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What is an International PEO? Guide for Global Businesses

What is an International PEO? Guide for Global Businesses

An International PEO is introduced in the employment world to ease the global hiring process. This can be especially applicable to businesses trying to expand internationally. International PEO is not a co-employment of international employees. It is a service similar to an employer of record service (EOR).  

An International PEO is utilized to onboard resources without having an entity in a foreign country. It helps businesses set up a fully functional and legally thorough international remote team. The catch here is the company is not required to set up an entity in the hiring country.

Let us take a closer look at how an International PEO actually works and the other related factors. We’ll discuss the difference between an International PEO and other closely linked employment models. We’ll help you get a clear picture of the requirements to collaborate with them. This blog also aims to explain the benefits of collaborating with them and how to build a dream team with their help.  

What is an International PEO?

International PEO is an employment service that helps companies with the compliant hiring of international candidates. They source candidates from anywhere around the globe without setting up a legal entity in the hiring country. It saves companies from HR and legal hassles involved in the recruitment and maintenance of international candidates. 

An International PEO manages complex processes like international payroll plus onboarding and offboarding of the candidates. It deals with conflicting local labor laws of the hiring country, employee engagement, employee retention, etc.

The HR tasks can often be finicky especially when a business is dealing with international candidates. In such cases, employers have to be particularly expert in handling individual HR issues all by themselves. 

Employers may find themselves in the middle of nowhere with this humongous responsibility and miss out on stellar candidates. Fortunately enough, there is an employment model (International PEO) at hand to save the day. It holds an expertise that will easily eradicate the operational conundrum. It also makes these tasks rudimentary in the global expansion process of a company’s workforce. 

This legal employer comes in handy for a company’s global workforce along with all the compliance and administrative heavy lifting. It helps manage employee benefits, contracts, and taxes at a very cost-effective budget. The International PEO employment service is however frequently confused with other interconnected employment services. This involves global PEO, domestic PEO, and global employer of record (EOR). 

There is a thin line between these three-letter employment acronyms in spite of being closely related. It is clear by now that all of them are responsible for hiring and managing an organization’s workforce. However, the terms and conditions for each model vary largely from one another.      

Learn more about international PEO

International PEO vs. PEO

International PEO
PEO

International PEO has its roots in a PEO and acts as the sole legal employer for your business.

Traditional PEOs are the domestic version of the model. Traditional PEOs do not act as the sole legal employer for your business.

An International PEO model is associated with hiring international candidates or handling their employment contracts.

Traditional PEO is a co-employment model that takes care of the outsourced human resource services for the local workforce.

An International PEO caters to businesses aspiring to build and manage an international remote team.

A PEO is solely responsible for managing the payroll, health benefits, onboarding, and other administrative tasks for local employees.

With an International PEO, there is no need to have a legal entity in another country as it acts as the legal employer for your team and is responsible for all compliance matters.

Collaborating with a PEO does not change the employment dynamics of your local teams. You are still the legal employer for all your hires with shared compliance risks and responsibilities with the PEO.

International PEO

PEO

International PEO has its roots in a PEO and acts as the sole legal employer for your business.

Traditional PEOs are the domestic version of the model. Traditional PEOs do not act as the sole legal employer for your business.

An International PEO model is associated with hiring international candidates or handling their employment contracts.

Traditional PEO is a co-employment model that takes care of the outsourced human resource services for the local workforce.

An International PEO caters to businesses aspiring to build and manage an international remote team.

A PEO is solely responsible for managing the payroll, health benefits, onboarding, and other administrative tasks for local employees.

With an International PEO, there is no need to have a legal entity in another country as it acts as the legal employer for your team and is responsible for all compliance matters.

Collaborating with a PEO does not change the employment dynamics of your local teams. You are still the legal employer for all your hires with shared compliance risks and responsibilities with the PEO.

International PEO vs. Employer of Record (EOR)

International PEO
PEO

International PEO offers similar solutions as an employer of record (EOR) to businesses expanding internationally. 

Employer of record (EOR) has similar terms and conditions on the working models as an International PEO.

International PEOs are focused on hiring and onboarding international employees while managing payroll and benefits for the hired employees.

Employer of record (EOR) provides you with some added assistance like IT and infrastructure support, customised employee documentation, etc.

The terms International PEO and employer of record (EOR) are synonyms in their literal meaning and are often used interchangeably.

Employer of record (EOR) is a more popular and commonly used terminology.

International PEO

PEO

International PEO offers similar solutions as an employer of record (EOR) to businesses expanding internationally.

Employer of record (EOR) has similar terms and conditions on the working models as an International PEO.

 

International PEOs are focused on hiring and onboarding international employees while managing payroll and benefits for the hired employees.

Employer of record (EOR) provides you with some added assistance like IT and infrastructure support, customised employee documentation, etc.

The terms International PEO and employer of record (EOR) are synonyms in their literal meaning and are often used interchangeably.

Employer of record (EOR) is a more popular and commonly used terminology.

Know More: PEO Vs EOR: Which is Right for Your Organization?

Know more about PEO vs EOR vs International PEO  

What Do International PEO Companies Do?

International PEO companies help businesses explore new opportunities in emerging global markets. They do so by assisting them with a full spectrum of services. International PEO services support businesses in expanding their workforce without any geographical constraints. They help the businesses abide by all foreign laws and regulations. 

They manage the entire legal payroll on a company’s behalf. This involves international taxes, timely salaries for employees, and miscellaneous financial liabilities for international employees. Even a slight negligence of the payroll system can lead a business to reputational damage. In worst-case scenarios to potential compliance risk but International PEO cover it all for it. 

The core essence of partnering with International PEO company is that they become the heart and soul of the human resources of a business. International PEOs save time and money in the business expansion process. International PEO company work in smarter and faster way than any other employment model. This is because of their vast network and strong hold on the international markets.

An International PEO has access to a diverse talent pool that is excellent at their jobs yet available at a very economical salary range. International PEO companies also save businesses from unnecessary legal fines. These fines can be due to non-compliance, on-time payment failures, or workers’ misclassification.

Benefits of International PEO Services

Let us elaborate on a few of the major benefits of International PEO services. This ranges from the large stack of benefits offered by them to growing businesses.

Benefits of International PEO Services

Speedy Expansion

It is very important to stay ahead of the competitors to have the early bird advantage while a business is testing international waters. However, complex and never-ending paperwork may slow things down for the business. International PEO services bring in the expertise required to speed up the process while staying compliant with all international laws and regulations.

Expertise in Local Laws

Local employment laws can be more complex than ever and only experts doing full-time jobs can handle such catastrophic processes without any loopholes. It is almost impossible to gain knowledge about such vast labor laws of a foreign land, let alone to execute them properly.

Non-adherence to such laws can cause a company heavy penalties and even ban it from doing business in that country. An International PEO company shields it from all such unpleasant circumstances and keeps the business fully compliant with international legal codes.

Budget-friendly Process

Building a workforce from scratch in another country mostly gets heavy on the pockets as there are multiple investments and hidden costs associated with it. The expenses typically involve recruitment cycle costs, the cost of onboarding highly qualified professionals into the team, employee training expenses, employee benefits expenses, tax equalization expenses, etc. An International PEO company reduces expenses through efficient management of employee-related operations.

End-to-end Support on HR Operations:

International PEO services take the entire responsibility that a full-house HR team of any organization would have taken. It covers HR functions like international payroll solutions, employee engagement, employee training, taxes, and employee retention among others. The monstrous amount of time and burden that an International PEO company takes off the shoulders frees a company up to focus on other analytical business services.

Access to a Large Talent Pool

When building a remote workforce with highly qualified professionals from a new location, there is no better formula than leaving it up to the global hiring experts. International PEO services have a full hand on unique and exclusive candidates in the talent market.

They are called the talent hunters in the hiring world and rightly so. For example, Remunance has been serving more than 100 clients across 16 countries and has been building dream teams of global experts since its foundation.

International PEO Calendly
Benefits of Global Expansion with an International PEO

When to Use an International PEO?

Small and medium-sized businesses that are aiming to grow bigger can engage with an International PEO. They can potentially expand their teams in foreign locations with the help of an international PEO. It helps them access the less expensive talent pool outside their own country. International professional employer organizations are for those companies who plan to build a fully operational remote workforce internationally. They can expand easily without the hassles of setting up a legal entity in a new and unknown location. Additionally, International PEOs are also used for converting existing contractors or freelancers to permanent employment. Let us discuss the reasons for using an International PEO in detail.

  • Swift Entry and Exit in Global Markets

An International PEO acts as the perfect guide for organizations that have not planned a period of stay in the new location. It works best for those who are just experimenting with the business market. In such cases, investing in a legal entity financially and emotionally may feel premature. 

An International PEO allows a business to be less committed here and take on the operational responsibility in the new country. This way the business can enter the new market without much paperwork or legal hindrances. They can also exit the market as and when required if it does not work out for the business. 

Moreover, setting up a whole new entity in an international land can go over budget for some businesses. Many businesses become wary of the cost and time involved in the expansion process. This leads them to step back assuming undesirable consequences. An International PEO provides such businesses an opportunity to grow in an international market on a low budget.        

An International PEO acts as the perfect guide for organizations that have not planned a period of stay in the new location. It works best for those who are just experimenting with the business market. In such cases, investing in a legal entity financially and emotionally may feel premature. 

An International PEO allows a business to be less committed here and take on the operational responsibility in the new country. This way the business can enter the new market without much paperwork or legal hindrances. They can also exit the market as and when required if it does not work out for the business. 

Moreover, setting up a whole new entity in an international land can go over budget for some businesses. Many businesses become wary of the cost and time involved in the expansion process. This leads them to step back assuming undesirable consequences. An International PEO provides such businesses an opportunity to grow in an international market on a low budget.        

  • Recruit Top Talent and Set Up Entity Simultaneously  

Sometimes businesses, on their way to establishing an entity internationally halt the entire process due to compliance risks. Additionally, they need to focus on the entity build-up process as it is a full-time and complex job per se. 

An International PEO partner, being aware of the nuts and bolts of local business laws eliminates all the compliance risks. It helps a company to continue with the recruitment process coherently. An International Professional Employer Organization also has a strong grip on the local talent market. This speeds up an organization’s recruitment process. Also, highly qualified professionals are onboarded into the team. 

International PEO also takes care of the employees’ day-to-day necessities. It keeps them engaged through multiple training activities.  Thus, collaborating with an IPEO during the legal establishment period helps the organization with a smooth transition. It protects the businesses from unfaltering operations. An International PEO handles the entire recruitment process of the company’s international team. Thus, the company does not have to worry about intricate details. They can focus on the core operations of the business. 

Sometimes businesses, on their way to establishing an entity internationally halt the entire process due to compliance risks. Additionally, they need to focus on the entity build-up process as it is a full-time and complex job per se. 

An International PEO partner, being aware of the nuts and bolts of local business laws eliminates all the compliance risks. It helps a company to continue with the recruitment process coherently. An International Professional Employer Organization also has a strong grip on the local talent market. This speeds up an organization’s recruitment process. Also, highly qualified professionals are onboarded into the team. 

International PEO also takes care of the employees’ day-to-day necessities. It keeps them engaged through multiple training activities.  Thus, collaborating with an IPEO during the legal establishment period helps the organization with a smooth transition. It protects the businesses from unfaltering operations. An International PEO handles the entire recruitment process of the company’s international team. Thus, the company does not have to worry about intricate details. They can focus on the core operations of the business.

Add Right Talent at Reduce Cost With Indian PEO

Add top talent at reduced cost
  • Engage and Retain Employees Beyond Geographical Constraints

An International PEO partner hires the best talent for a remote team. It also successfully engages and retains the hired employees. It taps into highly skilled professionals and adopts best-in-class employee training programs. It arranges for employee benefits programs, wellness programs, and other engagement programs. This keeps the employees happy and ensures the job satisfaction of each individual in the team. 

Remote jobs can be monotonous at times and remote employees need extra attention to keep up the same level of enthusiasm. It might get difficult at times to maintain motivation and emotional engagement among employees. This is especially challenging when they are from different cultures. 

An International PEO can mitigate these cultural barriers and amplify the productivity levels of a remote team. An IPEO researches and arranges customized training and skill-based programs for the employees. The programs are specific to the requirements of their job profiles.    

An International PEO partner hires the best talent for a remote team. It also successfully engages and retains the hired employees. It taps into highly skilled professionals and adopts best-in-class employee training programs. It arranges for employee benefits programs, wellness programs, and other engagement programs. This keeps the employees happy and ensures the job satisfaction of each individual in the team. 

Remote jobs can be monotonous at times and remote employees need extra attention to keep up the same level of enthusiasm. It might get difficult at times to maintain motivation and emotional engagement among employees. This is especially challenging when they are from different cultures. 

An International PEO can mitigate these cultural barriers and amplify the productivity levels of a remote team. An IPEO researches and arranges customized training and skill-based programs for the employees. The programs are specific to the requirements of their job profiles.    

Get a Complete Guide on International PEO
Get a complete guide on International PEO
  • Convert Independent Contractors to Full-time Employees

Companies that are expanding internationally often tend to hire independent contractors for specific projects. These hiring contracts are short-term and can save up money and logistical hassles in hiring full-time employees. However, this hiring model has more cons than pros. One classic example is worker misclassification. It can endanger the company to heavy legal penalties and monetary loss through large fines. 

Full-time employees are also more committed to their work as well as loyal to the company. Independent contractors on the other hand always try to have some extra income by moonlighting. They can do so as there are no specific legal agreements on their hiring contracts. Hence, it is always better to have a team of full-time and permanent employees for an organization. This approach is way better than having independent contractors working for it. 

An IPEO assists the organization in converting independent contractors into full-time hires. They supervise worker classification and curate compliant employment contracts for new hires.   

Companies that are expanding internationally often tend to hire independent contractors for specific projects. These hiring contracts are short-term and can save up money and logistical hassles in hiring full-time employees. However, this hiring model has more cons than pros. One classic example is worker misclassification. It can endanger the company to heavy legal penalties and monetary loss through large fines. 

Full-time employees are also more committed to their work as well as loyal to the company. Independent contractors on the other hand always try to have some extra income by moonlighting. They can do so as there are no specific legal agreements on their hiring contracts. Hence, it is always better to have a team of full-time and permanent employees for an organization. This approach is way better than having independent contractors working for it. 

An IPEO assists the organization in converting independent contractors into full-time hires. They supervise worker classification and curate compliant employment contracts for new hires.   

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  • Accelerate Transactions Across Borders

An International PEO assists a business with all kinds of cross-border transactions. The transactions can be monetary or non-monetary. There are multiple transactions involved in the business expansion process. Some of them are employee salary, employee bonuses, new-hire documentation, etc. They also include service level agreements, and IT and infrastructure. Each employee should be supported with the required amenities while building a remote team. This will help them to work effortlessly from home.

An International PEO partner aids a business with just that. They generate offer letters for employees, crafting smooth payroll for each one of them. They also conduct onboarding and induction programs for new hires. Additionally, an IPEO provides them with IT support including all the necessary tools and software. They make sure of efficient connectivity platforms across the teams, etc. 

There are other legal and regulatory transactions as well that an International PEO partner accommodates a business with. An IPEO verifies all the transactional processes and quickly amends any stagnant dealings if any. 

An International PEO assists a business with all kinds of cross-border transactions. The transactions can be monetary or non-monetary. There are multiple transactions involved in the business expansion process. Some of them are employee salary, employee bonuses, new-hire documentation, etc. They also include service level agreements, and IT and infrastructure. Each employee should be supported with the required amenities while building a remote team. This will help them to work effortlessly from home.

An International PEO partner aids a business with just that. They generate offer letters for employees, crafting smooth payroll for each one of them. They also conduct onboarding and induction programs for new hires. Additionally, an IPEO provides them with IT support including all the necessary tools and software. They make sure of efficient connectivity platforms across the teams, etc. 

There are other legal and regulatory transactions as well that an International PEO partner accommodates a business with. An IPEO verifies all the transactional processes and quickly amends any stagnant dealings if any.

How Do You Select an International PEO Company?

How Do You Select an International PEO Company?

Selecting an International PEO company for your business is one of the most crucial aspects of the expansion process. You might want to ask all the right questions and get to know your potential International PEO partner thoroughly. 

An International PEO needs to have a proven track record in this business. It should check all the boxes of being a full-fledged support system for an organization. Let us have a detailed observation of the factors that truly matter when choosing an International PEO partner.    

An International PEO needs to have a proven track record in this business. It should check all the boxes of being a full-fledged support system for an organization. Let us have a detailed observation of the factors that truly matter when choosing an International PEO partner.       

 Transparency in fee structure:

 Before signing any contract, it is significant to ask them for a detailed pricing structure. It is crucial to know if there are any hidden costs associated with their services.

Network and experience in the global market:

The industry experience and industry reach speak a lot about the capability. The competency of an International PEO decides how good they are in delivering quality HR solutions.

Reputation and client feedback:

Ask for customer testimonials and case studies of previous work. An international PEO must be in a position to provide these details before finalizing a deal. Also, look out for the market reputation of the concerned International PEO and what others have to say about it.

Response time and support services:

Check whether the International PEO has a prompt response time. Also, see if they have a holistic approach toward support services. Check out how Remunance is known for its prompt response time within 2 business days or less and 360-degree support services for all its clients.

Legal track record:

Ensure that the International PEO has a clean legal track record. Check if it is free from any complex legal liabilities that may otherwise affect your business operations in the long term.

Data security and confidentiality:

Ensure that the chosen International PEO handles sensible data carefully. Check if it has solid data protection and encryption policies to avoid any data leakage. Check its reliability on factors like data transmission, data storage, firewall protection, and regular security audits.

Know more: How to Choose the Right PEO Partner?

How to Choose the Right PEO Partner?

Build Your Dream Team With International PEO

Build Your Dream Team With International PEO

International PEO solutions can be a torch bearer for all small and medium-sized businesses. Especially for those planning to build a dream team internationally. In the present scenario, a competitive market has become the talk of the hour. Hence, a team expansion strategy can come into your business plan at any time. 

Onboarding talented professionals globally and building a dream team is like hitting a home run. You have to be fully equipped for such crucial situations while entering the talent market. Expanding a business internationally and building a new workforce poses a whole lot of challenges. However, it comes with a lot of opportunities as well to explore. After all, building revised strategies to sustain in a new global market is no joke. 

HR and administrative functions should be the least of your worries amidst all the operational and business dilemmas. They simply occupy a fair amount of space in your busy schedules. Hence, an IPEO adds global experts to your team and safeguards you from any legal liabilities. It makes sure to take care of the entire employee lifecycle of your international workforce. Thus, the International PEO solution is just the right fit for your business expansion plan.

Build remote teams with International PEO

International PEO: FAQs

Let us discuss some commonly asked questions regarding an International PEO.

The PEO in International PEO stands for professional employer organization which is responsible for providing businesses with HR and administrative support. It assists companies that are trying to explore international markets and build a remote workforce internationally. Partnering with an International PEO can make your business expansion process in a completely foreign location smooth and easy.

Yes, an International PEO provider will hire candidates for you. In fact, one of the main services an International PEO provides is to tap into the international talent market and onboard highly skilled professionals into your team. Due to their vast network, they get hold of unique and cost-effective candidates who will be a great value addition to your remote team. 

An International PEO guides and assists small and medium-sized businesses that are planning to expand in a new country with multiple support services. It includes the entire employee lifecycle, from recruitment of highly qualified candidates to onboarding them, handling the international payroll system, arranging training modules, providing proper IT support, and employee engagement programs to mitigate any compliance risks associated with the business.   

Using International PEO is better than paying contractors any day because independent contractors are far less committed to their work and are often not loyal to your business. This may affect the productivity levels of your business terribly. Additionally, there is a huge risk of worker misclassification with independent contractors which can lead to severe penalties. You can avoid all these complex issues by hiring full-time candidates through an International PEO. 

 

Yes, an International PEO partner takes care of the entire tax filing systems of the hired employees on your behalf. A trustworthy International PEO calculates employee taxes and compliantly pays them according to local labor laws.  

Businesses that do not want to establish a legal entity in a new country and yet aspire to build a fully functional remote team in that country should opt for an International PEO. In this way, you can focus on growing your business without any geographical limitations or legal liabilities.

Offboarding charges depend on the International PEO you are partnering with. Most International PEOs have onboarding charges per employee and only ask for a fixed notice period from the employees but do not cost anything for offboarding any employee.

Both International PEO and EOR provide almost similar solutions to businesses and work on the same terms and conditions. The only difference between them is that an EOR offers some extra services to clients such as IT and infrastructure support, customized employee documentation, etc. The terms International PEO and EOR are often used interchangeably.  

Curate Your Creative Team With Our Experts

Get in touch with our team to get detailed insights about Remunance’s International PEO services and how it manages end-to-end HR functions along with providing 360-degree support for your international remote team—from recruitment to payroll.

Get in touch with our team to get detailed insights about Remunance’s International PEO services and how it manages end-to-end HR functions along with providing 360-degree support for your international remote team—from recruitment to payroll.

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Rajendra Vaidya

Rajendra Vaidya is the CEO and founder of Remunance Group, a leading provider of Employer of Record (EOR) services. A serial entrepreneur with over 40 years in technology, outsourcing, and HR services, he has a strong record of scaling businesses and driving growth. Known for his strategic vision and operational expertise, Rajendra has led large projects and remote teams, ensuring seamless service delivery even in challenging times. He holds a Bachelor’s degree in Engineering and is an avid high-altitude mountaineer, having climbed peaks across the Himalayas, Africa, and Europe.

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