Home Blog

Blog

International Employers: 5 Skills to Look for in Remote Workers in Canada

Posted by Corinne Camara

|

Jun 3, 2019 9:00:00 AM

international-employers-5-skills-to-look-for-in-remote-workers-in-canadaNo matter where in the world your company is based, you want to hire the best people to work for you. For international employers in today’s globalized world, this means finding talented candidates both at home and abroad.

Download "12 Differences to Expect When Expanding into Canada" today!

Technology has made it possible for people to work remotely. This is often an asset for employers who operate in multiple countries. Even if you don’t have a branch office, though, you may still opt to hire remote workers. One of the places you might decide to look would be Canada, especially if you have Canadian operations.

Interviewing and hiring remote workers can be somewhat trickier than hiring people who will work on site. What skills should you seek in remote workers in Canada? Here are a few you should be on the lookout for.

1. International Employers Want Tech-Savvy Employees

Technology is what enables remote work in most cases, so it only makes sense to look for people with strong technological skills. This is especially important since they’ll likely be working on their own most of the time.

This could mean they’ll need to navigate technological issues on their own. While it’s important to provide training for company-specific software and other applications, remote workers with a background in technology will be more independent.

2. Remote Workers Need Good Communication Skills

Another key trait to look for in your Canadian remote workers is good communication abilities.

Communication skills are invaluable in almost any job, whether on site or remote. Given that most remote workers will be communicating via email and instant messages, communication is even more important.

You’ll want your remote workers to be both familiar with communication technologies and able to communicate clearly and according to policies.

3. Organized Workers Perform Better

Another trait for international employers to look for in their remote workers is organizational skills. Some people are self-starters who can prioritize a list of tasks with ease. They’re also good at managing their time, so you can be sure they’re working in the most efficient way possible.

These people make good remote employees, because they’re motivated and productive. People who are less organized or don’t manage time as well will struggle more with the demands of remote work.

It can be difficult to judge organizational skills in an interview, so be sure to ask some questions about these skills. If you can, talk to other employers or colleagues who have worked with the candidate about their work habits.

4. Look for Someone Who Sets Goals

The best remote workers are self-motivated. If you give them a goal, they’ll work towards it. If you don’t, however, they’ll set goals for themselves and strive to reach them.

This trait is important for Canadian remote workers, because it helps them stay motivated and on track. If someone can’t set their own goals, you’ll need to be sure you set out the agenda.

If a worker isn’t goal-oriented, you may find that they struggle with productivity, even when you do set goals for them.

5. Ask for a Demonstration of Critical-Thinking Skills

Critical thinking and problem-solving skills are some of the most in-demand soft skills today. These skills allow your workers to approach problems from different points of view. It also asks them to apply a bit of creativity and reasoning in finding solutions.

Someone who is good at problem solving and critical thinking evaluates an issue from all sides. With all the information in hand, they can recommend a course of action.

This is even more important for remote workers, because they may not be able to ask for guidance or help immediately. Being able to think through an issue and come up with a solution is key.

When international employers look for these five skills in their remote employees, they have a much better chance of hiring the right people.

 blog-cta-12-differences-to-expect-when-expanding-into-canada

Topics: Business Expansion

6 Simple Steps to Expand Your Business into Canada

Posted by Anna Mastrandrea

|

May 27, 2019 9:00:00 AM

6_Simple_Steps_to_Expand_Your_Business_into_CanadaIf your company has been growing for some time or growth has started to slow down, you may be looking for new opportunities. One of those could be expanding your business into Canada.

Download "12 Differences to Expect When Expanding into Canada" today!

Why would a company want to expand?

There are many good reasons. Reaching a new market is prime among them. Growing your customer base, improving profits, and even taking on the challenge of a new market may be other reasons to consider.

International expansion can be difficult, though, which might be holding you back. With these six simple steps to expand your business, profits will be booming on both sides of the border in no time.

1. Do Market Research before You Expand Your Business

The first item on your list should be to undertake market research. If you’re planning to expand to Canada, take a look at the existing market for your products or services. Are there many competitors? If so, what do you offer that will help you stand out?

If there aren’t many competitors, ask yourself why. Is this an underserved market or an unrecognized need? Other factors, such as market regulation, could play a role.

2. Consult with the Experts on Legal Matters

The next step in expanding your business to Canada is to make sure you understand the legal framework. Will you need to structure your business as a branch or as a subsidiary? Which offers you the most tax efficiency?

You’ll also want to ask questions about employment law and environmental law. How will you go about hiring employees? What are your options for payroll?

It’s best to consult with the experts on these matters. They can help you understand the steps you’ll need to take, as well as provide insight on how to navigate the Canadian market.

3. Consider Logistics

One of the most important steps you can take as you expand your business into Canada is to give some thought to logistics. How will you get products to your customers? Do you need to purchase real estate or hire employees?

You’ll also need to consider banking logistics. How will you pay the vendors you work with or the employees you hire? This consideration goes beyond policies, but to the infrastructure you'll need.

If you work with a professional employer organization (PEO), you may be able to leverage their infrastructure to solve some of these issues. 

4. Hire Your First Employee

You’ll need to file some paperwork beforehand, but your next step should be to locate the right talent.

Finding the right employees can be difficult enough in your home market, but finding them in an international market could be a struggle.

Ask your PEO for their expert insights on the labour market in Canada. They may be able to tell you about the market and challenges, as well as hiring regulations you’ll want to pay attention to.

5. Adjust Your Marketing Strategy

Think back to the market research you conducted in an earlier step. Canadians have different expectations, so what worked well in the US or even another country might not translate to the Canadian context.

Adjust your marketing accordingly. A campaign that addresses the concerns and needs of your Canadian customers will be much more successful.

6. Monitor Performance

Once you’ve moved across the border and opened your doors to the Canadian market, it’s important to keep tabs on how you’re performing. Are you complying with Canadian laws? Are your people productive? Are your marketing messages resonating with the Canadian populace?

A PEO can help you keep tabs on some of these performance metrics. If you haven’t considered partnering with one yet, you should get in touch with us today. We can help you expand your business with ease.

blog-cta-12-differences-to-expect-when-expanding-into-canada

Topics: Business Expansion

Why Health Spending Accounts Are a Great Benefits Option for Your Canadian Employees

Posted by Corinne Camara

|

May 22, 2019 9:00:00 AM

Why Health Spending Accounts Are a Great Benefits Option for Your Canadian EmployeesWhen you expand your business to Canada, you’re going to hire Canadians to play a role in your workforce. You may need them to work in store or on site. You may also employ them remotely.

Download "12 Differences to Expect When Expanding into Canada" today!

As a new employer in Canada, you’ll need to adjust to the labour market. This can mean ensuring you’re paying competitive wages.

In many cases, it will also mean you need to review your benefits offerings. This is an especially important point for companies from countries such as the US, where healthcare is vastly different.

If you’re wondering how to offer health insurance to your Canadian employees, consider health spending accounts (HSAs).

Leveraging Health Spending Accounts in a Government-Funded System

Canada has a public healthcare system, which is funded by taxation. The system covers basic medical care, such as seeing a doctor or visiting a hospital. Canadian citizens pay no out-of-pocket fees for these services, since they’re covered under provincial health plans.

There are many gaps in the Canadian system, however, and Canadians do rely on their employers to help them bridge the gap. Dental care and prescription drugs are two costs Canadians pay for out of pocket on a regular basis.

You could consider providing a traditional health insurance plan, but a new, more flexible option has been gaining favour. Health spending accounts help your employees navigate the gaps in the public system. They also have benefits for you.

Benefits for Your Employees

Traditional health insurance plans often come with caps. Your plan might include $500 for dental or $200 for vision care.

Once those limits are reached, the employee must pay out of pocket. Some plans also have deductibles or co-pays, which also mean the employee pays. If a service or medical item isn’t covered under the plan, the employee will have to foot the bill.

A health spending account is different. HSAs are employer-funded, which means you pay into accounts for your employees. You can add a set amount to the account, and the employee then has that dollar amount to spend on medical services and items every year.

There’s no deductible or co-pay. The employee can use the funds immediately. They can also use the funds for the services they need to pay for. If someone needs a root canal one year and then needs physiotherapy after a car accident the following year, they can use the funds in their HSA to help.

With a traditional plan, they couldn’t do that. The root canal might cost much more than the dental benefit, and physiotherapy might not be covered at all.

Benefits for Employers

Some of the benefits of offering health spending accounts to your Canadian employees should be clear. With an HSA, they can get the coverage they need, when they need it.

How do health spending accounts benefit you as the employer? For one, they’re typically less expensive than traditional plans. They also offer better tax efficiency. You can write off the amount you contribute to the HSA, along with plan administration fees. Insurance isn’t always tax deductible.

Once you’ve made the initial contribution, you can also “top up” accounts for the following year. If an employee has funds left over, you may not need to contribute the full $2,000 or $5,000 to reset for the next year. HSAs can also add value to the business.

Of course, the biggest benefit of an HSA is that it makes you more attractive as an employer. It gives your employees the flexibility they want and the coverage they need. In turn, you can expect a better reputation, lower turnover, and happier employees.

Offer HSAs to Your Employees the Easy Way

Working with a PEO is one great way to offer a benefit like health spending accounts to your Canadian employees. Getting started can be as easy as reaching out to the experts.

blog-cta-7-tips-to-help-you-hire-the-right-peo

Topics: Business Expansion

How Do US Companies Pay Taxes in Canada?

Posted by Ray Gonder

|

May 13, 2019 9:00:00 AM

How Do US Companies Pay Taxes in CanadaAs a US business owner, you’re eager to expand to Canada. Like many other American business leaders, you believe the Great White North is the best market for expansion as you continue to grow. After all, both countries have similarities in culture and a strong history of trade.

Download "12 Differences to Expect When Expanding into Canada" today!

That said, you still have to carefully consider every aspect of your Canadian operations. That includes taxation of the business.

How do US companies pay taxes in Canada? The answer depends on different variables.

Determining Residency

Before you know how you’ll pay Canadian taxes, you have to determine residency. Non-resident corporations are treated differently than Canadian corporations.

Generally speaking, if the company was incorporated in Canada and continues to be incorporated in Canada, it is resident. A resident corporation can be deemed non-resident, provided it's being taxed comprehensively in a tax treaty country.

A non-resident company is incorporated outside of Canada. This includes parent companies that operate Canadian branch offices. Subsidiaries are separate legal entities, so they’d be more likely to be incorporated in Canada and considered resident.

The General Rule for Permanent Establishments

If you create a permanent establishment in Canada, you’ll only pay Canadian tax on the income you generate in Canada. This follows the principle of eliminating double taxation for foreign entities.

A permanent establishment includes a branch office, a workshop, or a factory. A permanent establishment can also include employees or agents who may conclude contracts in your name.

Generally speaking, the tax rate is around 25 percent. There are ways to reduce how much tax you pay, such as through tax treaties.

Tax for Subsidiaries and Separate Legal Entities

If you create a separate legal entity for your Canadian expansion, your tax situation will change. How and what you pay depends on the business structure you adopt.

Subsidiaries are considered Canadian operations, and they’re taxed accordingly. If you pay non-residents, including investors, you’ll need to subject those payments to tax withholding.

If the subsidiary does business in other countries, then you can apply for tax relief through treaties in those countries.

Filing for Non-Resident Corporations

If your business is considered a non-resident corporation with a permanent establishment, you’ll need to file and pay taxes in Canada.

You’ll need to file a T2 corporation income tax return, along with Schedule 97 on additional information for non-resident corporations. You’ll also have to submit Schedule 20, Part XIV, Additional Taxes on Non-Resident Corporations.

If you have Canadian employees, you’ll need to register for a payroll deductions account. You must also withhold a percentage of payment for services you render in Canada, as well as withhold on passive income you receive.

Finally, you’ll need to file dispositions of taxable Canadian property if you happen to sell taxable property in Canada.

Payroll withholding will be remitted to your payroll account, and the GST/HST collected will be paid to your business’s GST/HST account. The Canada Revenue Agency (CRA) will collect payments for tax, GST/HST, and payroll withholdings through its different branches.

Filing for Resident Corporations

If you operate a subsidiary or are otherwise determined to be a resident corporation in Canada, you’ll pay tax the same way other Canadian corporations pay it. This means filing a T2, along with other relevant forms and schedules.

Like non-resident corporations, you may need to collect and remit GST/HST. If you have employees, you’ll need a payroll account so you can remit your withholdings to the CRA.

Get Help with Payroll

The best step to take is to consult with the professionals, such as a tax lawyer or a financial professional.

Another option you have to make paying Canadian taxes easier is to partner with a professional employer organization (PEO). We can help you look after payroll, which can make your taxes less confusing at the end of the year.

blog-cta-12-differences-to-expect-when-expanding-into-canada

Topics: Business Expansion

5 Great Reasons Global Companies Employ US Workers

Posted by Corinne Camara

|

May 8, 2019 9:00:00 AM

5 Great Reasons Global Companies Employ US WorkersEven if you’ve expanded into another country before, you might feel overwhelmed by the American market.

Request a quote for US payroll services today!

There are many aspects to consider when you move into the US. As you’re aware, laws are very different, which can cause a tangle of red tape. You need to think about tax efficiencies and corporate structure. Your marketing strategy may need to be tweaked. You might even need to revisit your product offers and packaging.

You also must consider how to staff your business. Is hiring US workers the right move? Maybe you can hire independent contractors to fulfill your needs. Perhaps sending existing employees to the US is the right way forward.

Many successful global companies choose employees over any other work arrangement. Here are a few great reasons you should employ US workers.

1. Global Companies Get Insights from US Workers

US workers can offer you insights into the market and culture. You could hire remote workers from your home country, but if you’re serving the American market, will they connect to Americans in the same way?

Employees from the same cultural milieu can smooth relations with your customers. Your customers will also be able to relate to your workers more easily.

US workers can also provide key insights into the market. They have insider knowledge others in your company may lack.

2. They Provide Geographic Insurance

If you don’t have a physical location in the US, you may see no reason to hire employees on US soil. Operations can run from almost anywhere thanks to today’s technology, and your staff can telecommute.

Much like computer servers should be in geographically diverse areas, global companies should think about having a geographically diverse workforce. This provides insurance for your customers. For example, if complications prevent people in India or the UK from getting to work, your US employees will be on standby.

3. It Creates a Community Presence

Global companies often face challenges being accepted into their new markets. Consumers may see you as an outsider and decide not to buy from you.

One way to approach this attitude is to establish that you care about the communities you operate in. What better way to show you care about a community than by hiring locals.

This helps potential customers put real faces to names. By employing their neighbours, friends, and relatives, you offer local opportunities in the community. In turn, community members are more likely to feel sympathetic and connected to your brand.

Your employees could become your greatest advocates. They may talk up your products or services, as well as recommend you as an employer. In short, US workers can be the best brand ambassadors.

4. It’s Easier Than You Think

You may be reluctant to employ US workers due to legal concerns. You might be worried about tax implications or issues around employment law. How can you let someone go? What are the rules about overtime pay, holidays, or vacation pay? What are the leaves like in the US? What about benefits?

You might think these concerns make hiring US workers too much of a hassle, but it’s not as difficult as it seems. Working with a PEO can help you employ US workers without worrying about the ins and outs of payroll or the tax implications of benefits. The PEO can take on the liability and responsibility for your US workers.

5. It Builds Your Talent Pool

If you’re hoping to continue expanding, then building your talent pool is a good idea.

Employing US workers can help you do just that. When it comes time to expand again, you’ll know you have a strong group of talented individuals to draw on.

Many global companies hire US workers for some of these reasons. It could be a smart move for your business too. If you think it might be a good decision, talk to the experts and discover how the right US talent could help you ensure business expansion success.

blog-cta-7-tips-to-help-you-hire-the-right-peo

Topics: Business Expansion

Should I Hire US Employees or Independent Contractors?

Posted by Anna Mastrandrea

|

May 1, 2019 9:00:00 AM

Should I Hire US Employees or Independent ContractorsYou know you need talented workers to staff your new US expansion. The question for many international business owners is whether they should hire employees or work with independent contractors.

Download our whitepaper "7 Tips to Help You Hire the Right PEO" today!

There are pros and cons to both options. You’ll need to carefully weigh your options in order to make the right decision for your business. Keep these key factors in mind when you approach this vital assessment.

The Costs of Hiring

The first factor almost any hiring manager or business owner looks at is the cost. You likely weigh the costs of hiring and outsourcing at headquarters as well.

In some ways, hiring an independent contractor looks less expensive on paper. You don’t need to pay taxes for them, and you don’t need to pay them benefits. You don’t need to pay them for vacation days or holidays. You also won’t be responsible for supplying material or a workspace.

The contractor handles all of those costs. If you crunch the numbers, though, the picture becomes a little bit muddier.

Contractors may charge higher per hour rates in order to offset their higher operational costs. They may need to carry their own insurance or pay for equipment, and they’ll often pass those costs along to you.

They might also have control over what materials they purchase, and they might not go with the lowest cost item.

Often, hiring an employee is more affordable.

Quality Control

Another risk of hiring independent contractors is the issue of quality. Some contractors do excellent work and are efficient.

However, you could receive subpar work. The contractor may still charge big bucks for a less-than-quality job. They could also try to cut corners by using less expensive materials.

As an employer, you have more say over the equipment, materials, process, and end result from employees. When you work with contractors, you could be at their mercy.

Control of Schedules and Priorities

When you work with an employee, you can ensure your deadlines are met and your priorities are worked on as you request. You can adjust employees’ schedules to make sure jobs are finished on time or you have enough staff on the floor.

When you work with a contractor, you give up most of this control. Contractors usually have more than one client, and they might not prioritize your project.

That could translate into short-staffing on the floor or missed deadlines for your business.

Keeping Consistency in the Business

As you expand into the US market, you’re hoping to build a brand that Americans identify with. If you work with contractors, this can be harder to do.

One of these issues is that independent contractors might not deliver the consistency you need. They also aren’t as invested in your business’s success, so they may not see delivering great customer service or using the best equipment as a top priority.

By hiring and training your own employees, you can ensure a higher level of consistency. Employees are more likely to be invested in your business, and they may stay with your business longer. This allows you to provide continuity to your customers.

Make Employing People Easier

One reason international employers hesitate to employ true employees is because of concerns around employment law and payroll. They don’t understand the ins and outs of the law, and they might be worried they’ll face fines and penalties. By working with a PEO, you can simplify this situation. The PEO takes over all these tasks and the responsibility and liability of employing workers.

On the other hand, international employers hiring independent contractors often misclassify them, and this misclassification can lead to hefty fines and penalties.

Before you bring on an independent contractor, talk to a PEO. Hiring an employee could be the right choice.

blog-cta-7-tips-to-help-you-hire-the-right-peo

Topics: Business Expansion

The 5 Steps to Take after Hiring Employees Abroad

Posted by Karen McMullen

|

Apr 29, 2019 9:00:00 AM

The 5 Steps to Take after Hiring Employees AbroadHiring employees abroad can be a challenge for international companies. You need to hire top talent, but you may not have as much insight into the international job market. Cultural differences can make it more difficult to evaluate education, experience, and fit.

Download our free guide on what US companies need to know about paying  employees in Canada.

Once you’ve hired a new employee, you also need to know which steps to take next. Take a look at this guide. It will help you get your new hires settled in.

1. Adjust Your Onboarding Process for Hiring Employees Abroad

Onboarding technically begins the moment someone contacts you about a job opportunity. How quickly you respond to and how you communicate with them during the hiring process forms the basis of their experience with your business.

Of course, it’s not too late to begin onboarding once you make the job offer. Be sure to adjust your onboarding process to reflect cultural differences in the international market. Everything from how you communicate to who your new employee reports to may need to be tweaked.

You may also need to change the process to accommodate remote workers. A good rule is to introduce the new staff member to other key personnel. If they’re working remotely, try to get everyone together on a video call to say hello and welcome the new hire.

2. Get Them into the Payroll System

You should ensure your new hire is quickly added to the payroll system. There’s nothing more frustrating for a new employee than not getting paid on time because their account wasn’t finalized.

You should ask the employee to forward their details as soon as possible. Be sure those are sent to your payroll team or your professional employer organization, so they can set up and verify the account before the next payday.

Be sure to communicate when the employee can expect to be paid, as well as how you’ll handle any partial pay periods while the account is being created.

3. File the Right Paperwork

One of the challenges with hiring employees abroad is knowing what forms you’ll need to fill out after you’ve hired them. It can be challenging to get this paperwork completed in the designated timeframe. For example, you’ll only have so many days to file Form W-2 with the IRS when you hire an American employee.

Familiarize yourself with the paperwork pertaining to new hires before you bring someone on board. This way, you can hand them the paperwork to fill out before their first day. You won’t have to scramble at the last minute to make sure you have the right forms on file.

If you’re not sure, ask a PEO for help.

4. Set up Benefits

If you offer employee benefits, you’ll need to set them up when you’re hiring employees abroad. You may need to tweak the benefits package you offer in each international market you operate in. For example, health insurance is a bit different in the United States and Canada, since the two countries have very different healthcare systems. Often, offering an HSA is the easiest way to offer benefits to employees while controlling costs.

You’ll also need to file paperwork to get your employee enrolled in your employer-sponsored plan. It’s a good idea to go through the benefits package with new employees, explaining the coverage they have and how claims work.

Again, a PEO can help you find the right benefits package and get it set up for your employees.

5. Establish Expectations

Finally, when you hire employees abroad, be sure to establish clear expectations with them. How often should they communicate with you, and who should they report to on a daily basis?

Streamlining your processes and upgrading your onboarding procedures now will help you create a productive and creative relationship with each employee you hire.

7 Signs It's Time to Outsource Payroll

Topics: Business Expansion

The Wrong Ways to Expand into Canada

Posted by Corinne Camara

|

Apr 24, 2019 9:00:00 AM

The Wrong Ways to Expand into CanadaLike most business owners, you see growth as a measure of success. Expanding into international markets is certainly an indication of growth.

Download "What Are You Leaving to Chance By Handling Payroll on Your Own" Guide

When you begin moving into other markets, though, you’ll need to take steps to secure your success. This is very true when you plan to expand into Canada. There are right ways and wrong ways to go about managing expansion into the Great White North.

Being aware of some of the wrong ways can help you avoid the missteps others have made before you. Learn about these mistakes as you plan your expansion, and you’ll be better prepared.

Don’t Plan to Expand into Canada Rapidly

Perhaps the best example of this misstep comes from US retailer Target. In 2011, Target bought up a number of locations in Canada and opened 124 stores in the span of less than a year in 2013.

The chain ultimately opened 133 stores before closing up shop in 2015. While there were numerous mistakes made in the Target saga, one of the key factors was rapid expansion. If Target had opened a few stores first, it could have focused on working out issues like supply chain management on a smaller scale.

Many companies have used the slow expansion model to conquer the Canadian landscape, and it generally works much better. If your brand isn’t as well-recognized as Target, take heed. Even popular brands can fail if they take on too much too soon.

Study the Culture

There are many cases of businesses experiencing culture shock when they expand to an international market. You merely need to look at the example of Mattel marketing Barbie in China. Chinese culture emphasizes educational toys and skill-building, so Barbie didn’t fare well.

In some cases, the differences in culture are much more subtle. This is certainly the case in Canada. Canadians share many cultural similarities with their American cousins, but that doesn’t mean their culture is the same.

Take some time to study Canadian culture before you expand into Canada. Whether you’re looking to connect with your employees or market to consumers, understanding cultural nuances will go a long way to ensuring your success.

You Ignored Market Trends

British supermarket Tesco tried to expand into the US in 2007, in what was a case of poor timing. Tesco’s messaging about fresh food appealed to US consumers, but the economy was on the brink of the worst recession since the 1930s.

It’s not just the economic indicators you’ll want to pay attention to when you decide to expand. You’ll also want to take a look at the competition. If your market is oversaturated, you’ll have an uphill battle to convince clients to switch to your business. If there’s no competition, are you looking at an underserved market or a non-existent one?

Doing your market research is imperative when you want to expand into Canada or any other market. Don’t forget to look at historical trends as well. If the market is shrinking, you want to know before you head across the border.

You Got Caught up in Red Tape

You hired a Canadian employee, but you forgot to file the paperwork. When it came time to let someone go, you fired them on the spot and didn’t pay termination pay. You aren’t sure about the rules regarding tax withholdings, overtime pay, or vacation time.

Legislation can protect you, your business, and your employees. It can also lead to noncompliance as you expand into Canada. Make sure you’re aware of the employment regulations and how they affect your business.

You can avoid all these mistakes and more when you work with an experienced PEO. If you need a helping hand as you expand into Canada, get in touch with an expert team today.

What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

5 FAQs about Expanding Your Business from Canada to the US

Posted by Stacey Jones

|

Apr 3, 2019 9:00:00 AM

5 FAQs about Expanding Your Business from Canada to the USExpanding a business from Canada to the US is often a logical move for Canadian entrepreneurs. For some people, it may even be a goal.

Download "7 Challenges Companies Face When Expanding into the US" eBook

The US is the nearest international market. It’s also one of the largest markets in the world, and Canada and the US share close economic ties and similar cultures.

As you consider expanding your business, though, you likely have some concerns. This is perfectly normal. Many people ask questions about this very subject. Here are a few of the most frequently asked questions and their answers.

1. How Do You Go about Expanding Your Business to the US?

The first step in crossing the border to the US is setting up as a subsidiary company. Generally speaking, you’ll have the choice of setting up the business as a limited liability company, a C corporation, or an S corporation. You may have a few other options, depending on the type of business you run.

The process for setting up the subsidiary can be quite lengthy, so it’s best to make this decision early on in the expansion process. You’ll want to consider taxation, as each type of business entity is taxed differently. The state you operate in may also affect taxation, as well as the shape your business takes.

You can expect to spend three or four months setting up the subsidiary.

2. Which State Should I Penetrate First?

This is a question each individual business owner will need to answer on their own. That said, the state of Delaware is a popular choice for foreign businesses for a few reasons.

Delaware has a relatively low rate of corporate tax, which makes it more attractive to foreign companies looking to gain a foothold in America. Another reason some businesses choose Delaware is that the state provides a relatively simple set of corporate structure and tax rules.

Setting up in a state like Delaware can help you begin doing business across the US. However, each state offers its own advantages and disadvantages.

You’ll want to consider access to your target market and access to infrastructure and resources. Even the job market can have an impact on your decision. If you’re looking for computer engineers and software designers, for example, you might find an abundance of them in California.

3. How Can You Reduce the Risks of Expanding to the US?

The US market is one of the world’s largest, but it also has a reputation for being difficult to penetrate.

Entering the American market can be a risky venture. It’s only natural that business owners like you would look for ways to mitigate those risks.

One option you have is to work with a professional employer organization (PEO) who has expertise in the US market. This partner can help you navigate the web of US laws, ensure compliance, and even fund payroll. They can also assist with some of the paperwork and other administrative functions.

4. How Can You Determine Whether Your Company Is Ready for the US Market?

Another common question is how to know when it’s right to consider expanding your business into the US. A little prep work can help you determine whether your business is ready to cross the border.

You should conduct thorough market research and competitive analysis. Also, take a look at your finances. Finally, make sure you discuss the decision with a business advisor.

5. Who Can You Ask for Help?

These are only some of the questions you may have as you consider expanding your business to the US. You probably have more. Who can you ask for help?

Business advisors, lawyers, and other corporate experts are good choices. A PEO can be an excellent resource as well.

7-challenges-companies-face-when-expanding-into-the-us

 

Topics: Business Expansion

Global Companies: 5 Challenges to Employing US Workers

Posted by Karen McMullen

|

Apr 1, 2019 9:00:00 AM

global-companies-5-challenges-to-employing-us-workersYour business is on the move, and your next target is the coveted American market. Like many global companies before you, you’re confident that you’re ready to face this challenge.

Download "7 Challenges Companies Face When Expanding into the US" eBook

Opening a US office or starting up operations in the US market means hiring American workers. The American labour market comes with unique challenges. Some of them are cultural, while others are legal.

Whether you’ve just hired your first American worker, or you already have a few US workers on your payroll, keep these five challenges in mind.

1. Global Companies Are at Risk of Misclassifying Employees

Can you explain how the IRS defines a contractor? If not, you’re not alone. Many business owners can’t, whether they’re running an international business or the US is their home base.

A lack of familiarity with American regulations causes some trouble for international employers, putting them at higher risk of misclassifying their workers. The IRS and several states have started cracking down on misclassification in recent years.

Take care that you review the definitions of both 1099 workers and other employees. This will help you avoid misclassification and the associated penalties.

2. State Law Can Vary from Federal Law

Learning the legal framework of any new country is a big task for companies looking to expand beyond its borders. This usually results in a lack of familiarity with an employer’s legal requirements.

In the United States, the situation can become increasingly complex. You’ve acquainted yourself with the federal legal framework, but laws change from state to state.

Minimum wage is one example. The federal government has set a minimum wage, but many states have enacted their own minimums. For each state you operate in, you’ll need to ensure you’re acting in compliance with the law.

States may also have their own laws around working hours for certain industries and even how you terminate employment with an employee. Before you hire an employee in any given state, you’ll want to check the fine print on these points.

3. Payroll Deductions and Remittances to the IRS Are Challenging

Another challenge for global companies is payroll deductions and the remittances they must send to the IRS when they employ American workers.

As the employer, you’ll be responsible for withholding income tax for your employees. How much you withhold from their paycheck depends on how much they earn.

You’ll also need to withhold for social programs like Medicare and Social Security. These withholdings have to be remitted to the IRS on a regular basis, usually in accordance with how often you conduct payroll.

As a result, administering payroll and sending payments to the IRS is a big challenge for most employers. Global companies can get the help they need by partnering with a professional employer organization (PEO) that offers payroll processing services.

4. The Job Market Can Pose a Challenge

Unemployment in the US has dipped over the last couple of years. There are fewer workers on the market as a result.

This situation can pose challenges for global companies who are searching for top talent. Your choice of state can also affect your hiring options. If you’re hiring in an area where the talent pool is relatively limited, you may have to pay more competitive wages.

Learning the job market is often something that happens after you’re actively seeking out new employees.

5. You May Need to Adjust to Employee Expectations

Cultural challenges can crop up in almost any aspect of the employer-employee relationship. Your employees may expect you to offer certain benefits or that they’ll receive certain amounts of time off.

They may also expect that you’ll communicate with them in particular ways.

Obviously, global companies have plenty to think about when it comes to hiring US workers. Getting a helping hand from a PEO can help you navigate the employee-employer relationship with ease.

blog-cta-us-payroll-services

Topics: Business Expansion

Subscribe to Email Updates

Recent Posts

sidebar-cta-12-differences-to-expect-when-expanding-into-canada

Posts by Topic

see all