Often, multinationals or international businesses need to position their employees in a foreign country prior to them setting-up a full-fledged operation. We are referring, for example, to the early contingents having a mission to study the market, infrastructure and understand the terrain before making an actual decision to invest or set-up business.
More often than one believes, such missions may take anything between a month to more than a year. Registering a legal entity for this purpose, without any certainty as to its sustainability, is not the best thing to do. The first and foremost role of the entity would be to employ its staff but still the entity is bound by all the legal, administrative and practical requirements of prevailing laws and business practicality ; even if it is not an operating / trading entity.
We should also consider the legal and administrative incidence on closing or de-registering the business, if ever the preliminary operations reveal a non-interest in pursuing business further. Whilst the process cannot be qualified as complex, it involves, for instance: registering and de-registering with institutions such as tax, social funds, licensing, banks and insurance – to name a few.
How does it work
Employee of Record (EOR) is one of the formulae used for the above purpose. EOR is an entity which is duly registered on the island and serves to host staff of foreign entities which do not have any other purpose (business) except having their manpower physically present. The EOR, being already registered, has its credentials and does not plan to stop its activities once the contracted staff finish their mission.
The EOR is, vis-à-vis local authorities, the designated employer of the staff. It is therefore called to respect all laws pertaining to employment, tax, social contributions and immigration (in case of expatriate staff members). Of course, the ultimate employer (the foreign party) is known and bound under an agreement which protects and indemnifies the EOR for any departure from laws, if not a result of EOR mismanagement. Such agreement would cover timely payment of salaries and employer charges, which are on the side of the ultimate employer.
Being the recognized employer in Mauritius, the EOR will also provide work permit applications and management for the employees, if they are non-Mauritians.
What an EOR does?
In some cases, the EOR will also provide business / desk space to the employees. This would include equipped workstations, offices or other solutions as may be required by the ultimate employer. At Gibson & Hills group, we provide a full coverage which includes:
Payroll management and salary payouts
Tax and social contributions management
Bank accounts for employees
Application for expatriate permits (Occupation or work permits)
Residency permit application for dependent (spouse, children and parents)
Visa application and other formalities
Document translation, authentications and certifications
Workstation, equipped or not
Medical insurance covers
Employee welfare schemes
Assistance to child schooling, during period of employment
Connection to utilities (phone lines, internet, satellite TV and other subscriptions)
Full integration with our own teams for blending and to avoid homesickness
Cultural briefings and tours
More, on demand
The collaboration works around a set fee for service, which varies according to the service coverage required.
EOR v/s own business set-up
If you are of foreign nationality and would wish to set-up business in Mauritius, you are bound by certain specific regulations, more so in terms of business / residence permit rules. This involves, at first, a minimum investment amount and turnover criteria, respectively USD50,000 for an investor permit and Rs4 million (annual turnover). In many cases, whilst the promoter is fully confident on his business (and business model), probably having achieved success in other countries, there is still a large element of uncertainty replicating the same experience in Mauritius.
Such uncertainty does not warrant heavy investment, despite business at the base is just an equation between risk and reward. This situation can be avoided through use of an EOR vehicle. In fact, before engaging into an investment, the promoter may seek temporary legal accommodation through an EOR to host his residency permit while he/she can undertake all preliminary studies (financial, technical, market studies, etc.) in a complete peace of mind and mostly not being dependent on a short-stay visa. Business visas are for a maximum of 120 days in a year, while tourist visas provide for a maximum of 180 days.
The EOR will provide similar permit as for any qualified and eligible employee. Its duration can be anything from 10 months to 10 years. This does not exempt any party from any dispositions of applicable laws, however. Therefore, tax and social charges are still to be remitted to authorities. The main advantage, through an EOR, is cashflow management and, again, the ability to free oneself from blind investment and navigating through uncertainty elements.
Our EOR services
We have been providing EOR services for some years now, catering for employees of different horizons; local or foreign. Our vat experience in this field has widened our perspectives, allowing us to understand, anticipate and plan deployments in the most effective way. We have collaborated with multinationals in different industry sectors, from technology, aeronautics, agriculture, healthcare, science, tourism, service and many more.
Besides, our one-stop solution center for business as well as people allow us to provide a holistic approach to any scenario. We can discern all aspects around setting-up business or relocation to Mauritius. We actively contribute towards solving complex equations, having more than two decades of industry exposure and on-the-ground experience.
If you are considering or feel that an EOR solution appeals to your future project, feel free to contact us at info@gibsonandhills