- Overview: Latvia
- Global HR Compliance
- Global PEO and Payroll
- Work Permit for Hiring Expats via PEO
- Expand without a company set up
- Contractor vs. Employee: Which Is Better?
Global Employer of Record (EOR) in Latvia
Global Employment Services
Businesses expanding globally often face challenges when it comes to compliantly onboarding employees in foreign countries. In most cases, legal compliance requires establishing a legal in-country business entity, a complex, costly, and time-consuming process that many employers are not ready to undertake.
To help your organization legally onboard and payroll a workforce in Latvia, Acumen International offers a global employment solution via our Global Employer of Record (EOR) designed to help you circumvent the legalities of direct hiring, eliminating the need for you to establish a legal entity in Latvia to conduct business there.
What Is an Employer of Record
Different businesses have different needs when it comes to hiring employees. The Employer of Record international talent engagement model may be a good fit for fast-growing tech businesses and startups that need to take on people quickly and easily.
An Employer of Record (EOR) is a business that employs workers on behalf of another company. The EOR arrangement is often used when an organization wants to hire employees in a foreign country. EORs can be used as an alternative to setting up a branch or company in the jurisdiction of employees. This can save time and money by avoiding having to go through the process of setting up a separate legal entity.
Benefits of Global Employer of Record in Latvia
- Fast and compliance talent onboarding
- Payroll administration
- Tax reporting
- Higher talent retention
- Lower costs compared to local entity setup
- Comprehensive benefits packages at competitive prices
- employment contracts 100% compliance
- Employment law and tax compliance
- 24/7 in-country HR support.
Employer of Record (EOR) vs PEO
An EOR, or Employer of Record, is a company that takes on the legal, HR, tax, and compliance responsibilities for employees in any country, including Latvia, where the EOR client does not have a legal entity. This allows businesses to reimagine global employment and expand into new markets faster and risk-free without establishing a local entity in Latvia. A global Employee of Record (EOR) provides expert local guides and employment infrastructure. It can be a cost-effective alternative to maintaining a large HR team. A Global EOR can provide employees with the same or better experience while still being compliant in Latvia.
Global PEO and EOR Comparison
|Employment Model||Co-employer||Sole Employer|
|Permanent Establishment Factor||Can only work with clients who have a registered in-country (state) entity||Facilitates foreign expansion without setting up an entity|
|Key Services||Global employment, payroll, benefits, immigration (visa, work permits), mobility||Global employment, payroll, benefits, immigration (visa, work permits), mobility|
|Responsibilities||Responsible for the entire array of HR functions||Responsible for a portion of HR functions|
|Tax Administration||Depending on local tax regulations may require taxes to be filed under the client’s taxpayer ID.||Files taxes under own Taxpayer ID Number|
|Payroll Funding||Requires advanced payments from the client||Provides payroll funding|
|Local Entity Establishment||Required||Optional|
|Local Entity Ownership||Does not own the entities. Instead, partners with a local or global third-party provider. A PEO does not allow you to hire in countries where you do not have a local entity.||100 % owns legal entities in the country of service. Allows to hire a workforce in other countries without setting up a business entity|
|Liability||Shares responsibilities and liabilities||Assumes all responsibilities and liabilities. EOR hires employees in the new country under its local business entity and takes on all legal risks.|
|Legal Advice||Optional||100% compliance required|
|Global Labour & HR Compliance||Optional||100% compliance required|
|Insurance||It may require the client to provide their own insurance.||Provide coverage for general liability (GL) and workers’ compensation (WC).|
|Benefits||Provides higher quality employee benefits at competitive prices||Provides higher quality employee benefits at competitive prices|
|Employment Agreement||The client must draft and sign the employment agreement with an employee.||Drafts and signs the employment agreement directly.|
|Pricing Structure||– Fixed monthly fee per employee
– Percentage of payroll plus applicable taxes
|– Fixed monthly fee per employee
– Percentage of payroll plus applicable taxes
Triggering Permanent Establishment Risk in Latvia
Employers should be aware of the potential for inadvertently creating a permanent establishment when they use third-party employment models. Permanent Establishments (PEs) are legal entities ordinarily created when local branches are opened for business or when senior managers and salespeople are hired to work in a specific location.
As a business owner, you may feel overwhelmed by the tax implications of expanding your business overseas. However, new ideas exist to reduce complexity and ease the burden on busy entrepreneurs. In this article, we’ll explore some of the best ways to reduce the complexity of tax planning for international expansion.
If you’re thinking about using an Employer of Record (EOR) talent engagement model for your business, it’s becoming increasingly popular. Here’s how it works: a third-party company operates a local entity in each jurisdiction where it offers services. This can be a great way to comply with various laws and regulations.
Here’s how the Employer of Record arrangement works. A new business owner approaches an EOR company to hire a remote worker based in a different jurisdiction, such as Latvia. Rather than the business owner having to establish a new company or register a branch locally, the employee can be employed by our local EOR company. All attendant costs associated with this arrangement are then charged to the client company for a fee. This can be a more efficient and cost-effective way of doing business for both the employer and the employee. Many start-ups like this idea because it gives them the flexibility to focus on getting their business up and running in Latvia.
Employer of Record: Global Employment, Tax Considerations, Liabilities, and Risk Transfer
Global employment compliance is a complex and ever-changing field. The risks and liabilities associated with your employees’ tax considerations, employee privacy, data protection, and IP rights, liability for employee misconduct, employee compensation and benefits, hiring and termination practices and procedures, compliance with labor laws and regulations in the host country and abroad, including those relating to visas, work permits, and immigration status in Latvia.
Compliance with labor laws and tax regulations can be complex because they are often inconsistent from country to country, state to state, or city. As a result of these inconsistencies, employers must ensure that their global human resource policies are consistent with local laws wherever their employees or independent contractors work.
When setting up an international operation, it is important to consult legal counsel or partner with a Global Employer or Record who has experience in dealing with these issues in Latvia so that you do not run afoul of the law by inadvertently violating any employment
When it comes to taxes, there is no universal agreement on how they should be calculated or collected. In many countries around the world, income taxes are deducted from employees’ paychecks before they receive them. This is known as the “withholding” tax. In some countries, employers are responsible for collecting withholding tax directly from their employees and submitting it to the government along with their tax filings. Many countries also have strict rules about when employment-related taxes must be paid and what forms must be filed.
In some cases, these requirements change depending on which country the employee is working in.
Multinational employers should know the tax implications of hiring foreign workers in different countries. Some cases may withhold taxes on employee salaries and bonuses that must be paid to foreign governments. Employers must regularly send this withholding amount to the appropriate state tax authority throughout the year. The employer may also pay income tax on these funds locally or in another country. In addition, many countries impose social security taxes on employees, which can result in double taxation if not correctly managed. A global Employer of Record can relieve the burden of employment tax administration and reporting in Latvia.
Global EOR (Employer of Record) Services: Save Up to 75-80% of Employee Management Cost
|Average Cost & Time||Our Solution *|
|Time to Market||10+ weeks||72 hours|
|Legal Advisors Fees||$ 10 000 +||………….|
|Official Employment & Benefits||$ 20 000 +||………….|
|Incorporation & Liquidation Costs||$ 11 000 +||………….|
|Bank Account Setup||$ 2 000 +||………….|
|Maintenance costs, in-house staff to manage the foreign entity, payroll, and administration.||$ 25 000+||………….|
|The approximate total cost of new market entry**||$ 74 000 +||$ 15 000|
* Per one Employee
** Costs vary from country to country
Why Choose Acumen International Employer of Record in Latvia?
- Global HR compliance and local expertise
- Your trusted Employer of Record partner in 190+ countries.
- One point of contact for all countries
- One global service agreement for current and future countries
- One invoice
- Accurate and timely payroll
- Immigration and work permit sponsorship
- Employment contracts drafting, 100% in-country compliance
- English-speaking global service team and local languages speaking support
- 24/7 client service is available in all time zones.
Spotlight on Latvia
Latvia, a country in Northern Europe, borders Estonia to the north, Belarus, and Lithuania to the south, the Russian Federation to the east, and the Baltic Sea to the west. Latvia is divided into 110 municipalities and nine cities, with Riga as the capital.
- Capital: Riga.
- Population: 1,886,198.
- Local currency: Euro (EUR).
- Industries: The agricultural sector is dominated by cattle breeding and dairy farming, producing grain cereals (barley, wheat, rye, and oats), sugar beets, potatoes, and vegetables. Fishing and forestry are also essential components of the primary sector. Apart from timber, which is primarily exported, Latvia has almost no natural resources. The country has to import all its energy products, mainly from Russia.
Latvia is a significant producer of railway equipment, radios, refrigerators, medicines, timber, and steel by-products.
Employ Pre-selected Workforce in Latvia via Employer of Record (EOR)
Acumen’s Global employment services are designed to provide our clients with professional assistance to meet their global HR needs, such as:
- Global talent acquisition and retention
- Global expansion to help you quickly enter new global markets without legal and HR compliance risks
- Local support for international clients and their ex-pat employees
Businesses desiring to hire local employees should be prepared to pay competitive salaries to attract and retain the most qualified candidates. Acumen International serves end employers and service companies representing international clients as a global employment organization.
Acumen’s Employer of Record (EOR) service in Latvia offers an efficient and inexpensive alternative to direct hire. Our solution allows companies to operate in Latvia and 190 international markets where we serve our clients without registering as a local business entity.
Legally Onboard and Payroll your Employees in Latvia with EOR Global Employment Solution
Reduce risks while expanding your business without establishing your legal entity in Latvia. Leave it to Acumen to hire and compensate your employees on your behalf, so you can focus on growing your business.
Acumen’s EOR global employment solution helps businesses overcome legal challenges by hiring and compensating their local and ex-pat workforce in Latvia on your behalf risk-free and cost-effectively.
Partner with Acumen International, and let us help you handle your global employment and HR needs. You can trust Acumen to handle your workforce management’s global employment and HR details in Latvia to ensure compliance with in-country employment laws and changing COVID-19 regulations.
In addition to legally onboarding local citizens, we can organize work permits and business visa sponsorship for your expatriate team via our Employer of Record and employ them on your behalf once legal permissions have been attained.
With Acumen, you can rest assured that all legal requirements are met for compliant hiring and compensating your local and expatriate employees in Latvia and 190 countries worldwide where we serve our international clients.
Comprehensive Employer of Record (EOR) Packages and Budget-friendly Rates
With affordable packages and budget-friendly rates, Acumen International can offer secure, efficient global HR services to manage Global Payroll, HR & Benefits Administrations for businesses that need international talent but don’t have the resources or skills to handle it themselves.
Our full-service management solutions — from legal talent employment to benefits management, from compliance to payroll and taxation — are tailored around each client’s specific needs.
Acumen International’s unique and integrated approach allows us to offer a comprehensive array of EOR functions, including:
- Processing Immigration requirements
- Visa applications & extensions
- Work permit sponsorships
- Streamline onboarding, benefits, payroll, PTO
- Local labor law compliance
- Audit-proof compliance requirements
- Employee benefit management
- Handling employment contracts, terminations, and compensation
- Processing medical insurance and benefits
- Payroll, including year-end tax statements
- Relocation services & housing
- Benefit management
- Special needs or requirements
- Multi-country employment without limitations
- Handling contract workers and ex-pat workforce management
- Compliant employment or termination within 72 hours.