While there are generally four ways of employing people across borders, not all are legal or sensible. Here is an overview of each way to employ a worker in Ireland, outlining the potential cons.
- HQ country employment & payroll
What it is: While the person is in Ireland, they are employed and payrolled directly by the company’s HQ entity.
Cons: This may appear attractive, but it generally isn't legal in the long term.
HQ payroll won't be possible if the person is not a tax resident in the HQ country.
- Independent contractor agreements
What it is: People are locally registered as sole traders or limited liability company owners in Ireland and invoice for their work. There is no direct employment relationship.
Cons: In Ireland, this is not a compliant or legal way to engage full-time workers who work solely for your company. There will be challenges in attracting and retaining talent.
- Direct local employer setup
What it is: The company sets up as a fully-compliant local employer. This often involves setting up a local entity and local tax registration.
Cons: Expensive, time-consuming, high-level of complexity. Unknowns around how obligations and costs will evolve over time. There will be a need to stay on top of changes in regulations.
- Partnering with an Employer of Record Ireland /full-service Professional Employer Organisation
What it is: Employment is handled by a platform that specialises in employing people on behalf of customer companies. The Employer of Record helps to hire and pay employees.
Cons: For some countries, the ongoing costs may be higher than direct employment. Some education is needed to inform employees about how the employment relationship will work.