Since the outbreak of COVID-19, Employment of Record (“EOR”) services have seen a boost in use cases, especially in Asia Pacific. GoGlobal explains how:
Scenario #1: VISAS
According to a 2018 survey conducted by IEEE Spectrum, the majority of computer, architectural and engineering occupations in Silicon Valley were born outside of the US, mostly in Asia Pacific. That includes nearly 79% of those in computer and mathematical professions with 70% being foreign born. Due to COVID-19 and the current political climate in the US, GoGlobal is experiencing an uptick in cases where H1-B and related visas in the US are being delayed or simply not being renewed. Many organizations do not want to lose their specialized team members and is looking to GoGlobal to temporarily employ their staff in their home countries seamlessly. GoGlobal has been asked to help transition staff to all over Asia Pacific and to ensure tax compliance, proper social registration and all paperwork are properly filed so that the candidates can reapply next year if necessary.
Scenario #2: Work from Home Policies GoGlobal
As companies get used to Work from Home (“WFH”) phenomena, others are making it permanent. Many companies such as Twitter have made it effective indefinitely while others such as Facebook and Microsoft have extended these options. GoGlobal believes the WFH trend will continue as people question the need for daily commutes and expensive office space. Whilst some companies embrace this 21st century policy, a lot of US–based clients are stuck in a 19thcentury tax policy resulting in issues with green card holders or equivalent visa status individuals wanting to “work from home” – in their home country. Companies are grappling with the decisions of:
- Keeping the candidate on the US payroll and doing nothing while they return home
- Converting the candidate to a contractor
- Moving the candidate to an EOR completely
- Conducting a shadow payroll to maintain benefits in the US but ensure compliance in the local country
- Using / creating a legal entity in country
All while trying to avoid triggering any PE tax liabilities by having staff stationed in a country where they may not have a legal presence. More often than not, conducting a form of shadow payroll is the best form of execution for these cases. GoGlobal’s team has worked on cases in these situations which require significant cross–border tax and legal expertise on top of having a platform for employment in country. Contact GoGlobal for any information you require.