Categories: EOR, HR, Offshore

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Categories: EOR, HR, Offshore

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Fast tracking a company’s operational expansion takes time, capital and physical resources as well as increases a company’s risks. Using a reputable and experienced Employer of Record (EOR) service to fast-track workforce expansion is an increasingly popular business strategy. This is how RAEORA EOR services enable our clients to fast-track expansion, streamline processes and ensure local compliance while decreasing risk.

What are EOR Services?

An EOR service enables a company to hire workers internationally without establishing a local entity. Instead, they have a partner who formally recruits, onboards, employs and oversees the local work-force they need. This means that the EOR service assumes responsibility for legal and compliance aspects, while the client company oversees day-to-day operations. Practically this speeds up the time it takes to expand, decreases the costs and risks and better ensures in-country compliances.

7 Reasons Why EOR Services Work

  • 1

    Faster Market Entry: Less time between decision to expand and being operational.

  • 2

    Streamlined onboarding processes: EOR oversight of administration makes recruitment, hiring and onboarding easier for a company.

  • 3

    Risk Mitigation: EOR company assumes majority of labour risks.

  • 4

    Compliance Guarantees: Local expertise ensures compliance with local laws and legal requirements.

  • 5

    Access to Bigger and More Diverse Local Talent Pools

  • 6

    Cost Effective: Company outlay costs are substantially diminished by avoiding having to set up a local entity.

  • 7

    Streamlined Payroll Processes: The EOR partner assumes responsibility for payroll and associated processes e.g., tax contributions and benefits administration.

Challenges with Setting Up a Local Business Entity

On the surface, registering and starting a company in South Africa seems straight forward and cost effective. The reality of launching a business and getting it to be fully functioning comes with overt and hidden operational and capital expenses.

An alternative to doing the work of setting up a company oneself is to use a local specialist, such as an IP attorney. They can assist in ensuring that the right steps are taken so as to better protect a company once it’s operational. However, it is more costly and doesn’t mitigate or help to manage the hidden costs of starting a company.

Hidden Costs of Starting a Company in South Africa

  • 1

    Professional fees, such as legal and accounting fees to ensure local compliance.

  • 2

    Finding office Space.

  • 3

    Equipping an office and associated insurances.

  • 4

    Advertising, recruitment, vetting, onboarding and probationary processes.

  • 5

    Employee turnover and replacement costs.

Complicating Factors of Starting a Company Abroad

Countries vary in their economic and legal processes. This directly impacts the startup requirements and then daily running of a company. To avoid future complications and possible penalties, it’s necessary to get things right from day one of setting. This is why companies looking to fast track their workforce, use an EOR service. An EOR service enables a company to mitigate many challenges, including these 5 common issues with expanding a company abroad.

5 Common Challenges with Workplace Expansion Abroad

  • 1

    Diverse Laws
    While there are laws that are the same, each country still has its own unique laws to navigate when starting a company. These can be tricky to navigate especially when understanding them often requires local knowledge and context.

  • 2

    Tax Requirements
    Tax requirements vary according to what a country adheres to nationally and internationally. In many countries, branches of foreign companies are taxed at rates higher than local companies. However, South Africa has a number of tax treaties with other countries. This impacts exemptions and tax relief possibilities.

    Understanding how to navigate local tax requirements is imperative but often frustrating and time-consuming.

  • 3

    Licencing and Permits
    To start a business in South Africa the following may be :

    • Business Registration.
    • Proof of CIPC Registration.
    • Letter of Good Standing confirming registration with COIDA.
    • Certificate of Acceptability (COA).
    • VFS Appointment Letter.
    • Zoning Certificate.
    • Proof of Financial Support.
    • Intellectual Property Protection.
    • Police Clearance.
  • 4

    Logistical and Operational Requirements
    There are a number of basic requirements which are more complicated to set up and run efficiently from afar. Having a local expert EOR partner can eliminate these challenges.

    • Finding, equipping and maintaining a suitable office space.
    • Understanding the available infrastructure setup and its limitations.
    • Fluctuations in currency and currency transfers which can impact, for example, payroll processes.
    • Supply chain management processes and vendors.
    • Office management and administration of locally based staff.
  • 5

    Local Business Etiquette
    This isn’t as big an issue in South Africa as it is in many other countries. Generally, South Africans are quite astute and adaptable. However, it doesn’t mean that there aren’t nuances which are easier to navigate with an expert advisory partner.

RAEORA EOR Services

At RAEORA we provide a comprehensive and professional EOR service. It’s tailored to each of our client’s requirements so that we can best meet their needs. This means that we assist and are continuously available to support our clients throughout their business expansion.

Practically our tailored EOR service includes finding the best candidates for each vacancy, as related to a crafted job description. We then recruit and vet potential employees, passing on only the most relevant applicants. Our clients interview and select from the best available talent and then we oversee the onboarding and probationary processes. Afterwards we monitor employees and if they arise, oversee any labour related issues. We also invoice and manage payroll systems for our clients.

Key Features of RAEORA’s EOR Services

  • Ensure Legal Compliance.

  • Payroll Management.

  • Administration of Benefits.

  • Onboarding and Offboarding.

  • Oversite of Employee Relations and Support.

  • Risk Management and Mitigation.

  • Provide Global Hiring Solutions.

  • Offer Reporting and Analytics.

How to Find the Right EOR Service Provider

Partnering with RAEORA’s Employer of Record can significantly streamline your international hiring process, reduce risks, and enhance operational efficiency. Our unique EOR service approach is designed to support your business as it fast tracks your workforce expansion and company growth. Contact Us to find out how our EOR services can benefit your offshoring strategy.

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