Starting or expanding your business to any new market is challenging. It is essential to focus on doing work that adds value to your business in these early stages but navigating the legal and compliance work that comes along with new market penetration can be overwhelming. As a result, payroll services – such as Employer of Record (EOR) services – are a popular choice for new and expanding businesses.
However, the goal of a reliable payroll partner or Employer of Record should not just be about paying employee wages every month – but someone to help you achieve some of the most important strategic goals of any new business.
Read on to learn more about how payroll services can support your expansion beyond just handling the administration.
Test a new market with limited risk
Payroll outsourcing enables your business to try out new markets at relatively low thresholds. If you outsource your payroll operations to an Employer of Record (EOR), they will absorb the majority of your risk in the foreign country.
Because you have minimal legal and official responsibilities, you can easily expand to new countries with minimal resources. The majority of your official obligations as an employer would be taken care of by a third-party – reducing the amount of time you need to invest in activities that do not add value to your business.
On the other hand, if the market isn’t a match for your business goals, you can easily and quickly withdraw without losing much time or investment.
One of the top reasons foreign businesses choose the Netherlands is due to the highly skilled and educated talent available. Moreover, the Netherlands strives to make it as simple as possible for businesses to hire exactly who they need – even if it means hiring non-EU employees to work in the Netherlands.
The Dutch immigration department (IND) requires businesses who want to hire employees from outside the EU to live in the Netherlands to earn the status of an IND recognised sponsor. This signals to the Dutch government that the business is stable enough to support a non-EU in the Netherlands. A recognised sponsor is verified by the Dutch Department of Immigration through a relatively costly and lengthy process.
Dutch payroll companies can enable these foreign businesses to manage their International Deployment by becoming recognised sponsors themselves. You can outsource your payroll to a third-party company with an IND-sponsored status, such as Octagon Professionals, if you don’t want to go through the recognition process. By using payroll services, your partner would handle all the payroll requirements and paperwork on your behalf.
Develop market-aligned remuneration packages
Developing a competitive remuneration or benefits package is a continuous challenge in your home country – and even more difficult in a foreign country with minimal connections, knowledge, or negotiation power. For this reason, an Employer of Record can be a valuable partner to your business – enabling you to offer the remuneration package of the EOR to your local staff.
At Octagon, we understand the importance of people in this early stage of your business development. If your goal is to attract the right people to ensure your success in a new market, make sure to select a partner with competitive benefits – not just the required minimum.
We use our profound knowledge of the players and options in their local market to help your business navigate and make connections so you can make the best deal possible. If you select Octagon as your Employer of Record for the Netherlands, you can offer your employees our expat-friendly pension fund, 100% sickness coverage, etc. as a part of their offering.
Keep up with Changing Regulations
When setting up a new business in the Netherlands, it is important for you as an employer to keep update with constantly changing regulations from the government. Furthermore, the Dutch Labour Law is very protective of employees in the Netherlands and your responsibility as an employer is to ensure the standard conditions of employment. The Dutch Labour Law contains many specifics that are not common in other countries. These can include 8% holiday allowance, sickness coverage, probation period, and pension. To have an overview of these specifics, read more here.
Depending on your business sector, one important aspect to keep in mind is whether you may have to work with a collective labor agreement (CAO). CAO is a written agreement between the employers and trade unions about the labor conditions for all employees. If there is no CAO, you need an individual agreement with your employee in terms of the work conditions.
By outsourcing your payroll activities, you can gain access to a team of experts who understand the complicated realm of government regulations and legislation and can take care of your human resource-related issues.
Meet your Tax Obligations
Labour laws and tax regulations from foreign countries can be indistinct and time-consuming. We understand that new businesses need time to adjust in order to comply with local regulations – Unfortunately, the law does not afford you that extra time.
In the Netherlands, business owners are required to register with the Dutch Tax and Customs Administration (Belastingdienst). Upon employing staff in the Netherlands, you are obliged to pay wage tax and other social premiums to the Tax and Customs Administration on a monthly basis, with payments due by the end of the month following payroll. There are many social security schemes that benefit employees in the Netherlands.
Generally speaking, expanding to a new country involves considerable administrative duties. Meanwhile, labour laws, data requirements, and tax regulations are complicated. Therefore, by partnering with a trusted payroll services provider, tax and compliance experts will take care of your employees’ pay checks, along with accompanying tax withholding obligations and social security contributions.
Find a trusted partner for payroll services and expansion in the Netherlands
When it comes to payrolling in the Netherlands, your success hinges on finding a partner who can meet your unique needs and requirements. You wouldn’t need to have an entity in the Netherlands to employ the staff you need. Meanwhile, your concern can be boiled down to your new establishment in the Netherlands.
As a payroll services provider, Octagon Professionals will handle payroll administration, social security contributions, management of your employment contracts, management of your employees’ pension schemes. With our Intuitive Cloud and App-based HR Portal for timesheets, expenses and submitting leave requests, we ensure the accuracy and transparency of your employees’ data.
Schedule a consultation with us today, and take the first step in being fully compliant with Dutch payroll and HR requirements.
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