PEO Service and permanent establishments in Argentina

Employing personnel through the PEO modality is highly beneficial in many aspects, but it is important to carefully assess case by case to avoid the risk of not managing the permanent establishment correctly.

 

Whenever a foreign company hires employees in Argentina through the PEO arrangement and its activity consists of exporting products from their headquarters to our country and the employees only perform activities related to commercial support, then there is no risk linked to having a de facto PE, since the in-country provision of services is going to be used abroad.

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employee-leasing

What is Employee Leasing?

Employee Leasing

The employee leasing method is another new contractual arrangement that has come up in recent years, together with the co-employment arrangement we have previously covered.

In this article we will deal with the definition of employee leasing, the differences between this model and the co-employment model, and the reasons why employee leasing can be a good option to start the internationalization process in a new country.

Origin and definition

The term “Employee Leasing” originated in the United States in the 60’s by three businessmen, but it became popular years later with Marvin R. Selter.

This contractual arrangement started to be used because, during these years, companies with workers under this model were not subject to certain taxes according to the   Employee Retirement Income Security Act of 1974 (ERISA), which increased the benefits for the companies. This Act was amended in 1986: if the temporal worker constituted the 20% of the company’s workforce, he/she must be contracted as an employee.

We can then define “Employee Leasing” as the employment arrangement between two companies where one company transfers workers to another. These workers will be active in the new company for a definite period of time stated in the agreement or they will be able to perform services for an indefinite period.

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Private Equity: How to Make Investee Companies Go Global?

In general, private equity funds are characterized by making available their investor’s resources for a limited period of time (usually less than 10 years) and the investees use them for an even shorter period of time. During this period, these companies need to maximize their profits to cover for the management costs and return substantial profits to their investors.

In order to achieve this, they can choose between two possible strategies:

  • Leveraged finance: consisting of bringing the company into debt in order to buy it for a lower amount and then make the acquired company pay off all or part of the debt in order to sell it with little debt for its total amount.
  • Business exponential growth while using their own capital.

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How to Expand a Business Internationally – 9 Keys to Success

You don’t know how to expand your business internationally? It is not an easy task. In fact, there are companies that specialize in managing subsidiaries in foreign countries in order to raise the probabilities of the success of complex operations like these.

Studies have proved the efficiency these companies achieve. There’s data that should be considered twice before thinking of embarking on this adventure alone. However, we share our 9 keys to increase the possibilities of success when expanding a business internationally.

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