When expanding into Latin America, consider hiring staff through an Employer of Record in Paraguay.
In the age of information, the focus of the global economy has shifted from industry-oriented to service-oriented. The emerging markets of Latin America are no exception to this transition process and Paraguay is undoubtedly one of these emerging economies, with the highest growth rate in the last decade.
Paraguay’s government is working to open up the market with new incentives to do business. Companies should consider engaging with an Employer of Record in Paraguay to hire staff from abroad.
Employer of Record in Paraguay: hire staff without a local company
Entering a new market brings many opportunities, but also has risks. As a foreign business owner, you have various opportunities to enter a new market. You can decide to incorporate a legal entity in a foreign country, or hire staff in Paraguay without a local company. The latter requires employers to engage with an Employer of Record (EOR) in Paraguay
You can work with a local EOR in Paraguay to outsource some or all of your human resources needs, meaning that you can fully concentrate on your core business.
A qualified workforce and efficient human resources management are indispensable to guaranteeing strong business development.
What is an Employer of Record in Paraguay?
An Employer of Record in Paraguay offers a partnership of co-employment between a foreign entity and a local company. It refers to the outsourcing of certain Human Resource activities such as payroll processing, employees’ benefits or employment contract administration to a third party which is present in a local market and possesses the knowledge about local employment law.
By reaching out to a local Employer of Record in Paraguay, you diminish risk of specific employment regulations of the country. At the same time, you gain more time to focus on your crucial business activities. Your employees formally become a liability for the Employer of Record (EOR) in Paraguay, so your local partner will hire staff for you without a local company.
In this case, the company and Employer of Record partner share responsibility for workplace safety, labor law compliance, and negotiation of benefit plans. The most common services provided by Employers of Record include:
- Payroll processing
- Managing paperwork for hiring new employees
- Assuring compliance with local employment law regulations
- Managing employees’ benefits and health insurance plans
- Managing worker’ compensation and retirement savings plans
What are the benefits of Hiring Staff Without a Local Company?
The models of cooperation with local Employer of Record (EOR) partner in Paraguay are on the increase for hiring staff without a local company for multiple reasons to hiring staff in Paraguay without a local company.
The major benefits of opting for this model are the following:
- Cost saving: Establishing a legal entity can require a lot of time and money. Strong local market knowledge is essential for incorporation as well as Human Resources Management. By involving a local partner in HR issues, you save time and money on all employment-related issues from hiring process up to payroll processing. Employers of Record usually also provide better opportunities for employees in terms of health coverage programs.
- Risk protection: Without the sufficient knowledge of local employment law, you can very easily make a mistake in running your business. In fact, more than 33% of small companies get fines for making payroll mistakes. The Employer of Record in Paraguay guarantees compliance with the local law and thus mitigates the risk.
- Time: If you are a small or medium-sized company, you probably do not want to invest a lot of time into the payroll and employment paperwork. By outsourcing these services, you gain the freedom to focus on your principal business activities and focus on your market expansion.
Labor market demographics
A present problem in some countries in Latin America occurs in terms of the proportion of the population that is ageing; however, in Paraguay the workforce is predominantly young. According to the Latin American and Caribbean Demographic Center (CELADE) for 2019 in Paraguay, the demographic aged 65 years and over represents 6.6% of the total population, while those aged 15-64 (the latter being the average age for retirement) represents 62.2% (equivalent to over 4.52 million people). The population aged 15-29 represents 28.1% of the total, around 1.98 people.
The population of working age in Paraguay between 15-65 years of age is high, offering employers the opportunity to find qualified and developing professionals.
A growing economy
The World Bank highlighted that the Paraguayan economy grew on average to 4.5% in the last 15 years due to good internal dynamics and stable macroeconomic management.
Traditionally, the Paraguayan market has been reliant on agriculture and the extraction of natural resources, as well as its enormous hydraulic potential. However, in recent years, these have become substituted for industrial production and services. As a result, increasing amounts of foreign direct investments which come to this region are in a great extent a reason for this shift.
According to the latest records of the Central Bank of Paraguay (BCP), Foreign Direct Investment (FDI) was US$455.9 million, accumulating a balance of US$6.02 billion. The total amount of foreign investment active within the Paraguayan territory represented 2.02% of the GDP.
Hire staff through an experienced Employer of Record in Paraguay
Cooperating with an Employer of Record in Paraguay company brings significant advantages for hiring staff without a local company. An EOR partner will lessen your administrative burden.
Cooperation with Employers of Record in Paraguay provides the largest benefits for small and medium-sized companies. Also, a smooth expansion into a foreign market is easier and cheaper with an EOR partner.
Biz Latin Hub acts as an Employer of Record in all key Latin American jurisdictions. Our payroll and Employer of Record specialists in Paraguay can support employers with all their hiring needs in the country to make the most of their expansion before incorporating.
Contact us for more information and to receive personalized support.
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