We experience that world wide companies look for the best employees they can find and these employees not always need to be living in the home country of the company. Talent can be globally recruited without the requirement to move to the home country of the company.
How to cope with the payroll?
Having an employee in a country does not necessarily imply this company needs to set up a business and become exposed to local taxed in order to hire and employee the desired employee. For instance in the Netherlands your company can be registered as non resident employer. Upon registration a payroll can be set up.
Non resident employer
A non resident employer registration implies the company does not get exposed to any other tax than the tax and social premiums related to the employee being employed. The moment the employee is no longer employed, the registration can be terminated. No strings attached.
No chambers of commerce registration required. The problem that does occur is that this non resident employer will find it nearly impossible to obtain a pension insurance for the employee, should a pension be granted to the employee. The pension insurance company need to be a Dutch recognized pension insurance company in order to be able to deduct the pension premium from the Dutch tax able income. All pension insurance companies ask in their application form for the Chambers of Commerce number. Without number no insurance. The alternative is to provide the employee with a benefit replacing the pension to be granted, so the employee can arrange for a pension himself.
Global payroll
If and when your company is in the market to have employees actually globally employed by your company, you might think you need to investigate in each country how every works. Or you need to pay local consultants to do this for you, if you want more guarantees.
This is also not required. Your company can use the services of a international payroll company. You only need to indicate to that company where your employee is living and what are the conditions of the employment and all is done for you.
Global employees become more attractive. The human resources department of a US based company approached us last summer for information about setting a payroll up for one of their employees. This employee is stationed in Europe (Netherlands) because then the request of the US client can be processed at ‘night time’ from a US perspective by the employee working in Europe. An overnight service has been created that is very much appreciated by the client. Such a payroll construction is possible without the employer stretching the work times of the employee.
Can every employer have a non resident status?
No not every employer can have this status. The key is that the employee does not become a permanent establishment or fixed contact person. A permanent establishment is created when the employee in name of the employer rents an office. Then the employer has become a resident employer subject to profit tax and sales tax besides the wage tax.
The same situation occurs when the employee becomes indeed the direct contact person of clients and clients know how to reach this employee on local contact details. This situation equals the one of the permanent establishment.
Can every employer have a global payroll provider?
Yes every employer can have a global payroll provider. If you have employees in multiple countries a global payroll provider quickly becomes the better party to work with as everything, domestic and global, is presented to you in one overview.
Orange Tax Services team
Orange Tax Service can assist you with the set up of a non resident employer in connection with a payroll for this employee you have. We can also help with the registration of a branch company in case your company would like to provide an office space to your employees.
We also provide global payroll services. You will be offered a one contact person agreement where we can provide in any country of the world the payroll for your company. We experience that we process also small payroll administrations. The logic is that large payroll administrations are more often processed via the B
