Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Hiring, Paying and Retaining Employees across the Globe: Compliance & Best Practices

Learning Objectives

After participating in this event you will be able to:• Discover key tactics to acquire and engage talent

for international operations

• Understand how to mitigate key operational risk exposures when expanding across borders

• Understand key issues and trends in multinational payroll

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Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Hiring, Paying and Retaining Employees across the Globe: Compliance & Best PracticesKatie Davies, Senior Director, Advisory, High Street Partners

Company Structure Considerations

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Why does company structure matter? Legal presence indicates commitment to market &

creates commercial footprint which assists in the hiring and retention of employees

Dictates the required registrations and timeline for set up, which in turn dictates speed of hire

Employee benefits can be impacted country to country In France, having a NRE can restrict the number of

providers offering coverage In the U.K., not having a local bank account will limit

the number of providers able to provide coverage

Company structure can dictate elements of your benefits plan

Company Structure Considerations

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Payroll only vs. entity setup: Are you at permanent establishment risk? PE is created by any business activity that generates revenue

in a country or contributes to group entity revenue Local tax authorities will generally assess corporate tax on a

deemed revenue arising in-country

Common entity types: Representative office: Minimal presence, low risks Branch office: Extension of a U.S. company, no legal

protection, may be subject to taxation in U.S. Subsidiary: Separate legal entity, more complicated setup

International staffing profile

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Consider staffing profile :

• Local employees• Expatriate employees• Contractors

Employees (expat and locals) will require local payroll and reporting compensation in local currency

If expatriate : Immigration / Visas requirements must be considered and plan well in advance for associated timelines for applications as well as wider expatriate tax planning and compensation structuring.

Genuine contractor v employee – are they a bona fide contractor ?

Local Hire Employees:

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Don’t make the mistake of assuming that your U.S. employment and benefit practices will work in other countries

Each country has unique rules and regulations to consider

Failure to follow best practices may result in dissatisfied employees

Remember: Everything will be different overseas

Sample U.S. Offer Letter

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Dear Jane Doe, On behalf of XYZ INC. (the “Company”), I am pleased to confirm our offer of employment to you for the position of EMEA Regional Sales Director …You will be paid a base salary of $5,000 per month less applicable tax and other withholdings.

You will also be eligible to participate in various Company fringe benefit plans, including group insurance and 401(k) programs. You will also be eligible for fifteen (15) days of paid time off (PTO) each year. Subject to the approval of the Company’s Board of Directors, you will be granted an option to purchase X shares of Company common stock….

Your employment with the Company is “at will.” It is for no specified term and may be terminated by you or the Company at any time, with or without cause or advance notice…

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Hiring, Paying and Retaining Employees across the Globe: Compliance & Best Practices

© 2013 Proformative. Proprietary and confidential

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