THE ULTIMATE GUIDE TO GLOBAL EXPANSION

ULTIMATE
GUIDE TO
GLOBAL
EXPANSION
Make your growth goals a reality by taking a
modern approach to global expansion

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Part 1 Foreword
Part 2 The Importance of Global Expansion

Part 3 Developing a Successful Strategy

Part 4 Global Hiring Options

Part 5 Conclusion

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION

Part Foreword

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It’s your company’s turn to embark on international
expansion and take your business into the global
marketplace. Maybe it’s your first attempt at global
expansion and you don’t quite know where to start.
Or perhaps you’ve done it before and can’t shake
the feeling that there must be a better way.

Hiring a single international contractor may seem

straight forward, but how can you ensure they are
operating compliantly?
How will you protect your company’s intellectual property (IP) in
foreign countries? Are you ready to take on the requirements,
costs, and challenges associated with setting up a foreign entity?
How will you maintain compliance in multiple countries? How do
you determine the right expansion strategy for your business in
order to see the best return on investment? There are many
questions to ask before expanding operations globally.

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In this eBook, we address how innovative solutions have streamlined

the global expansion process, allowing companies to expand into new
markets quickly, compliantly, and efficiently.
In today’s global business environment, innovation is achieved by focusing on one simple philosophy:
stay agile. “Agile” refers to a methodology that allows companies to cope with the ever-changing needs
of their customers and the markets in which they do business. Agile adheres to the idea that work should
be done in incremental sprints on a shorter timeline versus delivering one large piece immediately
without testing their success throughout the process. This approach is a learning cycle of turning ideas
into products, measuring its effectiveness, learning from the experience, and adjusting processes before
accelerating through the cycle again. With today’s volatile and competitive business environment, successful
companies value the idea of being adaptive and flexible versus stagnant and rigid.

These ideas apply to international expansion based on the theory that companies should not have
to invest exorbitant amounts of time and money into setting up a foreign subsidiary, just to test
their potential in a new market or capitalize on a unique opportunity. Instead, companies should
place a small team in-country immediately to test the market and evaluate the potential for long-term
commitment. If both the market and model prove fruitful over time, then companies can consider setting
up a foreign entity. However, companies looking to tap into new talent pools or keep a light presence in a
country might discover that setting up a foreign subsidiary is not always the right choice. Now, more and
more companies are discovering that modern expansion methods can serve their global needs for the
entirety of their business lifecycle.

It’s time for a modern-day playbook for global expansion.

Successful international growth is achieved by applying the latest business models and trends to
your global strategy. We’ve seen it work in hundreds of cases across numerous expansion scenarios. In
the pages that follow, we discuss the importance of developing a global expansion strategy that utilizes a
modern approach and the different expansion options available in order to help you successfully take your
company global.

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Part

2
The Importance of
Global Expansion
Global expansion has become a necessity for
companies looking to continue their growth in
today’s competitive landscape.

Globalization is here and now and is

something every company should
embrace, regardless of size.
There are many opportunities available for companies to
take advantage of once they enter the global marketplace. In
the following pages, we discuss the top benefits of
expanding globally.

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When determining if international expansion is the right choice for

your business, consider the following benefits.

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1. Establish New Revenue Streams
According to a recent report from
If your business is performing well domestically, then you
Mazars, 45% of mid-market
are already in a better position to find success in global
company executives interviewed
markets and diversify your revenue sources. A new
said they generate more than half
customer base comes with different wants and needs,
of their revenue internationally.
creating a unique opportunity for your business to fill a gap
in the local market.

22. Gain a Competitive Edge

To stay ahead of competitors, global expansion is a must.
Going global accelerates your company’s growth by giving you
access to a new customer base. A new customer base not only
opens the door to more opportunities for your company, but
also enables you to establish loyalty in a new market before
your competitors.

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33. Access a Unique Talent Pool:

Global expansion opens the door to high-quality talent who can bring in diverse perspectives and unique skill sets.
Access to local talent pools in new markets gives your company direct insight to local cultural norms and
expectations, thus allowing you to better adapt your product or service to the local customer base.

44. Improve Market Perception

Going global not only increases your audience, but also increases your company’s credibility and ability to
market itself as a multinational brand. By building a global presence, you give customers more reason to
believe in your company by establishing credibility in multiple markets.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION

Part Developing a

3
Successful Strategy
The first step to a successful global expansion is
creating a comprehensive strategy that puts your
business in a position to make its global growth goals a
reality. As you build your global strategy, ask yourself:
Why is my company considering global expansion?

Without an effective strategy in place, what once

seemed like a great idea could quickly become a
time-consuming and expensive strikeout.

Your global expansion strategy needs to incorporate the overall

vision for your business and address the goals you want to achieve
by expanding into each new foreign market. Once your team is
aligned on your global initiatives, you are ready to start developing
a strategic plan.

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We have compiled the following list of tips to help your company build
a plan for sustainable global growth.
While this list is not all-encompassing, these simple pointers will help your company successfully plan
your global expansion.

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1. Develop Entry and Exit Strategies
Before entering a market, it is important to familiarize yourself with the requirements for
entering and exiting the market compliantly. The right entry plan can put your company in a better
position to act immediately when it is time to build a team in a new market. Depending on your
expansion method, shutting down operations in a country can be a big challenge. For example, it
typically takes two full years to get governmental sign off to close a Chinese subsidiary. By beginning
your expansion with a strategy that takes entry and exit into consideration, you put your company in a
better position to avoid the challenges associated with exiting a foreign market.

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2. Utilize an Agile Approach
In terms of global expansion, Agile refers to a strategy that takes small steps towards its long-term
goals, allowing companies to adapt their practices in order to better thrive in new foreign markets.
Before making a permanent commitment to a country, companies are advised to test the market to ensure
there is potential for long-term success and that the market justifies further investment in infrastructure
and fixed assets. Companies that enter new markets with an agile approach tend to experience increased
productivity and are able to maximize their return on investment in a shorter time period.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 3

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3. Hire Local Nationals
Human capital is extremely valuable and can be a company’s best resource in a new foreign market.
Local employees are incredibly valuable and can help you identify untapped opportunities, evaluate market
penetration plans on a day-to-day basis, and make adjustments to your company’s strategy when necessary.
Hiring local talent gives your company access to local expertise and insights that can help you better understand
the employment environment and cultural expectations in foreign countries.

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4. Test the Market
Invest time in researching and learning the cultural dynamics and nuances in your target market and
mold your brand strategy around the expectations and desires of your new audience. This includes localizing
your brand messaging to ensure information is communicated appropriately and adjusting your products and
services to fit the cultural differences.

To test the viability of your product or service with new customers in a new geographic location, work with an
in-country partner or send team members to research your target market and evaluate how your product or
service will be received by local consumers.

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5. Partner Up
Before expanding globally, companies have
to familiarize themselves with a large volume
of information in regards to employment
regulations, all of which can be challenging to stay
updated on. Ignorance of in-country operating
procedures can lead to liabilities ranging from
mild to absolute show-stoppers. One company
lost almost $350,000 USD for having misclassified
just one independent contractor who had been
operating like a full-time employee. Instances like
this are extremely common and showcase the
ways in which companies can benefit from the
expertise of a global partner.

Before launching into global expansion initiatives,

protect yourself from legal consequences by
partnering with experienced companies whose
primary focus is to recognize warning signs,
understand potential risks, and do everything in
their power to help you stay compliant.

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THEULTIMATE
ULTIMATEGUIDE TO TO
GUIDE GLOBAL EXPANSION
GLOBAL EXPANSION PART 3

66. Select Your Global Hiring Method

Determining how to hire in a new foreign market is an essential part of your expansion strategy.
Building your global team is one of the largest aspects of going global, and the right hiring method is key in
order for companies to reach their full potential in global markets. Depending on your company’s global
growth goals, there are four different international employment methods to consider, each with its own set of
unique benefits. These employment methods include:

1. Foreign Independent Contractors

2. Non-Resident Employer (NRE)
3. Foreign Subsidiary Establishment
4. International PEO (Professional Employer Organization)

In the following section, we define the above employment methods and explore the benefits and challenges
associated with each to help you determine the best fit for your global needs.

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Part

4
Understanding Your
Hiring Options
Depending on your growth goals and expectations,
some international hiring options will be more
beneficial to your company than others.

When selecting an employment method,

the first order of business should be
considerations for employment liability,
tax implications, and IP protection.

Following that, companies must evaluate how speed,

flexibility, asset holding, compliance, budget, and time
commitments will affect how their global expansion
plays out.

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Before deciding on one of the global employment methods listed below,

evaluate the benefits and risks associated with each option to see which
will help your company achieve its global growth goals.

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1. Foreign Independent Contractors
What should be considered a stopgap solution at best, the use of foreign independent contractors is the most
common international employment compliance trap. There are certain situations where using this option has
minimal risk: one-off design jobs, project-based work with a clear start and stop date, or project-based
research that doesn’t expose business-critical IP. However, despite these potential benefits, noncompliance
due to contractor misclassification is exceedingly common. In fact, 95% of the “independent contractor”
relationships we’ve been presented with over the years are noncompliant.

What is a Foreign Independent Contractor?

A foreign independent contractor is an individual who lives in a foreign country and works for a company
headquartered in a different country under a contract that does not qualify as an employment agreement. To
better understand the various roles played by a foreign independent contractor, here are the three most
common types:

Autonomous Contractor: An individual who works for your firm in a foreign country without
oversight. An agreement, preferably local to that country, defines this employment relationship.

Project-Based Through Agency: An individual who is hired for work in-country by an agency, which
represents a company located outside of the country of operation.

Contractors Through Umbrella Companies: An individual is contracted through his/her privately

owned personal liability company.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 4

Benefits
Potential Cost Savings: Even though many employers pay independent contractors more money per hour,
businesses save money on benefits, office space, and equipment. While permanent employees are entitled to
benefits such as paid time off (PTO) and health care, independent contractors are only entitled to receive their
hourly wage and are responsible for their own tax withholdings. If done correctly, overall payroll savings can be
up to 20% when using contractors.

Highly Qualified, Flexible Workers: Contractors are usually experts in their trade and their high-quality work
can help get business operations off to a great start when entering a new market. Plus, contractors are typically
more flexible with their schedule and willing to adapt to meet your needs.

Downsides
Misclassified Employment: The most common issue associated with independent
contractors is that companies find top talent internationally and “contract” them as
a full-time equivalent, treating them in every way like a domestic full-time
employee minus the foreign labor law compliance. Even though you call these
individuals "contractors," local labor courts will classify them as full-time
employees and will penalize you for noncompliance.

Lack of Legal Precedence: Foreign companies have little to no recourse when

working with independent contractors, meaning that if legal issues arise, your
company needs a legal presence in that country. If you do not have a legal
presence, you will be subject to significant fines on top of the benefits owed to
your employee.

International Contract Confusion: Employment contracts used in your home

country will most likely not be compliant with the labor laws in foreign markets.
Regulations that run counter to the written contract, even if the contract is silent to
such matters, will be enforceable per local code.

Noncompliance Penalties: In the case of misclassified contractors, potential

penalties include unpaid income taxes, unpaid contributions to social security
schemes, government fines and penalties, and long-term inability to conduct
business in that jurisdiction.

Lack of In-Country Presence: Companies cannot register and remit an employee’s

required payments into a country’s social security, income tax, health, pension,
workman's comp, etc. unless they have a local registered company Tax ID.

Inability to Sponsor Work Permits: Companies cannot sponsor work permits that
allow foreign nationals to work in a country if they do not have a legal presence in
that country. Work permits can only be applied for and sponsored by local entities.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 4

Moving Forward with Foreign Independent Contractors

If you decide to move forward with a contractor relationship, keep the following in mind to
protect your company from potential risks:

• Clearly establish the independence of the contractor from your company in your contractor agreement
• Ensure the contractor operates independently of company oversight
• Do not require contractors to work full-time or on a set schedule
• Make sure contractors provide their own equipment and workspace
• Do not provide contractors with the same benefits given to full-time employees
• Avoid non-compete provisions in contractor agreements as a non-compete clause creates a
presumption of an employment agreement in some countries

If you are already utilizing foreign independent contractors, make sure you sign each contractor to a
locally-compliant contractor agreement and regularly monitor the relationship and activities. If the
contractor is not operating as a true contractor or if you’re operating in a country that doesn’t recognize
contractor arrangements, then you need to look at other employment options. These include setting up a
foreign subsidiary or utilizing International PEO, both of which are explained in the following pages.

It is important to note that

contractor agreements used in your
home country will not be accepted in
foreign countries. Work with an
international consultant and/or legal
team to create a country-specific
contractor agreement.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 4

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2. Non-Resident Employer (NRE)

While not as widely utilized, registering as an NRE gives companies the option of entering select foreign
markets without setting up a foreign subsidiary. Being classified as an NRE allows companies to gain
local insight to business practices and save money when compared to setting up a foreign entity.

What is an NRE?
A Non-Resident Employer is a local registration that gives companies an in-country Tax ID, allowing them to
legally onboard employees in their new country of operation and fulfill in-country tax obligations. NREs are
only available in certain countries throughout the world and go by different names depending on the
country of operation. Most commonly utilized in the European Union, this employment method enables
companies to take on projects and operations with workers in multiple countries without having to set up a
foreign subsidiary.

Benefits
In-Country Tax ID: Having a Tax ID allows you to remit employer contributions to the government.
In a few countries, you may also be able to register for supplementary benefits through an
insurance carrier with a Tax ID.

Fewer Regulatory and Reporting Requirements: Since an NRE is not a full legal entity, the regulatory
reporting requirements are typically less than an entity. One major example is reduced annual tax
filing requirements.

Cost-Effective: NREs are typically less expensive and allow for faster market entry when compared
to setting up a legal entity. Additionally, NREs enable companies to test their potential in a new
market before making a permanent, long-term commitment.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 4

Downsides

Limited Functionality: Typically, an NRE only performs certain functions

associated with “market development.” Generally, these include: marketing
activities, displaying product or service samples, and market research analysis.

Compliance Risks: NREs are often scrutinized for tax avoidance and
noncompliance. These structures are “low-hanging fruit” for tax auditors.

Limited Time Frames: Although actual time frames vary in each country, as a
general rule you can typically only have employees under an NRE for a
maximum of six months. For companies using NREs as a bridge solution while
establishing a legal entity, be aware of time constraints to ensure the entity is
up and running before time runs out.

Reporting Requirements: NREs require you to have a local resident director,

and that local director has signing and decision-making authority over your
local operations and bank accounts. In small headcount scenarios, this is
commonly outsourced and expensive.

Moving Forward with NRE

Companies that wish to register as an NRE must wade through the legal setup process, open a local bank
account, establish an office address, and place a resident director. Once all these steps are completed,
companies can begin legally onboarding employees. If you choose to utilize an NRE structure, make sure this
option is available in your target countries and keep compliance and maximum time frames in mind.

When utilizing an NRE structure:

• Know how long you are able to maintain a legal presence in-country through an NRE
• Have a plan to transition to a more permanent solution once you have reached the allotted time frame
• Ensure you understand the reporting requirements as it is difficult to maintain compliance with this option

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3. Foreign Subsidiary Establishment

Traditionally, global expansion meant setting up a permanent foreign subsidiary in order to hire
employees and establish a presence within a new foreign market. Foreign entity establishment is the best
option for companies that are committed to a country’s market long-term, plan to hire a large headcount,
have an extensive budget, are in an industry with strict regulatory requirements, and/or have the option
to delay hire time.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 4

What is a Foreign Subsidiary?

A foreign subsidiary is the formation of a legal entity based in a different country that is controlled by
another company (the "parent" company) through ownership of more than 50% of the voting stock. The
parent company is typically the global or regional headquarters or an international holding company.

Benefits
Highest Level of Compliance: Going the extra mile to set up an entity covers a larger portion of the risk
spectrum and helps confirm companies meet all expectations set by tax regulations and bilateral tax
treaties.

True Market Presence: Establishing an entity in a foreign country allows your company to directly
contribute to the local economy. This in turn, positively influences market perception about your
commitment to that market.

Legal Enforceability: Foreign subsidiary establishment is the only option that provides true legal
recognition for your business by local governments. If you get involved with any contract issues, you and
your legal department can use the local court systems to get relief.

Physical Asset Acquisition: Foreign subsidiaries allow for physical asset holding. For industries that deal
with holding large amounts of physical assets, such as manufacturing or real estate, this may be the only
route to maintain fixed assets on their accounting records.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 4

Downsides

Costly Initial Set-Up: On average, it costs $15,000-$20,000 USD to set up a foreign

subsidiary.

Significant Maintenance Fees: The actual maintenance of that entity costs

companies an average of $40,000 USD per year in hard costs. Since you will need to
hire a bookkeeper, file periodic tax forms, run payroll, hire a resident director, get a
registered office address, and handle annual audits, these costs add up quickly. And
these are just the hard costs; soft costs in terms of the executive team’s time increase
these figures exponentially.

Extended Set-Up Time: Setting up a foreign entity takes an average of three to four
months. This becomes an issue if you are trying to meet a business deadline, want to
capitalize on new opportunities immediately, or want to secure a qualified candidate.

Difficult Teardown: It is very difficult to dissolve and stop operations once a foreign entity is established. If
a new hire does not work out or your company does not see the success it expected, teardown can cost
you up to three times the money and time you spent setting up the entity.

Compliance Management: Staying up-to-date with the ever-changing regulatory landscape is challenging.
When you establish a foreign subsidiary, your team is responsible for staying current on changes to all
aspects of national/regional/local tax laws, payroll withholdings, labor laws, and banking regulations.

International Banking Difficulties: To set up a foreign entity, a local bank account is required. Anti-money
laundering regulations have made setting up and maintaining foreign bank accounts an enormous challenge.

Time-Consuming On-Site Requirements: Signatories on bank accounts and corporate documents must often
be signed in-person. This creates additional complications in regards to cost and time, especially if the person
who is required to sign the documents does not live in-country.

Loss of In-Demand Candidates: You cannot hire and onboard a candidate until the foreign subsidiary is fully
operational. This means you might have to wait an upwards of four months to hire a new employee, putting
you at risk of losing the opportunity to add high-quality candidates to your team.

Local In-Country Director Requirement: A resident director is needed in order to compliantly operate a
foreign entity. Are you going to have your only sales person or country manager be the director? If they are
designated as the director and decide to completely drain your company’s foreign bank account, then you
have no legal recourse in that country. If you plan to outsource this requirement, anticipate spending at least
$10,000 USD per country, per year.

Executive Team Time Requirements: On average, executive teams spend 160 collective hours working with
legal and finance to sign off on documents, approve expenses, and set up a local bank account. Are you
willing to dedicate a month of your executive team’s time for one employee in one country?

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 4

Moving Forward with Foreign Subsidiary Establishment

Entity establishment is a lengthy, complex, and expensive process that differs
from country to country.

Below is a high-level list of essential items to have in place if you

plan to establish a foreign subsidiary:

• Identify a local director

• Hire a local law firm for legal contracts and registration applications
• Hire a local accounting firm for all tax and bookkeeping related activities
• Assemble and supply the details of all corporate directors and executive
team, including background checks, copies of passports, home utility bills, etc.
• Open a local bank account, including a capital contribution account
• Register with the local labor board
• Register with the national health, pension, and unemployment schemes
• Create locally-compliant employment contracts
• Establish a local operating agreement
• Establish a transfer pricing agreement
• Complete VAT or GST registration, if applicable
• Secure an office space or, at a minimum, a registered office address

When thinking about the steps listed above, note this is a waterfall-style process, meaning many of the steps
cannot be started until the previous step is completed and accepted (usually by a foreign government agency).
A similarly sequential and gated list of steps must be completed to tear down a foreign subsidiary.

Creating a foreign subsidiary is the least risky in terms of labor laws, taxes, and IP, but is the costliest in terms of
overhead. Companies often choose to go through this process when expanding globally for the first time
without fully comprehending the time and money it takes to manage these entities. Instead of jumping into a
permanent commitment right away, it is advised to take an agile approach with an option like International PEO,
which we explain in further detail in the following pages.

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4 International PEO (Professional Employer Organization)
4.

International PEO is an innovative solution that has reinvented global expansion by enabling companies to hire
employees anywhere in the world quickly, compliantly, and without the burden of establishing a foreign legal entity.
By taking advantage of the sharing economy made popular by companies like Uber and Airbnb, International PEO
allows companies to hire and onboard employees around the world in a matter of days, compared to several months
needed for entity establishment. The sharing economy is defined as a socio-economic ecosystem built around the
sharing of resources by people and organizations.

International PEO falls into this category because traditionally, companies would have to create their own subsidiary in
a target country in order to compliantly hire employees. With this model, companies are leveraging infrastructure
already created by the International PEO provider to act as the Employer of Record. This practice is often referred to as
“Employee Leasing” and allows companies to legally operate in a country without having to set up a foreign legal entity.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 4

What is International PEO?

International PEO is a global employment solution where your employees in foreign countries are hired
directly through a third-party on your behalf. Through this Employer of Record solution, the International PEO
provider becomes an extension of your HR department, managing all payroll and tax withholdings,
remittances to the local authorities, health and social security-related programs, onboarding, health
insurance, benefits, pension, and terminations. Your company continues to manage all day-to-day
responsibilities and employee liabilities.

This model allows your company to add full-time team members to your global operations within a matter of
days, without having to cope with the headaches, time, cost, or rigidity of managing a foreign subsidiary.

Benefits
Quick Market Entry: Once a candidate has been identified,
International PEO can have them working for you in as little as 48
hours. This solution cuts the time it takes to enter a foreign
market by up to 90% when compared to creating a foreign
subsidiary.

Cost Savings: International PEO can be up to 60% cheaper when

compared to creating a foreign subsidiary, allowing companies to
better utilize their budget in global markets.

Time Savings: Velocity Global manages all employee onboarding,

risk mitigation, compliance, payroll, and benefits, freeing up your
time and allowing you to focus on running your business. Please note these benefits are
specific to Velocity Global’s
Risk Mitigation: This solution utilizes in-country expertise to help
International PEO solution.
mitigate liability and employment-based risks. This proactive
Specific benefits vary by provider.
approach to compliance anticipates potential issues and ensures
your company, IP, and employees are protected in foreign
markets at all times.

Highly Flexible: Flexibility is the cornerstone of International

PEO, that’s why there is no need to sign any long-term contracts.
If you want to test market viability or have a short to mid-term
project in a country, this solution makes it easy to exit a country
when needed, with no lingering costs or liabilities upon exit.

Streamlined Process: International PEO streamlines your entire

global expansion process and provides you with one monthly
invoice for all your employees around the globe.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 4

Employee Benefits and Satisfaction: Your employee will receive ongoing HR support, giving them peace of
mind that employment needs are met and that they are receiving the appropriate medical and
supplemental benefits.

In-Country Expertise: Receive continuous in-country support to help you navigate local labor laws,
understand local cultures, and remain compliant in foreign markets.

Global Reach: With capabilities in over 185 countries, our global reach has got you covered.

Global Employment Scenarios Simplified by International PEO:

Mergers & Acquisitions

When companies experience a robust merger and acquisition, one company may be left in charge of new
employees located all over the world overnight. Rather than having to find new talent or set up multiple
entities across the globe, International PEO allows your company to keep those valuable team members
onboard so you can immediately begin moving forward with your new business model.

Expatriate Employment
With International PEO, you can compliantly send team members into foreign markets to work for your
company without the overhead of a foreign subsidiary. This enables you to foster the growth of internal
employees while still exploring business potential in new markets.

Testing New Markets

International PEO enables your company to obtain a legal presence in a country without having to set up a
foreign legal entity. This allows you to compliantly send team members into a new country to test market
viability.

H-1B Visa Challenges (for employees immigrating to the U.S. for work)
If your employees do not receive an H-1B visa, International PEO can be used as a solution to keep them
working for you from either their home country or any country supported by your International PEO provider.
If your employee receives an H-1B visa in the future, they can be easily transitioned off the International PEO
service so you can employ them directly.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 4

Downsides
Physical Asset Acquisition: This employment model does not allow you to acquire fixed assets
in-country. To remain compliant, a foreign legal entity is required for physical asset holding.

Permanent Establishment Considerations: Each country has different tax obligations for companies
depending on their nature of work. It is important to look at tax codes in your target country and
determine if and when you will have to establish an entity in order to remain compliant from a
taxable nexus perspective.

Moving Forward with International PEO

International PEO is the best option for companies looking to enter new markets compliantly and with the least
amount of monetary and time investment. Once you have selected an International PEO provider whose
benefits align best with your global growth goals, you can begin streamlining your expansion into new markets.

After identifying and securing a candidate, an International PEO provider like Velocity Global will:

• Guide you through country-specific regulations including: monthly withholdings, taxes,

social insurance, and employment regulations
• Provide you with an accurate estimate of monthly payroll costs
• Draft a locally-compliant employment contract for you to review and approve
• Onboard employees in as little as 48 hours
• Manage all HR functions including payroll, expenses, commissions, allowances, local benefits,
risk mitigation, and compliance
• Send you one monthly invoice with full transparency of payroll obligations
• If needed, walk you through terminations to ensure compliance with local labor laws
• Provide you with on-going support and premium service

C H O O S E T H E B E S T S O L U T I O N

FOREIGN INTERNATIONAL
CONTRACTORS NRE
SUBSIDIARY PEO

Asset Holding X

Flexibility X X X

Speed X X X

Cost X X X

Compliant X X

Enforceability X X

Risk Averse X X

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION

Part

5
Conclusion: Executing Your
Global Expansion Strategy
The time has come for a more efficient approach
to international expansion. The world is
constantly evolving and so is your competition.

Using old, traditional methods to go

global will at best allow you to keep up
with the market.
Instead, companies need to be able to test markets and
weigh their options before making a permanent
commitment to a country. Fortunately, companies going
global today can take advantage of a new, flexible method
for entering new countries: International PEO.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION PART 5

Before making a move to go global, consider the following:

Maintain a flexible, agile approach that enables your company to explore global markets efficiently and
compliantly.

Bring together the right resources internally to execute on the strategy. This typically includes Finance,
HR, Legal, and Operations.

Study your target country, learn the local culture and employment laws, adjust your business model
accordingly, and create a plan for entering (and potentially exiting) the market.

Global expansion opens the door to many new and exciting

opportunities.
Capitalize on these opportunities with an expansion strategy that enables flexibility and agility in
new foreign markets. Traditional methods have been replaced by those that focus on efficiency in order
to give companies a better way to go global. International PEO was created with the sole purpose of helping
companies exceed their global growth goals, and in many cases is the optimal way for companies to expand
into foreign markets.

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THE ULTIMATE GUIDE TO GLOBAL EXPANSION

Ready to Get Started?

hello@velocityglobal.com

Velocity Global is the leading global employment solutions provider that has reinvented the way
companies expand overseas. With unparalleled expertise in over 185 countries, Velocity Global
delivers best-in-class service and innovative solutions that enable companies to feel confident
breaking into new markets. Velocity Global’s services include International PEO, global immigration,
payroll, recruiting, and consulting to help companies achieve their global growth goals. Its
International PEO solution gets companies into new markets up to 90% faster while reducing the cost
of global expansion by up to 60%. Companies trust Velocity Global to ensure a compliant, efficient,
and flexible global expansion.

+1 (303) 309-2894
Hello@VelocityGlobal.com
VelocityGlobal.com
The intent of this eBook is solely to provide general and preliminary information and shall not be construed as the basis for any decision. This eBook
has been prepared by Velocity Global as general information for private use to whom the eBook has been distributed. It is not intended as a personal
recommendation of a particular strategy, and therefore does not provide individually-tailored advice. Additionally, the information contained in this eBook
does not constitute legal advice on the consequences of making any particular decision. ©2017 Velocity Global, LLC. All Rights Reserved.

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