International PEO services explained – Pros & cons, alternatives, costs & how-to

Last checked and updated on 7 April 2022

If you’re looking to expand your business into new markets, you may be considering using a PEO service to employ people in other countries. But what is PEO? What are the pros and cons of using a PEO service? What are the compliance issues? And how do you choose an international PEO services provider?

In this guide, we will answer all of these questions and more. We’ll also discuss how much it costs to use a global PEO services provider, and what features to look for when making your decision.

What is international PEO?

PEO stands for Professional Employer Organization, and it is a company that provides HR services to businesses. PEOs are also sometimes called Employer of Record (EOR) companies. A PEO can help your business expand into new markets by hiring employees in other countries on your behalf. The PEO will be responsible for compliance with local employment laws, and will handle payroll, benefits, and other HR functions for your employees.

The benefits of using PEO to hire employees in other countries

There are many benefits to using a PEO service, including the following:

  • You can focus on running your business, while the PEO takes care of HR compliance issues.
  • You can avoid the hassle and expense of setting up your own HR infrastructure in another country.
  • You can quickly and easily hire employees in another country, without having to go through the process of setting up a subsidiary or branch office.

The downsides to using international PEO

However, there are also some potential drawbacks to using a PEO service:

  • You will be giving up some control over your employees to the PEO.
  • You will be responsible for the PEO’s fees, which can be expensive.
  • There is a risk that the PEO could mismanage your employees or violate their rights.

Is local entity setup required with a PEO solution?

No, you will not need to set up a local entity when using a PEO service. The PEO will act as the employer of record for your employees. This means that they will be responsible for compliance with local employment laws.

How to choose a global PEO services provider

When choosing a global PEO services provider, it is important to consider the following factors:

  • The provider’s experience and reputation. Make sure the provider has a good track record and is well-respected in the industry.
  • The provider’s financial stability. Make sure the provider is financially stable and will be able to meet its obligations to you and your employees.
  • The provider’s compliance record. Make sure the provider has a good compliance record and is up-to-date on all relevant employment laws.
  • The provider’s customer service. Make sure the provider has a good customer service team that is responsive to your needs.

Cost of international PEO / EOR

The cost of using a global PEO services provider will vary depending on the size and location of your business, as well as the number of employees you plan to hire. Typically, fees range from $500 to $5000 per month, plus a one-time setup fee.

What are the alternatives to international PEO?

If you’re expanding your business into new markets, you have a few options for how to employ people in other countries. You can choose to run your own international payroll, use a local employment agency, or hire employees through an international PEO service.

Each option has its own set of pros and cons. Running your own payroll can be costly and time-consuming. Hiring through a local employment agency can be less expensive, but you may not have as much control over the hiring process. And using an international PEO service can be more expensive than other options, but it can provide peace of mind knowing that your PEO is compliant with all relevant employment laws.

No matter which option you choose, be sure to do your research and choose a reputable provider.

International PEO services – features to look for in a provider

When looking for a global PEO services provider, be sure to ask about the following features:

  • The ability to customise the service to meet your specific needs.
  • A dedicated account manager who will be responsible for handling your account.
  • A robust compliance team that can help you stay compliant with local employment laws.
  • A customer service team that is responsive to your needs.

Is international PEO better than running your own payroll in other countries?

The answer to this question depends on your specific situation. If you are expanding your business into multiple countries, it may be more efficient and cost-effective to use a PEO service. However, if you are only hiring employees in one country, you may be able to save money by running your own payroll.

If you choose to run your own international payroll, you will be responsible for compliance with local employment laws and withholding taxes. You will also need to set up your own HR infrastructure in each country where you have employees. This can be a costly and time-consuming process.

International PEO can be a great solution for businesses expanding into new markets. But be sure to do your research and choose a reputable provider. And remember, the cost of using a PEO service will vary depending on your needs. With the right provider, you can focus on running your business while the PEO takes care of HR compliance issues.

What are the potential compliance issues?

When using a PEO service, you will be responsible for the PEO’s compliance with local employment laws. This means that you need to make sure the PEO is up-to-date on all relevant laws and regulations. Failure to comply with local employment laws can result in significant fines and penalties.

What benefits can you offer employees under a foreign PEO arrangement?

PEOs can offer a wide range of benefits to employees, including health insurance, retirement savings plans, and paid time off. By using a PEO service, you can provide your employees with the same benefits they would receive if they were employed directly by your company.

Step by step guide to working with an international PEO provider for the first time

If you’ve never worked with a PEO before, the process can seem daunting. But don’t worry, we’re here to help. Here’s a step-by-step guide to working with an international PEO provider:

How to work with an international PEO service provider

  1. Research different providers and identify the one that best meets your needs

    When you’re looking for a global PEO services provider, it’s important to do your research and choose a reputable provider. Be sure to ask about the provider’s compliance record, customer service, and ability to customise the service to meet your specific needs.

  2. Get in touch with the provider and discuss your specific needs

    Once you’ve chosen a provider, the next step is to get in touch with them and discuss your specific needs. Be sure to ask about the provider’s compliance record, customer service, and ability to customise the service to meet your specific needs.

  3. Sign a contract with the PEO

    Once you’ve chosen a provider and discussed your specific needs, the next step is to sign a contract with the PEO. This contract will outline the terms of your agreement, including the services the PEO will provide, the fees you will pay, and any compliance responsibilities you have.

  4. The PEO will handle all the compliance issues and set up your HR infrastructure in the new country

    Once you’ve signed the contract, the PEO will handle all the compliance issues and set up your HR infrastructure in the new country. This includes ensuring that the PEO is up-to-date on all relevant laws and regulations, setting up payroll, and providing benefits to employees.

  5. You will focus on running your business while the PEO takes care of HR compliance

    Once the PEO has set up your HR infrastructure in the new country, you will be able to focus on running your business while the PEO takes care of HR compliance. This includes ensuring that the PEO is up-to-date on all relevant laws and regulations, managing payroll, and providing benefits to employees.

International PEO companies compared – our top 5

Now that you know what to look for in a PEO service, here are our top picks:

UnaTerra

UnaTerra is a global PEO service provider with over 15 years of experience. They offer a wide range of services, including HR, payroll, and compliance. UnaTerra has a team of experts who can help you navigate the complexities of employment law in different countries.

Papaya Global

Papaya Global is a cloud-based PEO service provider. They offer a wide range of services, including payroll, benefits, and compliance. Papaya Global has a team of experts who can help you expand your business into new markets.

Globalization Partners

Globalization Partners is a company that helps businesses expand into new markets around the world. Globalization Partners is headquartered in Boston, Massachusetts, with offices in San Francisco, London, and Dubai. The company has a team of over 100 employees who are experts in global expansion, taxation, and compliance. Globalization Partners has helped businesses expand into over 50 countries around the world.

Velocity Global

If you’re considering expanding your business internationally, Velocity Global is a great option. They offer a comprehensive suite of services to help businesses expand globally, including consulting, market entry strategy, and more.

Safeguard Global

Safeguard Global is a business expansion company that helps businesses enter new markets and grow their operations globally. They offer a comprehensive suite of services that includes market entry strategy, cross-border M&A, business incubation, and more. Their team has a wealth of experience and knowledge in international business, and are dedicated to helping clients succeed in the global marketplace.

Frequently asked questions about international PEO / EOR services

Still have questions about international PEO services? Here are some of the most frequently asked questions:

What is an international PEO / EOR service?

International PEO / EOR services are provided by a company that acts as your employer in another country. The PEO will handle all HR compliance issues, set up your payroll, and provide benefits to employees.

What are the benefits of using an international PEO / EOR service?

International PEO / EOR services can save you time and money by simplifying the process of expanding your business into new markets. The PEO will handle all HR compliance issues, set up your payroll, and provide benefits to employees.

What are the compliance issues associated with international PEO / EOR services?

International PEO / EOR services are subject to the same compliance regulations as any other employer. The PEO will need to be up-to-date on all relevant laws and regulations, set up payroll, and provide benefits to employees.

How much do international PEO / EOR services cost?

International PEO / EOR services typically charge a monthly fee, plus a per-employee fee. The exact cost will depend on the services you require and the number of employees you have.

How do I choose an international PEO / EOR service provider?

When choosing an international PEO / EOR service provider, you should consider the size of your company, the services you need, and the countries you want to expand into. You should also review the provider’s track record and customer reviews.

What features should I look for in an international PEO / EOR service provider?

When choosing an international PEO / EOR service provider, you should look for a company with experience in your industry and the ability to scale up as your business grows. You should also review the provider’s track record and customer reviews.

Important – The information provided in our articles is intended to be for general purpose use only, and not advice for you or your business. We strive to publish accurate information, but encourage you to fact-check and seek expert guidance. We recommend that you always speak to a qualified professional to get advice about how to operate your business under your specific requirements and circumstances.