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The Shieldgeo Solution

What is a GEO? 

A Global Employment Organization (GEO) provides outsourced employment services to companies who have staff in a country where they are unable to employ them directly. The GEO acts as the Employer of Record, becoming the in-country employer of the staff. The GEO holds all the necessary licenses, insurances and registrations to employ and payroll staff on behalf of foreign companies.

In essence, the GEO is the local expert in all things related to employing staff in a foreign country.

When an expanding company does not want the effort or cost of setting up a local entity themselves, a Global Employment Organization (GEO) provides them with a problem-free and cost-effective mechanism for a quick start. As the employer of record, the GEO becomes an unparalleled ally for human resource departments, taking administrative responsibility for employment and payroll functions, but leaving daily employee management to the client.

A Global Employment Organization provides a company with the opportunity to expand internationally in a cost efficient, rapid and secure manner, whether as a trial or for a more permanent business presence.

 

Global Employment Solutions Through Shield GEO 

An expanding company is often faced with the daunting task of setting up a new office in a foreign jurisdiction, and complying with all local laws and regulations.  However, there is an alternative to this approach, by using the global employment solution offered by Shield GEO.  The company that is expanding into the foreign market can use Shield GEO to employ and payroll their staff in a particular country.

Shield GEO then assumes the legal responsibility for these employees, sponsoring them on work permits (if required), complying with local employment law and running their monthly payroll.  This includes deducting all tax and social security contributions as required by local law.   This is a preferable alternative for companies who are looking to test a market, or simply want to control costs and have a quick start for expansion efforts.

 

Core Shield GEO Service Components 

The core services that we offer to our customers are in three primary areas:

  1. Payroll and Income Tax: All aspects of in country payroll are administered on behalf of the client, including tax and social security deductions.
  1. Work Permits and Immigration: Shield GEO sponsors work visas (when required) as the Employer of Record for client employees.
  1. Local Employment: In order to comply with local laws, employment contracts are required that cover statutory employee rights and employer obligations.

We combine our expertise in specific country rules and regulations with a solid background in managing global payrolls.  In essence, Shield GEO becomes the in-country HR administration for our clients in the new locality.

Structuring Employment Through Shield GEO 

There are 4 primary employment structures that Shield GEO provides:

 

Structure

Explanation

Pro

Con

Dual Employment

Employee is employed in home and host country simultaneously
  • Can run shadow payroll or split payroll
  • Continuity in home country employment (benefits, pension, length of tenure, etc)
  • Easy relocation back into home country regime
  • Job security for employee
  • Running shadow payroll
  • Expat taxed in two regimes
  • Possible permanent establishment in host country
  • Employee may have legal rights under both home and host country regulations in even of termination or repatriation

Outsourced Employee 1

Home country employment is paused / hibernated e.g. leave without pay
  • Continuity of home employment (length of tenure, stock options, etc)
  • Job security for employee
  • Employee has break in home country benefits
  • Potential tax issues in both countries
  • Possible permanent establishment in host country
  • Employee may have legal rights under both home and host country regulations in even of termination or repatriation

Outsourced Employee 2

Only employed in host country
  • Ease of administration
  • Taxed in host country
  • Host country laws apply
  • No benefits or continuity of service in home country
  • Maybe less appealing to employee
  • Possible permanent establishment in host country

Independent Contractor

Independent Contractor (IC) agreement between Client and Shield GEO. Individual is employed and payrolled in host country by Shield GEO
  • May reduce Permanent Establishment risk
  • Reduced compliance exposure
  • Employer maintains separation from individual
  • Unappealing for existing permanent employees
  • Employee has no continuity of service

 

How our Global Employment Solutions Work and Main Benefits 

Shield GEO has a network of experienced partners in 89 countries, giving clients a reliable and professional solution for their employment and payroll needs almost anywhere in the world.  Because Shield GEO takes responsibility for most administrative and legal functions, there are three main advantages for the client:

  • Reduced cost for expanding into a trial market
  • Increased speed of deployment
  • Avoiding the pitfalls and surprises of a new foreign location

Each of these benefits allows the client to focus on the substantive business activities required to expand into a new market, without excessive cost or complexity. In addition according to Baker & McKenzie, outsourcing employment and payroll through a third party such as a Global Employment Organization should reduce Permanent Establishment exposure as long as the employee doesn’t exercise “contract-concluding authority”.

Shield GEO & HR 

The client’s human resources department will continue to have responsibility for the daily work activity of the employee, but Shield GEO will take care of the specific in country employment and payroll requirements.  This saves HR the need to research and source local providers in a country where they may not have prior experience or contacts.  Instead, Shield GEO becomes the ultimate HR resource and can offer ongoing consultation as the business expands its activity or faces changes in local rules and regulations.

By contracting with Shield GEO, an HR department can manage employees across multiple global locations from one central office, knowing that all country specific requirements are being handled in a safe and informed manner.

Shield GEO vs. DIY: What Are The Differences? 

It is significantly faster, safer and cheaper for international companies to use Shield GEO service in the initial stages of entering a foreign market.  Most importantly, by using Shield GEO companies can move into new markets around the world within defined budgets and timeframes prior to deployment.   This way costs are known in advance so there are no hidden surprises.

Using Shield GEO will also involve faster, more agile deployment than a traditional DIY international assignment, bringing a typical deployment time of many months down to a few weeks.

If the company decides to use in-house resources to set up a local entity the process is much more complex.  The company will have to source local vendors that are able to provide all of the services that a Global Employment Organization would offer to a client.  It will mean sourcing at the very least the following:

A company to establish your local entity and office space

– Local employment lawyers and accountants and immigration professionals

– Local partners in countries where co-ownership is required

– Local human resources, payroll partners and employment professionals

The company would then have to manage each of these vendors individually on an on-going basis, which can be an overwhelming task for even the largest corporations.  Reducing this overhead provides great benefits to busy HR and Global Mobility departments. Obviously, using the proven services of Shield GEO is the ideal solution for small to medium size businesses that must expand within a defined budget, and are looking for a more agile alternative.

Shield GEO Costs 

If a human resources department has a contract with Shield GEO, they will have one point of contact for all employment and payroll services, and one bill to pay each month with fixed costs.  The actual GEO costs are two-fold and depend on the country of deployment:

  • Shield GEO Management Fee, which is a flat-fee charged per employee per month.
  • Work Permit costs which are typically one-time upfront fees

These fees are charged monthly on top of the Total Cost of Employment (TCE) which is made up of the employees salary, employers contributions, taxes, statutory benefits and other employer costs. Shield GEO can also process expense reimbursements from the client to the employee.

 Shield GEO Engagement Roadmap

  • We’ll organise an initial consultation with your office to ascertain your requirements.
  • Provide you with a full quote which will include a pay-roll simulation, required documents and have detailed information about the work permit process (if required).
  • Once you’ve agreed to progress with Shield GEO we’ll issue the following contracts and documents for your review;
  1. Framework Agreement
  2. Letter of Assignment
  3. GEO Employment of Record Agreement
  4. Local Employment Contract
  5. Employee Information Sheet
  • Once these contracts are agreed and executed we’ll then organise calls to introduce our team to yours to ensure the smooth commencement of the assignment. This will ensure that HR, Payroll and Accounts Payable are all in contact and we can jointly agree payroll processes and dates.
  • If Work Permits are required our local team will collect the relevant documents from your employees and lodge the applications. Your team and your employees will be kept abreast of the applications progress and once approved provided with step by step instructions to ensure their arrival in country is as seamless as possible.
  • Once the employee is in country our local team will assist with local tax and social security registrations and provide other support as required for example employment documents to assist with bank account opening or to lease a property.
  • We’ll raise the first invoice on the date the employee starts work in-country.
  • Pay-roll will then be run on the agreed date and funds will be remitted to your employee’s bank account. They will receive payslips and we’ll send a monthly report to your HR department.
  • Your Account Manager will be the primary contact for you and your employees throughout the project.
  • When the project finishes and the employee will no longer be employed through Shield GEO, we will provide you with the statutory requirements for termination which may include documentation and timeframes and end of employment payments. We’ll deliver official termination notices to all parties including de-registering the employee with tax, social security and immigration authorities as necessary. We’ll also supply you and the employee with their end of employment documentation including proof of de-registration.

Summary

Shield GEO is a flexible and reliable international employment organization, ideally suited for small to medium size businesses.  It benefits companies who are expanding into foreign markets and need to deploy staff, but want to avoid the overhead of incorporating a new company to employ their staff.

Shield GEO’s professional services enables these companies to deploy their staff compliantly, quickly and cost effectively.  If you would like to know more about how Shield GEO can help your company deploy international staff, please contact us.

  • The ShieldGEO Solution
+1 877 457 7691
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