May 30, 2023
Expanding business operations to the United States offers exciting opportunities for growth and access to a dynamic talent pool. However, choosing the right expansion strategy that aligns with your business needs requires careful consideration. In this post, we will explore the advantages and disadvantages of utilising an Employer of Record (EOR) like Alariss Global versus establishing a legal entity. By examining various factors such as transfer pricing, tax compliance, employment regulations, intellectual property protection, and cost considerations, we aim to provide insights to help you make an informed decision.
Advantages of Working with Alariss Global
Streamlined Transfer Pricing
When setting up a legal entity, ensuring compliance with transfer pricing regulations can be complex and time-consuming. However, partnering with Alariss Global as an EOR eliminates the need for intra-company pricing, simplifying your transfer pricing practices and reducing the risk of non-compliance.
Simplified Tax Compliance
Local tax regulations can be intricate and differ from country to country. Alariss Global takes on the responsibility of tax withholding and reporting on your behalf, ensuring compliance with local tax requirements and relieving you of the burden of managing complex tax regulations.
Compliance with Employment Regulations
Navigating local employment regulations, including minimum wage, working hours, and benefits, can be challenging. Alariss Global’s expertise in managing employee contracts and ensuring compliance with local employment laws allows you to focus on your core business activities without the stress of managing complex employment regulations.
Efficient Intellectual Property Protection
Protecting intellectual property (IP) in a new country involves complex legal processes. By partnering with Alariss Global, you can delegate the responsibility for registering and enforcing IP to their team of experts, minimising the risks associated with managing IP regulations in a new country.
Comparison with Establishing a Legal Entity
Capital Requirements
Working with Alariss Global involves a service fee, whereas establishing a legal entity requires capital for registration, office costs, and consulting financial/legal experts. Alariss Global offers a cost-effective solution, especially for small GTM teams.
Time to Incorporate
While Alariss Global enables operations to begin within 48 hours, establishing a legal entity typically takes 6-12 months. Alariss Global’s agility allows you to quickly access the US market and start hiring talent.
Legal Compliance
Alariss Global handles compliance end-to-end, including local and federal regulations, legal entity registration, and employment laws. On the other hand, establishing a legal entity requires comprehensive understanding and adherence to multiple legal requirements.
Taxation and Framework
Alariss Global undertakes all taxation aspects, simplifying the tax compliance process. Establishing a legal entity entails paying multiple taxes, such as income tax, value-added tax (VAT), and withholding tax.
Talent Acquisition and Retention
Alariss Global offers expertise in building and managing a remote workforce, ensuring a smooth hiring process. Establishing a legal entity may require navigating unfamiliar hiring practices or engaging multiple talent acquisition agencies.
Local Bank Account Set-Up
Alariss Global eliminates the need for immediate local bank account set-up, saving time and resources. Establishing a legal entity typically takes 3-5 weeks to set up a local bank account.
When considering expansion into the United States, carefully evaluating the advantages and disadvantages of different approaches is essential. Alariss Global, as an Employer of Record (EOR), provides a streamlined and cost-effective solution for businesses looking to access the US market quickly. RemotePad has even independently assessed Alariss Global as a leading US EOR provider. Book a demo today to explore how Alariss Global can simplify your expansion into the US market and help you navigate the complexities of global expansion.
Alariss Global vs. Entity
| Key Considerations | Alariss Global | Entity |
| Capital Requirements | Service Fee (much less) | Registration with local authorities, Opening local bank account(s), Office cost(s), Consulting financial/legal experts |
| Cost of Starting a Small Business in America | $0 | $15,000 – 20,000 USD~ $200,000 yearly maintenance |
| Time to Incorporate (ability to hire in The United States) | Operations begin within 48 hours | 6-12 Months |
| Legal Compliance | Undertakes all compliance, end-to-end | Local regulations, Federal requirements, Legal entity registration, Employment laws |
| Taxation & Framework | Undertakes all taxation aspects | Pay multiple taxes including: income tax, value-added tax (VAT), and withholding tax |
| Talent Acquisition / Retention | Builds and manages your entire remote workforce, taking care of every hiring aspect. | You either deploy a hiring team who are unfamiliar with navigating GTM motions and cultural nuances, or tie up with multiple local talent acquisition agencies. |
| Workforce Size | Quick and cost effective for small, GTM teams across multiple locations. | Best for onboarding a large number of employees. |
| Local Bank Account Set Up | Not Required | 3-5 weeks |
By partnering with Alariss Global, companies can benefit from simplified transfer pricing, tax compliance, employment regulations, and intellectual property protection. The comparison with establishing a legal entity highlights the time, capital, and compliance complexities involved. Ultimately, choosing the right expansion strategy depends on your specific business requirements and long-term goals.
