of the new geography.
– While the post-COVID market situation is the perfect opportunity to grow, setting up a legal entity in foreign geography is more complex due to travel restrictions and closed borders.
– Despite having experienced resources and sufficient funds, completing this lengthy process will be time-consuming and costly.
After exposure to this tedious journey, organizations usually hold back or become skeptical about expansion plans. Organizations look for a hassle-free option to eliminate this wearisome approach, and automatically EOR becomes the preferred solution.
Benefits of EOR solution
– It helps to break all the barriers through a smooth transition. It covers legal regulations, tax regulations, unfamiliar cultural norms, and compliance in every single aspect.
– It is trustworthy and efficient enough to operate in multiple countries simultaneously.
– It provides a lot of flexibility in operation, especially for organizations that are growing and trying to test the waters in new areas.
– Additionally, it helps in embracing the local talent by ensuring familiarity and making them more productive.
Hence, EOR is a viable option to enable business expansions for established and growing companies. They help organizations seamlessly navigate through the process and explore new growth opportunities. The adaptive technology and compliance assurance allow organizations to embark on experiential on-sets. Embracing this solution helps the organization by creating significant ROI and sustainable growth.
Suppose you are looking for a local guide to manage your global employment experience. In that case, Neeyamo can help you hire employees without taking on the risks of entity set-up or independent contractors. Hop on board, and we’ll make it easier for you to expand into international markets in the safest manner and help you generate revenue instantly!
Get in touch with us via firstname.lastname@example.org.