A tip for employing and recruiting abroad
  • Post author:
  • Post category:News
  • Post comments:0 Comments

When a company wants to let its employees telework from abroad for a long time or if it wants to recruit new employees outside its country, it sometimes comes up against administrative difficulties. If it does not have branches abroad, its teleworkers risk double taxation. Der Spiegel has looked into the matter and reveals that a growing number of companies, particularly in the tech sector, “use a kind of temp agency where they hire their own employees. In this way, Germans can be employed abroad via a local intermediary agency or continue to work permanently for their German company from abroad”.

This local agency takes care of the employment contract, salary, income tax. It also pays all local taxes. Employees receive their assignments from their main employer, communicate with their other colleagues in the normal way, but receive their salary from the local agency, which is a service provider. “The labor law of the country in which you work applies”, explains Anne Lachmund, labor lawyer. You are subject, for example, to public holidays and local leave provisions, unless otherwise agreed with your employer.

The market for these local agencies is booming, notes the German magazine, either because more and more employees want to go abroad while teleworking, or because this mechanism makes it possible to recruit from a therefore larger international pool. This applies above all to SMEs, since large companies often already have a branch abroad and do not need to use this system.

However, there are two major drawbacks. On the one hand, team cohesion is more difficult to ensure and employees employed by a local agency can feel like temporary workers. On the other hand, it usually costs “between $400 and $600 per month per employee, depending on the provider and the package you book”. The price of internationalization.

Leave a Reply