How to pay international employees: Benefits & challenges

Running a company and making it profitable is possible if you hire the best and most capable employees. Sometimes, you can find these professionals overseas, which means you will have to learn new hiring and payroll strategies. Therefore, in order to hire and pay international employees, it is recommendable to learn about PEO, EOR, and payroll outsourcing services.

In this article, you will learn everything you need to know about these effective methods to pay your employees overseas. We will provide you with useful information about the services of a PEO, an EOR, and outsourcing companies. In this way, finding the best employees from all over the world and working with them can be easier for you. Let us observe:

  1. What are international employees and how can you hire them?
  2. What steps should you follow to pay your international employees?
  3. Which are the most recommended ways to pay a company’s international workers?
  4. What factors should you consider when paying your international employees?
  5. Learn about the services of an EOR, a PEO, and a payroll outsourcing company
  6. How many benefits can you get by working with a global payroll partner?
  7. Why should you choose Connect Resources as your partner to pay international employees?

1. What are international employees and how can you hire them?

Due to nowadays’ modern work practices, it is easier to hire employees from other countries without hassle. However, learning the most efficient ways to pay international employees will be essential in order to avoid a potential payroll issue. Below, you will discover some useful tips you should follow in order to accomplish this goal without making mistakes.

But before learning about a suitable payroll solution, you should know about international employees and the process to hire them. In this way, it will be easier for you to understand how UAE companies can hire them and process their payments.

1.1. Hiring process

The process to hire international employees consists of 5 main steps:

  • Firstly, the hiring company needs to get the necessary documentation to hire foreign employees.
  • Secondly, all potential employees must receive a formal job offer, which must contain all details about the position.
  • Then, both parties must sign the offer letter. And the employer can make changes if both parties agree to do so.
  • The employer must make sure that the new employee reads and understands the letter and its provisions to avoid penalties.
  • Lastly, the work contract based on the offer letter must be signed by both parties and submitted to the MOHRE.

1.2. Visa process

The hiring process also involves an essential visa process, in which the potential employee must get a work visa. More precisely, international employees must obtain an entry visa, a residence visa, and an Emirates ID card. Then, they can apply for a work visa by submitting the required documents to the pertinent authorities.

1.3. Documentation

Before hiring international employees, the hiring company must obtain two particular documents; an establishment labour card and an immigration card. All UAE companies can get these documents from the UAE Ministry of Labour (MOL). After getting these documents, the MOL will provide an employment entry visa to allow the employee to enter the country.

1.4. Requirements

Besides providing or having the necessary documentation, there are other requirements that UAE companies and international employees must meet:

  • UAE companies hiring international employees must sponsor them.
  • Potential employees must have professional competence or the necessary academic qualifications that the country requires.
  • All foreign workers have to lawfully enter the UAE and satisfy the conditions of residency in the country.

1.5. Eligibility and criteria

Companies in the UAE and international workers need to be aware of the following criteria:

  • Candidates must be at least 18 years old to apply for a job in the UAE.
  • The hiring company must have a valid license to hire international employees.
  • In the UAE, companies that hire international workers must not have any violations.
  • And the work that international employees do must correspond to the nature of the company that hires them.

1.6. Duration

According to the new UAE Labour Law, all employees (including ex-pats) must be employed on fixed-term employment contracts. And these contracts should not exceed 3 years. But, if both parties agree, they can renew these contracts.

2. What steps should you follow to pay your international employees?

In order to pay international employees, companies in the UAE should follow 4 main steps, which are the following:

  • Determining how to hire international employees: companies can choose between registering an in-country partner or a local entity where the employees live and work. Another feasible option can be using an Employer of Record in the UAE to hire employees. Or you can also opt for classifying your employees as independent contractors.
  • Classifying employees correctly: it is essential to know whether your workers are traditional employees or independent contractors. This legal distinction will help you pay your employees correctly and avoid legal issues.
  • Choosing the services your company requires: the best way to pay your international employees is by having the HR tools you need. Or you can also get an effective payroll outsourcing service. Using an EOR or PEO can also be beneficial for your company.
  • Determining your expansion budget: it will help you determine the way you want to hire and pay your international workers. Remember that you can choose between opening a local entity, using an EOR, or classifying your employees as independent contractors.

3. Which are the most recommended ways to pay a company’s international workers?

As we previously mentioned, there are 3 main ways in which UAE companies can pay international employees. They can choose between these options:

  • Establishing a local entity in the country where their employees live and work.
  • Getting the services of a PEO or an EOR.
  • Classifying their employees as contractors and paying them as such.

3.1. Establishing a local entity overseas

If you desire to hire international employees, establishing a local entity overseas can be a good option. Also, you can opt for setting up a branch office, a representative office, or a foreign subsidiary. Each of these types of entities has its pros and cons, so you have to know their differences. In this way, you can choose an option that fits your needs and budget.

3.2. Using a PEO or an EOR

Among the best options you have, you will find the services of a PEO or an EOR. Or you can also get the services of payroll outsourcing companies in the UAE to pay your employees. In any case, your services provider will handle all payroll responsibilities on your behalf.

Besides, they can also handle other HR tasks, such as hiring procedures, employee onboarding, and more. Moreover, they will help your company complies with local regulations and laws.

3.3. Paying international employees as contractors

Instead of establishing a local entity or getting payroll outsourcing services, you can also classify your employees as independent contractors. That is because the process to pay contractors is different and easier compared to the process to pay employees. Nonetheless, it is important to avoid misclassifying employees in order to avoid a significant payroll problem or legal issue.

4. What factors should you consider when paying your international employees?

Besides choosing an option to pay your employees, there are other things that you should take into consideration. These are some of the most important factors that play vital roles in the payroll process:

  • Currency: the most recommended thing to do is to pay your international employees using their local currency. In this way, it is easier for them to use the money they have earned. By using payroll outsourcing in the UAE, it is easier for your company to pay your employees using foreign currencies.
  • Time zones and working hours: it is essential to track your employees’ working hours in order to calculate overtime, bonuses, etc. Moreover, being aware of their respective time zones will help you understand their working hours as well.
  • Benefits and taxes: every country has different rules when it comes to employee benefits and taxes. When it comes to these elements, they can also vary depending on whether you hire employees or contractors.
  • Payment frequency: employers and employees must agree on this element, which can be weekly, bi-weekly, or monthly. 
  • Labour laws and regulations: it is essential to learn about the labour laws of the country where your employee lives and works. A payroll outsourcing company can help you with compliance affairs too.

5. Learn about the services of an EOR, a PEO, and a payroll outsourcing company

As you may know, there are three main options when it comes to payroll outsourcing in Dubai and the UAE. You can choose between a PEO, an EOR, or a payroll outsourcing company to outsource your payroll duties. They all share the benefit of handling these responsibilities on your behalf and providing security and efficiency.

However, certain differences between these service providers will have a significant impact on your company and its operations. For example, a PEO will be able to perform particular tasks related to the payroll process, including tax declarations, the hiring process, etc.

You should also consider the many benefits that these services can offer to your business. For instance, it makes easier the process to hire and pay international employees and helps you save time. Furthermore, these services can help your company to accurately adhere to the labour laws of the countries where your employees live and work.

6. Benefits you can get by working with a global payroll partner

Just like we mentioned before, outsourcing your payroll duties to pay international workers can bring you several advantages. For example, if you work with a PEO, EOR, or a payroll outsourcing company, you can enjoy the following benefits:

  • Reduce your company’s payroll costs significantly and save time.
  • Ensure payroll and legal compliance in any location.
  • Make your data security stronger with the help of experts.
  • Reduce payroll errors and make your employees happier.
  • Make easier the expansion of your company in other countries.
  • Conduct salary benchmarking effectively.

You can get even more benefits depending on whether you choose to invest in an EOR, a PEO, or a payroll outsourcing services provider.

7. Why should you choose Connect Resources as your partner to pay international employees?

The most professional Employer of Record that you can find in the UAE is within your reach on Connect Resources. Our team provides you with the solutions you need to pay your international workers efficiently and without problems. Besides offering the best EOR services in the region, we can also provide your company with many other options to start improving your payroll processing.

For instance, you can also opt for requesting our PEO services, depending on your business needs and other important factors. In any case, you can customize the services you need to allow us to fulfill your necessities in less time. On the other hand, we also offer the best payroll outsourcing solutions to efficiently pay employees overseas on your behalf.

We can help you make significant improvements in all aspects if you request our many HR services, such as:

Do you need to implement better methods to pay your company’s international employees? With us, Connect Resources, you can get tailored PEO, EOR, and payroll outsourcing solutions to pay your employees. By contacting us, you will be able o easily request what you need or appoint a consultation. You can either call us at +971 43 316 688 or send us an email at contact@connectresources.ae to speak to our team. We are waiting for you!

On the other hand, searching for convenient job opportunities in the UAE can be easier on the Middle East’s best job search portal. Do you desire to find your dream job quickly? Then, make sure to visit thetalentpoint.com and start your search. Additionally, by sending an email with your relevant information to contact@thetalentpoint.com, you will get in touch with our recruiters to facilitate your search.

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