Legal Compliance and Global Payroll: What You Need to Know

Expanding your business abroad brings with it a whole new level of responsibilities. After you’ve done your due diligence and chosen the new market in which you will expand to, setting up global payroll services should be of top priority. It should be noted that setting up international payroll services and understanding the issues that arise, does not come without some confusion. One subset that is important to understand in particular are legal issues – therefore, outlined here are the key legal concepts and issues that you may encounter when expanding your business abroad and setting up global payroll.

Who is The Legal Employer and Why Do They Matter?

When setting up your global payroll overseas, a solid legal foundation is of great importance. The legal employer is not only legally responsible for setting up payroll registration within the new market, they will also be required to declare and pay all relevant international payroll taxes.

Ensure that you have a clear understanding of who the legal employer is, by checking the employment contract from your overseas employee. The legal employer should be the legal entity making the employment. It is critical to get this right first time.Any changes to this can not only disrupt your payroll tax filings and social security payments, but will also take substantial cost, time and effort to implement, and can gain unwanted attention from local authorities.

What is a Legal Address and What Importance Does It Hold

As is the case when dealing with taxes and social security, domestically or abroad, when registering as an employer, you will need to provide the overseas authorities with a legal address. The rules for what counts a legal address varies by country, which is where companies, the only international business expansion concierge service, come in.

With specialists on hand to help determine whether a global HQ address or a local in-country address will suffice, the experts at Galvin International can take the guesswork out of this issue, ensuring a smooth expansion.

It is important to establish a compliant legal address, as this is where all official documents will be sent. These include but are not limited to: notifications of filing deadlines, fee payments and any changes in legislation. If you are unaware of, or have not properly set up a legal address, you will not receive vital documents, which can lead to fines and penalties.

It is also important to note that legal documents will be written in the local language. If this is not your first language, it would be wise to have someone on hand who knows the language to translate for you.

How Failing to Prepare Legal Documents Can Delay Global Payroll Setup

You know who your legal employer is, you’ve got your legal address, but you still need to set up your international payroll services. This can take much longer than expected, especially if you aren’t aware of the legal tasks necessary to do so. These tasks can include:

  • the creation of legal directors for new entities
  • obtaining signatures, personal details and ID documents from directors
  • the translation of official documents and notifications
  • obtaining signatures by a legal notary
  • an apostille (an official government certification of id entity)

Prevent delays and any legal issues by anticipating what needs to be done in advance and ensuring that all parties are aware of what these tasks this includes notifying your legal department overseas or any individuals in your companies if you’ll need their assistance and doing so in advance.

Setting up global payroll services does not come without its potential issues, but hopefully this guide has helped clarify the possible legal issues that may arise as you expand your business abroad and what the best solutions to remedy them may be.


Print Friendly, PDF & Email


BizEducator is a leading source of articles and tutorials on latest Business, Finance, Management, Technology, Social Media, Startup, E-commerce and more, which influence the people around the world.


  • Alina Ahmed

    September 2, 2020 - 4:15 pm

    Being a budding entrepreneur, it must be your first and foremost concern to secure your business startup legally and become legally strong. Because there are top Legal Issues for Startups these days that must be considered by every startup.

  • Muhammad Karim

    July 22, 2021 - 3:04 pm

    Really shared an informative article with the readers.

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge