International payroll, HR compliance, and Employer of Record (EOR) company, Elements Global Services recently announced the launch of its Asian headquarters in Singapore.
The new HQ will enable the company to better support local businesses expanding into other markets, and foreign companies exploring Asia as growth market. It is currently staffed by the director of business development, and the global sales support administrator.
Headquartered in Chicago, Elements has been supporting and managing international business expansion into Asia for five years. Establishing a base in Singapore is necessary as more organisations require the service of a legal employer to aid business set-up in new markets.
While Southeast Asia is becoming an increasingly exciting target market for global and regional expansion plans, a report by Elements titled Expanding Business Across Asia Pacific, revealed key challenges of expanding across the region include understanding regulatory challenges, navigating local tax compliance, high cost of initial set up, and more.
At the same time, different markets pose their own unique challenges. For example, companies face high operational costs in Singapore, tight regulations with regards to opening bank accounts in Hong Kong, and the restriction of foreign ownership in the Philippines.
Employer of Record (EOR) is a term coined by Elements to describe a its unique level of service. Unlike a Professional Employer Organisation (PEO), an EOR can assume all legal responsibilities involved in employing staff on a company’s behalf in a new target market. As a legal employer, businesses are freed up to focus on the strategic direction of global expansion, while still retaining autonomy over hiring, termination, benefits and control of their products and services.
Rick Hammell, CEO of Elements Global Services, said this direct model will allow businesses in Singapore and across Asia to eliminate usual third party costs that add up when managing an expansion.
“It’s not possible to copy and paste an approach successfully executed in another market. This is particularly true across Asia where the legal, financial, tax and HR compliances can be wrapped in complex red tape, and cultural differences are wide, even between neighbouring countries.
“Too many companies misjudge how long it can take to get everything done - even just registering a company can take anywhere from 3-18 months, which doesn’t include other requirements a company must register after an entity is established,” said Hammell.
Aside from quick expansion, Elements also provides a certain level of hand‐holding when it comes to introducing a foreign market and can help companies put an expansion plan in place, including the ability for a business to test the waters in a new market.
“Internationalisation or going overseas is a significant step that could potentially disrupt current business activities. It is crucial for business owners to be fully aware of the impact of crossing borders and analyse if the business is prepared to undertake the expansion,” added Hammell.