Subsidiary to employer of record

Transitioning from a local entity or subsidiary is seamless with our expert guidance. Let us elevate your global operations with our Employer of Record (EOR) solution.

Switch from a subsidiary to an EOR

If you already have a local entity or subsidiary overseas which employs and pays your overseas employees, you may save tens of thousands by switching to an international employer of record (EOR) solution.

Horizons assists companies to switch from a local entity to an international EOR solution. This saves money, time, and ensures full compliance with local tax and payroll laws.

Why switch from a subsidiary to EOR?

Switching from a subsidiary to an EOR means that the EOR takes over payroll, HR, recruitment, and employee onboarding. It is a full-service HR and payroll solution, leaving you to focus on your core business.

Ongoing Cost Savings

The global EOR takes care of employee hiring, payroll, benefits distribution, and HR duties for your overseas team. This is usually more cost-effective than managing it through your local subsidiary.

Streamline Global Operations

Instead of an entity in each country you hire staff, you deal with just one EOR, who can cover 180+ locations.

Guarantee Compliance

The EOR is an expert in labor and lax laws anywhere in the world. They ensure you are compliant, leaving you to focus on core business.

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Benefits of switching to a Global EOR

There are numerous benefits in switching your international workforce from a subsidiary to an international EOR:

Key takeaways

01. Reduced payroll costs — as payroll and hiring experts, Global EORs process payroll and administer benefits, quickly, and without errors.

02. Reduced compliance costs — no need to engage separate lawyers or tax advisors.

03.One point of contact for your local team (the EOR) — instead of multiple entities/subsidiaries

04. Strategic advice from global HR experts — for when unexpected questions come up.

05. Simplified payments — one monthly invoice for your global team, rather than paying separately in each country.

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How to switch to an EOR solution?

01.

Define & agree to terms of EOR service

First, the client business and Horizons enter into an EOR agreement. This identifies all the roles, and responsibilities and liabilities of the client company and the EOR.

02.

Switch employees from subsidiary to EOR

Any existing employees can be switched to the EOR. Usually, this means ending the employee’s contract with the local entity and beginning a new one with the EOR.

03.

Hires any new workers through the global EOR

Horizons can source, hire, and onboard your global team members anywhere in the world. Through a co-employment arrangement, Horizons becomes the Employer of Record, but your company continues to manage and supervise workers on a day-to-day basis.

04.

Review employees and payroll at any time

Horizons takes care of monthly payroll, including taxes, deductions, benefits and expense reimbursement. Through the Horizons portal, you can review employee status and payroll at any time.

05.

Wind down local entity

With the EOR hiring your local team and taking care of payroll and compliance, you may be able to wind down your local entity or subsidiary. If you need further assistance in this matter, Horizons can support you.

Frequently asked questions

If I switch from a subsidiary to an EOR, can I switch back?

Yes. There may come a point in your international expansion where it makes sense to switch from an EOR to a local entity or subsidiary. If that happens, we can ensure a smooth transition from the EOR to the subsidiary.

If i switch to EOR, do I have to shut down the subsidiary?

Not necessarily. You may wish to use the local subsidiary to enter into local contracts, send local invoices and open a local bank account. At the same time, you can transfer payroll and employment responsibilities to an international EOR.

Does it ever make sense to use a subsidiary rather than a global EOR?

Yes. Where a business seeks to enter into local contracts, for example, a subsidiary may be required. And if the business is large enough, it may prefer to employ staff and manage payroll itself. We can provide further advice on these situations.

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