One major roadblock will be payroll in Brazil. If you’re incorporated locally, you need to ensure that your local entity is legally capable of running a payroll. Even if you are considering local incorporation in the future, a local payroll provider reduces your liability in the interim. Further, a management company accomplishes all of the same payroll responsibilities, alongside numerous other specialist services that reduce your liability even more.
Local payroll in Brazil
Your employee will need to get paid in Brazil, but establishing a local payroll can be extremely difficult.
Even if you already have a local company, you need to confirm that it’s appropriately registered to run a payroll, and to file and deduct taxes. This requires sufficient administrative staff who are up-to-date on all tax requirements in Brazil.
Setting up a payroll in Brazil
To set up a local payroll, your company will need to incorporate in Brazil. This will be another issue necessitating extensive research; how long will incorporation take for your company, and how much will it cost? Depending on your budget and timeframe, a temporary project may not justify local incorporation. In that case, it’s more efficient to outsource the administration to a local payroll provider.
Even if you plan on incorporating locally, using a payroll provider can present an extra security measure while you complete the process. This enables you to second employees onto a work site immediately, without exposing your company to unnecessary risk.
Local payroll providers versus management companies
Management companies provide the same services as payroll providers, in addition to several other key services that a payroll provider cannot. A management company offers tax specialisation and runs payroll, but also sponsors Work Permits and takes over legal liability for your employee. It provides a single solution for multiple issues associated with project work in Brazil, streamlining co-employment and protecting your company from risky oversights and missteps.