Are Contractors The Way to Bliss or Bust?
Despite the current economic climate there is no shortage of companies seeking to sell their products and
services in to the International market. Since the turn of the year, we have seen a resurgence of interest in driving
sales activity in the EMEA region and companies seek to achieve this by putting a small number of feet on the
street in one or more countries. However, many companies are taking significant risks in the interests of saving
money by engaging contractors as opposed to employees.
The `test' to determine if a relationship is one of employment or of independence is similar throughout the world.
In general terms an individual is self employed if they are in business on their own account and bear the
responsibility for the success or failure of that business. Equally, an individual is employed where they personally
work under the control of someone and do not run the risks of having a business for themselves.
The risks of your contractor being deemed an employee include the potential for the `employer' to be liable for
backdated holiday, sick pay, social security, overtime and depending on the circumstances under which the
relationship was discovered, also unfair dismissal. In addition to these employment related risks, it is possible
that the company might also be deemed to have a p
ermanent establishment in the country in which the
contractor resides, potentially exposing the revenues of the `employer' (the parent company) to the vagaries of
the foreign tax authorities.
All these can be significantly more expensive than the costs associated with getting it right first time. It doesn't
pay to pick the wrong partner when dealing with key areas like HR, Payroll, Finance, i nternational accounting ,
Compliance, i ntercompany transfer pricing etc.
It is therefore very essential to team up with an expert. A professional has the necessary expertise to differentiate
between situations or terms that can pose a challenge to a newbie entrepreneur. Once you are associated with the
right counselor there is no stopping your company i nternational expansion from transforming into a successful
It is not a very pleasant journey when you try to explore the unknown without seeking the assistance of experts.
Achieving success in international expansion requires diligence and strategy. Those who have gained enormous
experience in this field can provide you with sound advice to navigate safely along the route. The invaluable
expertise can save you from incurring costs and suffering losses, and by devoting time to select the right partner
you can be assured of guaranteed returns.
Get more information about - regulatory filings , e xpatriate tax advice