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Employ Candidates Compliantly in Luxembourg

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  1. Overview: Luxembourg
  2. Global PEO and payroll
  3. Global HR Compliance
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
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Global PEO and Payroll in Luxembourg

Many companies seek global expansion, but they often get bogged down by the complexity of international regulations. They might not know where to begin or even how to find the right partners to help them navigate this new territory.

Or, they may be operating in a well-established market with no foreseeable near-term plans for growth outside their home country and therefore may not see the point in an international expansion.

Some companies have invested the time and money necessary to create a robust, global infrastructure that meets the demands of their business model. And some companies have been lucky enough to grow internationally by following a few rules of thumb.

It’s not hard to see why so many businesses are drawn to expand overseas. But it’s important to remember that corporate and indirect tax, immigration, employer obligations, and more laws are constantly evolving. What may have been widely accepted ten or even five years ago as a rule of thumb may no longer apply. Permanent establishment laws, for example, are changing rapidly to account for the digital economy and to stem the tide of base erosion and profit shifting.

Acumen’s Global PEO and Payroll solution was designed especially for companies like yours to smooth the way for quick, easy, and risk-free business operations in Luxembourg without establishing a legal business entity.

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What is a Global PEO (Professional Employment Organization)

Global PEO (Professional Employment Organization) companies can help you with these issues by providing compliance support, insurance coverage, record keeping, immigration issues, and more.

When you work with a Global PEO company, they manage your global payroll and taxes so that you don’t have to worry about them. They keep everything filed properly, so local tax authorities don’t come after you for anything. A Global PEO can also ensure that you comply with labor laws so that you don’t accidentally hire someone who isn’t authorized to work in the country where you run operations. They also help your business comply with immigration laws to avoid fines or other penalties from immigration officials. Suppose your business has international clients or employees. In that case, a PEO company will also help you navigate any additional immigration regulations that might apply to those individuals and your entire organization.

5 Reasons Why You Should Use a Global PEO

  1. A Global PEO can expand your business footprint in a new market by providing a single point of management for administrative, HR, payroll, and tax compliance functions.
  2. A Global PEO helps you focus on operating your business and doesn’t burden you with managing payroll, taxes, benefits, and compliance matters across multiple jurisdictions.
  3. Co-Employee Arrangement and partnering with a Global PEO allows for expansion to a new market without costly re-organizations or redundancies.
  4. A Global PEO can help businesses establish a presence in foreign markets by helping them recruit local and global talent, create an international HR structure, and meet all regulatory requirements.
  5. The economies of scale, global reach, and technology resources of a global professional employer organization (PEO) allow businesses to achieve operational efficiencies that positively impact business results.

How Does a Global PEO Work? What Is the “Co-employment” Model?

Organizations that partner with a Global Professional Employer Organization (PEO) enjoy many benefits. By working with a PEO, businesses can take advantage of a co-employment relationship which can free up time and resources that can be better spent on strategic decision-making and business growth. Global PEOs are responsible for payroll, withholding and paying payroll taxes, managing compensation and benefits coverage, and providing HR compliance guidance.

The global PEO becomes a co-employer of the organization’s employees, and PEO shares the employment responsibilities of the client organization. PEOs assume many administrative and HR compliance tasks that businesses would otherwise have to handle, giving business owners and management teams more time to focus on running their companies.

In addition, Professional Employment Organisations can provide valuable services and expertise that businesses might not be able to access on their own. Using a PEO can be a great way for businesses to improve efficiency, save time and money, and gain access to valuable resources and expertise.

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How to Choose a Global PEO (Professional Employer Organization) in Luxembourg?

Several key employment workstreams should be considered when partnering with a global PEO.

  • Tax, employment, and labor law expertise and compliance across multiple jurisdictions
  • Taxation and social security
  • Immigration policy framework and documentation
  • Global payroll, compensation, and benefits administration
  • Communications and global employment management
  • Opportunities to outsource HR function
  • Leverage of technology
  • Global employment process maps, guides, and other supporting documentation
  • Employment contracts and onboarding documents

The first step is evaluating the level of support your company requires globally. Once you understand the level of global PEO support you need, it’s essential to consider what type of employee engagement models are needed to achieve your desired results across multiple locations. Finally, once you’ve determined all of these factors, you can begin to evaluate your ideal global PEO partner – one who will offer all of the global employment solutions seamlessly and efficiently!

Simplifying Global Employment with a Professional Employment Organization

There are many things that can go wrong when you try to find employment overseas. Acumen International can help you navigate these challenges, but it is important to be aware of the potential obstacles you may face.

As a Global PEO, our role is to enable organizations to quickly and easily hire employees in any country. We take care of all the employment-related details so that our clients can focus on their business goals. However, if candidates are unhappy at any stage, the whole arrangement can fail.

When making the decision to move abroad for work, your selected candidates consider a number of factors. The visa and work permit process complexities, currency fluctuations, lifestyle choices and family considerations can all impact their final decision.

“It has become critical for organizations to have an understanding of applicable laws and regulations concerning issues such as minimum wages and benefits, employment standards, immigration and labor relations in each location. A Global PEO can play an important role in helping organizations navigate this complex global employment landscape through offering reliable and country-specific solutions and expert advice on matters related to compliance,” says Nick Ganzha, CEO and founder at Acumen International.

Acumen Global PEO can help you solve the hard puzzle of global employment. As a Global PEO partner, we help businesses meet all of their HR needs while also handling compliance issues that are specific to the international arena. By offering comprehensive global employment solutions and reality checks about the compliance aspects of employing staff across the globe, we can be an important resource for your in-house HR and Management teams.

Our Global PEO&Payroll Client
Employment risks mitigation
Tax compliance & payroll processing
Incorporation costs no need for own
Effort 90% 10%
Coverage 190 countries 190 countries

How Much Does a Global PEO Charge?

Payroll taxes and service fees can be a big burden for employers. Many companies choose to use a Global PEO (Professional Employer Organization) to help with these costs. PEOs typically charge a percentage of the total payroll, including employee insurance fees. It can be difficult to determine the actual costs for these services, especially when some employer taxes are only paid on wages up to a certain threshold.

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Global Payroll Calculator: Accurate Global Employment Cost Estimation

Acumen International offers the Global Payroll Calculator to help businesses understand the compliance requirements for conducting business in a new country. Acumen’s research team tracks developments in 190 countries around the globe. It provides up-to-date data on local regulations related to tax, payroll regulations, benefits, hiring practices, compliance requirements, and other labor-related factors that impact an employer’s bottom line. This valuable information makes the Global Payroll Calculator an invaluable tool for businesses looking to expand internationally.

Global Payroll Calculator helps companies reduce labor costs by providing up-to-date information on hiring, compensation, and tax requirements. It is also an ideal tool for quickly locating employees in any country.

International Global Payroll and Taxation in Luxembourg

Personal income tax in Luxembourg

The personal income tax (PIT) is paid by resident individuals on their worldwide income, by nonresident individuals – only on their income sourced in Luxembourg. PIT is imposed on employment income at the progressive tax rates.

A tax resident is an individual who:

  • is domiciled in Luxembourg, and/or
  • has a customary place of abode in Luxembourg, and/or
  • spends more than six months in Luxembourg

Nonresidents are subject to PIT, solidarity surtax, and social security contributions at the same above rates that apply to residents.​ Expatriate highly skilled employees may qualify for a special tax regime under which tax relief for certain costs associated with expatriation is available. The expatriate tax regime applies for a maximum of five years.

Taxes on corporate income in Luxembourg

The corporate income tax (CIT) is paid by resident companies on their worldwide income, by nonresident companies – only on their income sourced in Luxembourg.

Disclaimer: Any of the above information is subject to changes imposed by Luxembourg laws. To get the latest updates on taxation in Luxembourg and 190 countries worldwide, contact Acumen’s team of global employment experts.

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