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Despite the current economic climate there is no shortage of companies seeking to sell their products and services in to the International market. Since the turn of the year, we have seen a resurgence of interest in driving sales activity in the EMEA region and companies seek to achieve this by putting a small number of feet on the street in one or more countries. However, many companies are taking significant risks in the interests of saving money by engaging contractors as opposed to employees.

The ‘test’ to determine if a relationship is one of employment or of independence is similar throughout the world. In general terms an individual is self employed if they are in business on their own account and bear the responsibility for the success or failure of that business. Equally, an individual is employed where they personally work under the control of someone and do not run the risks of having a business for themselves.

The risks of your contractor being deemed an employee include the potential for the ‘employer’ to be liable for backdated holiday, sick pay, social security, overtime and depending on the circumstances under which the relationship was discovered, also unfair dismissal. In addition to these employment related risks, it is possible that the company might also be deemed to have a permanent establishment in the country in which the contractor resides, potentially exposing the revenues of the ‘employer’ (the parent company) to the vagaries of the foreign tax authorities.

All these can be significantly more expensive than the costs associated with getting it right first time. It doesn’t pay to pick the wrong partner when dealing with key areas like HR, Payroll, Finance, international accounting, Compliance, intercompany transfer pricing etc.

It is therefore very essential to team up with an expert. A professional has the necessary expertise to differentiate between situations or terms that can pose a challenge to a newbie entrepreneur. Once you are associated with the right counselor there is no stopping your company international expansion from transforming into a successful venture.

It is not a very pleasant journey when you try to explore the unknown without seeking the assistance of experts. Achieving success in international expansion requires diligence and strategy. Those who have gained enormous experience in this field can provide you with sound advice to navigate safely along the route. The invaluable expertise can save you from incurring costs and suffering losses, and by devoting time to select the right partner you can be assured of guaranteed returns.