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
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
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 the UK, 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
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 United Kingdom/full-service Professional Employer Organisation
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.
