Expanding a business overseas can be a time-consuming process — not only do you have to keep up-to-date with country-specific regulations in order to remain compliant, but you must also factor in the need to establish a foreign entity just to operate your business internationally.
Altogether, the expansion process can take months to achieve, but it comes with notable benefits. Latin America is ripe with opportunities for businesses to capitalize on, including the country of Belize, which is home to sectors focusing on agriculture and tourism.
Belize also offers residents and employees who make less than $26,000 annually a tax-free regime. Although it has a small economy with a GDP of $1.4 billion, its economy continues to develop.
If you’re looking to expand your business to Belize, you may want to consider hiring a professional employer organization to help you with HR tasks and navigate compliance laws, including employment and tax regulations.
An international professional employer organization (PEO), generally referred to as an international or global PEO, is an organization that helps businesses expand to overseas countries. Typically, these organizations have staff with comprehensive knowledge and experience in HR duties, employment and tax regulations, payroll processing, accounting tasks, and more. PEOs help businesses with many everyday tasks, freeing up time to allow business owners to focus on other facets, such as the growth and revenue of their company.
For companies — especially small and medium-sized ones — who don’t want to deal with learning compliance in every country they expand to, or who simply don’t want to deal with difficult HR tasks, an international PEO can help.
When working with an international PEO, you’ll sign and enter into an agreement known as a co-employment relationship. This means that both the parent company and PEO provider will handle employment responsibilities, but the company’s ownership remains solely with the parent company.
An international PEO will have already established a local entity, saving you months’ worth of time. Some PEOs will assume all responsibility for employment locally, including recruiting and hiring workers, preparing contracts, processing payrolls, handling tax deductions and payments, providing benefits, and more.
PEOs are responsible for all aspects of payroll processing, including reviewing employee hours and calculating wages based on working hours and overtime, deducting and paying taxes on behalf of employees, and delivering payments on time to workers. They also work to comply with time zone differences, currency exchange rates, and international banking protocols.
Since benefit packages vary from country to country, an international PEO can help navigate country-specific expectations for employment and create benefit packages based on these expectations. Some benefits that PEOs can help with include:
PEOs will be responsible for enrolling employees in these benefits and processing any claims that are filed.
Many PEOs will handle all aspects of employee management, from recruiting and hiring employees to composing contracts, training new employees, and managing their performance. PEOs also handle the termination of employees and any compensation owed to them, such as unemployment benefits.
Typically, larger companies will have the financial resources and HR team to handle difficult and time-consuming tasks. However, smaller and medium-sized businesses may lack these resources. Instead of spending their time and effort on these daunting tasks, small businesses can hire a PEO to handle these responsibilities, freeing up their time to focus on other matters.
Other benefits of using a PEO include:
International employment laws vary from country to country. Failure to follow compliance laws regarding payroll, taxes, and benefits can result in infractions such as penalties and hefty fines. Plus, when your company doesn’t comply with the country’s laws, it may leave your business with a bad reputation.
Keeping up-to-date with ever-changing compliance laws can be difficult, but with a PEO provider, you can have peace of mind knowing that compliance experts will be there to guide you. Most PEO providers have specialists whose main job is to research and monitor international compliance laws. These specialists will work alongside your company to ensure that all compliance is strictly followed, keeping your company out of legal trouble and in the good graces of local bureaucracies.
If you’re planning on expanding your business to more than one country, HR costs can quickly add up. You’ll need a team of professionals who can research and administer payroll compliance and benefits in new and unfamiliar markets. If you’re starting out fresh, this can take a lot of time, and if you rely on just your team of HR professionals, you’ll see the costs quickly inflate.
An international PEO outsources complicated compliance issues to experienced individuals who already understand international compliance laws. Outsourcing saves you money and allows you to quickly expand while ensuring compliance is met.
Financial forecasting is a complicated process even for U.S.-based businesses. However, expanding overseas makes financial forecasting all the more difficult to achieve. When new to operating internationally, businesses often struggle to project monthly costs because of currency exchange rates and international banking protocols.
International PEOs have the knowledge and experience needed to deal with these issues and can help you develop an accurate projected budget. Additionally, some PEOs use software that houses employee data for easy access and distribution of payroll. Organizing your payroll will help in forming efficient plans and budgets.
It’s no secret that international expansion is both challenging and rewarding. Businesses recognize the opportunities that global expansion has, yet some are reluctant to take the necessary steps to expand internationally due to the time and effort it takes.
International PEOs can streamline the expansion process by eliminating the need for you to establish a new entity while also providing you with experts who are up-to-date on international compliance laws. Setting up a new entity can take months, but with a PEO acting as your entity, your business can expand its operations in weeks, all the while making sure you remain compliant in a new market.
With these responsibilities handed off to a PEO, you can sit back and focus on other areas of your business, further streamlining the process.
Emergency situations can occur unexpectedly. Situations such as pandemics, a weakened economy, a recession, or political instability, can cause significant harm to a business. In these times, businesses may need to terminate employees due to production halts and economic stunts.
An international PEO can circumvent these obstacles and provide flexibility in employment. While they can still terminate employees as needed, they can also reassign and make temporary contract adjustments regarding working hours, shifts, or what an employee’s job entails.
This flexibility can help businesses retain employees instead of terminating them and can offer businesses a quick recovery once the emergency situation has cleared.
Additionally, international PEOs allow you to test new markets before committing full-time. Testing markets allows you to evaluate whether or not it is viable to expand your business internationally, and whether your product or services can cater to local culture.
Working with an international PEO will help you navigate changing laws and regulations, keeping you safe from penalties, fines, and getting a bad reputation.
For example, a law enacted in 2016 in the EU, the General Data Protection Regulation (GDPR), requires vital privacy and security rights for individuals and their digital data. Simply put, all digital data kept by employers on their clients and employees must be secure, accessible to the individual, and safely transferable. Companies that don’t comply with the GDPR in EU countries face fines and penalties. An international PEO can help avoid these costs by ensuring that your company follows these regulations.
Finally, PEOs will ensure that all employees are correctly classified. Classifying employees correctly is important as an independent contractor classified as a full-time employee can take legal action if the individual doesn’t receive proper full-time compensation and benefits.
If you want to expand your business to Belize, you’ll need to understand local employment and tax regulations, the economy, and the culture. In most cases, you’ll also need to establish an entity. However, when using a PEO in Belize, you can avoid creating an entity as the PEO provider will act as an entity instead. Additionally, they will keep current with local employment and tax laws so that your company remains compliant.
A PEO in Belize works similarly to other countries. Depending on your required services, PEOs will provide HR and employment outsourcing services, including payroll processing, benefit packages, making contracts, and even recruiting and hiring local talent. PEOs will also ensure your business remains compliant with Belizean labor laws so that you don’t face any legal troubles in the future.
PEOs can take on several other responsibilities as well, including:
All businesses can benefit from PEO services. Small businesses may find more value in PEOs since they have limited resources and fewer in-house staff. If a small business expands overseas, it must ensure compliance, set up an entity, and delegate HR responsibilities to its staff. However, by using a PEO service provider, small business owners can pass these responsibilities onto PEO professionals with experience and knowledge in these areas.
While these PEO specialists handle these time-consuming tasks, small business owners and their staff can focus on other matters to help their businesses grow and succeed.
There is an abundance of international PEO service companies to choose from, and it can be difficult to determine which one is right for your business. The following steps will help you make the right choice.
First, you’ll want to determine your needs for a PEO service provider. Not all PEO providers will offer the same benefits, so it’s important that you prioritize what matters most to you. For example, if you want a PEO service that handles recruiting and hiring local talent, make sure to choose one that handles these responsibilities. Evaluate your human resource and risk management requirements to understand your company's needs.
Research is important for finding the best PEO provider. A dependable PEO must be capable of meeting your business's goals. They should also be a member of the National Trade Association of the PEO industry and IRS certified. Additionally, the PEO provider should be fully insured and possess extensive administrative and management knowledge.
It may be wise to ask for recommendations from other business owners or to read reviews and testimonials online. Hearing personal experiences from others can help you determine the credibility of a PEO provider.
Ask the PEO service about their certifications, risk management practices, and audits. Review their service agreement to ensure that any liabilities are clearly stated. Finally, make sure that the PEO service meets all state requirements.
Ensure that any PEO providers you might partner with have the appropriate certifications and insurance and that they're compliant with state requirements. This will save you time and frustration if you find out later on that they don't meet these crucial standards.
Still unsure of where to start in hiring PEO services? It’s an overwhelming choice. A good PEO service will help your business succeed in a foreign land. At Revelo, our mission is to help connect businesses with world-class remote talent in Latin America. Contact us today to find out more information.
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We can provide professional employer organization services for all these countries in Latin America.
