The Increasing Trend of International Expansion Among European Businesses

Increasing Trend of International Expansion Among European Businesses

Although the business world is still somewhat in a state of flux and coming to terms with a post-lockdown environment, the fallout from the conflict in Ukraine, and continued uncertainty over the ultimate outcome and direction of Brexit, the UK remains one of the most popular destinations for European and international business expansion.

This is because, for enterprises in a wide range of sectors, there continue to be significant benefits to expanding operations into the UK.

The political system, for instance, remains stable (despite the fact that the country has seen four prime ministers in the last five years), and the democratic system of government is one of the oldest and most established political systems in the world.

Business Global ExpansionBusinesses operating in the UK can enjoy access to an internal market of around 60 million people while taking advantage of a liberal economic environment and a relatively enterprise-friendly legislative framework, so it is a positive place in which to grow a business.

Importantly, the UK has managed to maintain its AA credit rating and offers the lowest rate of corporation tax in the G7. There is also a range of tax benefits available to foreign companies who shift operations to the UK.

Further to this, the UK’s extensive and well-established infrastructure makes it easy to transport goods and people and to do business both within the UK and internationally.

Overcoming administrative and HR challenges with PEO services

The UK has long been a hub for global talent across a range of sectors (around 300 languages are spoken), and the labour force is one of the largest in Europe. Around 2.4 million people work in financial and professional services, with London the preferred destination for the best tech specialists from all over Europe.

However, even in a location like the UK, which is the home to a multitude of international businesses and where there is a well-established global workforce, there are nevertheless challenges that enterprises must overcome when expanding into the UK.

Overcoming administrative and HR challenges with PEO servicesHiring workers, paying a workforce made up of a mix of staff and independent contractors, paying salaries and fees in a foreign currency, and managing HR responsibilities across different jurisdictions simultaneously, are just some of the issues confronting businesses looking to expand and begin operations in the UK,

In these sorts of scenarios, the solution for enterprises of virtually any size is to engage the services of a Professional Employer Organisation (PEO), also known as an EOR, or Employer of Record, such as offered here.

Doing so can significantly streamline the HR and payroll processes outlined above and reduce business operating costs, as well as deliver a range of other functions and services that support businesses operating in the global marketplace.

PEO services: the latest business hack

A key advantage of using a UK PEO is that you don’t need to set up a legal entity in order to be able to hire, manage and pay workers. Instead, a PEO hires the staff on your behalf, and takes care of the recruitment, management, payment and other HR functions of your UK workforce.

However, at the same time, this does not mean that you are no longer responsible for directing the duties and tasks of UK-based workers — on the contrary, you still continue to supervise workers in terms of projects, deadlines, specifications, etc.,  just as you would when operating in your home country, You are simply empowering the EOR to take care of all relevant HR and payroll tasks on your behalf.

PEO services - the latest business hackFurther to this, partnering with a PEO means that you have control over the costs associated with hiring, managing and paying workers. Fees are usually charged per each worker that is engaged and managed, which enables overseas companies to hire UK workers in the most cost-efficient way possible.

This is especially important when an enterprise is expanding into the UK or any new territory, as it means you can quickly and efficiently put a workforce together, even in a country where you don’t have a presence or experience, thereby enabling senior management to focus more of their attention on key operations.

You also avoid the costs and hassles of establishing a legal entity in the UK, while a PEO also enables enterprises of all sizes to reduce risk. If you decide that the UK market is not for you. or should things not work out for any reason, you don’t have to deal with the administration associated with terminations — the EOR you engage in takes on this responsibility instead.

A further key benefit of working with a PEO is that you do not need to have experience of UK employment or taxation law, as an EOR will have specialist experience and knowledge of UK laws and systems and will ensure that you are in compliance at all times.

Key Considerations when Choosing a PEO in the UK

There are a number of different options open to any enterprise looking to find the right PEO in the UK.

Choosing the right employer of record to work with is an important part of any successful expansion into the UK, and so it is essential to undertake due diligence and a thorough evaluation of the services of the many different providers in this space.

A key consideration will be the experience and familiarity the EOR has with the UK. This is important because their role revolves around having detailed knowledge of local employment and taxation law, and so it is crucial that they fully understand areas such as these in order to ensure that you remain in compliance.

Key Considerations when Choosing a PEO in the UKCosts will also likely play a role and, as discussed above, the best arrangement is to work with a PEO who offers clear and transparent pricing so that you are charged a flat fee per worker rather than a percentage of payroll and aren’t hit with hidden fees, especially at EOFY.

You should also ensure that any EOR you are looking at has the capability to manage a diverse workforce, i.e., a mix of independent contractors, salaried employees, EOR workers, remote workers, etc., and also has the flexibility that enables you to have workers in different locations and jurisdictions simultaneously.

A further desirable function is that your PEO’s payroll services can be integrated with any existing software tools you already use, as well as providing flexibility as to payment methods and currencies. At the same time, all data needs to be easily accessible, as well as being straightforward to understand and use, and ideally, there should be a dashboard that can be accessed remotely from anywhere and at any time.


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