28th September 2023
Increasing numbers of UK-based recruitment firms are looking overseas in the face of saturated local employment markets, for many the first point of call for guidance and compliance support may be an international umbrella company. However, for staffing companies, ‘international umbrellas’ aren’t really the solution that you’re after.
Here’s why.
Looking back over the past three years there have been some significant developments for staffing firms. From the pandemic and its ongoing economic aftermath to the current war in Ukraine, recruiters have realised that they needed to adapt to survive.
Early on during the Covid-19 crisis many entered ‘survival mode’ and, as their usual markets began to be impacted, an increasing number turned their focus to other geographies to maintain business momentum. We have seen a real surge since then, in staffing companies seeking guidance on international expansion of their contractor recruitment business.
Also, increasing numbers of UK-based recruitment firms are looking overseas in the face of saturated local employment markets, for many the first point of call for guidance and compliance support may be an international umbrella company. However, for staffing companies, ‘international umbrellas’ aren’t really the solution that you’re after.
Here’s why.
In short, they simply don’t exist. How an umbrella company operates varies from location to location. The requirements of an umbrella and how they can be engaged will be different from one country to the next, so an umbrella company operating in the UK, for example, isn’t going to be viable or compliant for contractors operating in Germany, or any other country for that matter.
While there may be in-country umbrella-type solutions that you can utilise on an international scale, it would require the management of multiple vendors and likely also a rather lengthy PSL that needs careful monitoring.
When we also consider that the risk of engaging a contractor in a non-compliant manner can be passed down the supply chain to the recruitment agency, ensuring that your firm has the right in-country solutions in every location you’re operating in or planning to expand into, is crucial and very difficult.
So, if an international umbrella company isn’t a viable route for staffing companies expanding overseas, what is?
Why 6CATS is the compliant option
At 6CATS International, we recognise the importance of providing fully compliant, transparent and streamlined contractor workforce solutions. It’s at the heart of everything we do and we are dedicated to providing our clients with the highest levels of service whilst offering complete compliance assurance.
Crucially, we don’t offer ‘blanket international solutions’ as they simply cannot be compliant.
Instead, we provide tailored contract workforce management solutions, in more than eighty countries, that are relevant for the individual contractors engaged and the geographies targeted which are also up to date with the latest international and in-country compliance developments.
All 6CATS solutions are based on local legislation in the country of operation. Before finalising a solution in any location, our expert team will carry out comprehensive research to understand local legislation, licensing requirements, available employment structures and all other country-specific requirements.
Our solutions are created based on legal necessities and maintain the highest level of compliance, protecting every party in the contractual chain from compliance liabilities. In fact, in order to give extra reassurance, when their contractors are using our solutions, we fully indemnify recruitment businesses and end users from any tax compliance liability.
We do not operate any loopholes or ‘grey’ solutions meaning we can be refreshingly transparent with our contractors and clients.
What you get instead of an ‘international umbrella company’
While you won’t get a one-size-fits-all contractor engagement model from 6CATS (as there is no compliant model that fits this brief at all), what you will get is complete confidence that your firm and its contractors are operating compliantly.
All of the businesses we work with have access to:
• Dedicated Contractor Care Consultants
• Local tax compliance & invoicing
• Legal/Employment compliance & immigration support
• Insurance provision & contract administration
• Solution development
Safeguarding your future
International markets have the potential to present a wealth of opportunities for recruitment businesses to engage contractors. Demand for specialist, temporary resources continues to grow across the globe. However, it really is critical that you seek the right source of information to eliminate the potential risks to your business.
Operating non-compliantly could lead to potentially hefty fines and criminal charges. So, if you’re planning to expand your geographical market, don’t look for an international umbrella company, look for experts with global and local knowledge and connections.
Our friendly and approachable team is always on hand to offer support and advice. With a team of some of the most experienced professionals in the sector, we have a wealth of knowledge to draw on and can advise on most countries around the world.
Why not contact us today to find out how we can support your international expansion?
And don’t forget to follow us on our social media channels to stay ahead of the latest international tax developments.