Erika Collins Discusses Cross-Border Expansion With the International Bar Association

In the International Bar Association’s article, “In-house teams eye risks and opportunities as cross-border expansion increases,” labor and employment partner Erika Collins shared advice for companies seeking to expand internationally.

Collins told the publication that the biggest legal, compliance and regulatory priorities a company must deal with during expansion depends on what the nature of their business is.

“Often local law will permit this, but the company will still need to register with the tax authorities and social security. This can be very complicated, which is why many companies will elect to hire an independent contractor or go through a third party. Often the “independent contractor” is really a de facto employee so there are inherent risks of taking this approach which will reveal themselves inevitably when the company goes to terminate the individual,” Collins said.

Collins also highlighted that companies also need to consider whether the employee/independent contractor’s activities will rise to the level of ‘doing business’ in the country, which would create a “permanent establishment” and subjecting the parent company to corporate taxes.