Get offshore leverage
Freedom! Both for yourself as the employer worrying about payroll taxes, severance, insurance and for the offshore contractor, who gets to serve North American customers and keep their hard-earned money. Welcome to Bangladesh.
Here is what we’ll cover this week:
- Fuel your growth with Bangladesh’s 0% tax offshoring.
- Unlike North America, your offshore Contractors can have unlimited timelines.
- If concerned about tax remittance, get a full-service Payment Processing partner.
Fuel your growth with Bangladesh’s 0% tax offshoring
An offshoring incentive that might blow your mind – in Bangladesh to encourage acquiring offshore funds, the government is allowing teammates, your teammates – to be able to serve us here in North America. 0% tax! No tax. And so that means when you’re paying your teammate $300 USD, $500 USD, $700 USD per month, they get to keep all that money. It’s such a win-win.
Now you don’t have to worry about being tax compliant. Because whether you’re using Upwork or Veem or Payoneer When offshore talent acquires the funds – as part of an incentive program in Bangladesh, they get to keep all those funds. This is why Bangladesh is becoming such an amazing market for marketing roles, customer support, specifically customer support with data.
I highly recommend, as you’re thinking about opportunities, think about Bangladesh. And think about the fact that this is a country that is incentivizing knowledge workers. And the opportunity to grow your marketing team. Sales support customer support your go-to-market support functions behind the scenes.
Bangladesh is incredible. Tax-free incentive market.
Unlike North America, your offshore Contractors can have unlimited timelines
A prospective customer asked me a great question about being tax compliant.
Can I hire offshore teammates? Or are they allowed to be contractors? Because here in North America, I can’t. If they work for us for periods of time or do I give them full-time employment work?”
So, let me back up and explain. All my companies are Canadian entities.
If I were to bring on somebody as a contractor here in North America, they could only remain a contractor for under 365 days in Canada. The CRA (Canadian Revenue Agency) will only allow that contractor to be singularly employed by me for up to one year. If they cross beyond that one-year barrier, suddenly the CRA deems them as employees and they say to themselves, “Hold on a second, you can’t keep somebody as a contractor forever”.
A contractor needs to be able to prove from their end that they are not single-sourced income. And that in fact, your corporation is not asking them to do this for tax-saving reasons. So, of course in many businesses, there have been times where you might have fractional people contracting for long periods of time. But if you have somebody that’s basically doing full-time work and they can’t prove that they have multiple sources of income here in Canada, or here in North America, that becomes a problem.
And so a lot of times as founders, we carry that legacy bias with us. We say, “Well, I can’t have contractors working full-time for me in the Philippines, Bangladesh, India, or South Africa. Well, yeah, you can, because you see, they’re not US or Canadian citizens. They do not have the same employment rights they do here in North America. They do not, you do not have to pay severance or employment tax here in North America. And so you can have fractional or full-time workers offshore. Paying offshore talent as contractors for as long as you’d like from the eyes of the CRA is not in violation of tax for Canadian residents or in the United States.
So this is a huge inflection point for founders. Oh my God. “I never thought that I could scale up my customer success team or customer support, or I could hire all these marketing teammates!”. They don’t have to be full-time, they can be fractional, without the same tax burden that we do here in North America.
If concerned about tax remittance, get a full-service Payment Processing partner
If you’re concerned about your offshore talent being tax compliant, submitting their tax to their local market (for example – Philippines), here’s what I’d recommend.
- Go beyond the normal simple processors. So we use VEEM & Payoneer primarily, but it’s now on the onus of our teammates to file their own taxes.
- Find a payment processing partner. This is full-service for as low as $50/month per person. Tax remittance, payroll, compliance.
This is a fantastic model if you’re used to an ADP or Ceridian here in North America.
Don’t Forget – Benchmark your team against offshore talent.
- What is the profit increase you could expect?
- What is the sales relief/reprieve you could expect to generate the same profit?
Get ready to be shocked!