SHANGHAI – When determining which type of model is most appropriate for managing payroll across multiple countries, employers should take into account the advantages and shortcomings of the three most commonly utilized models.
The first, a country-by-country model, entails contracting vendors locally in each country. The second, a managed model, entails contracting a single vendor (integrated service provider) who subsequently sub-contracts the actual processing on a country-by-country basis. Finally, integrated models entail contracting one vendor able to provide payroll services via vendor employees in each country of operation, reporting through a single-point-of-contact methodology rather than sub-contracting payroll duties to other firms.
Multi-Country Payroll Models:
This article is an excerpt from the January and February 2014 issue of Asia Briefing Magazine, titled “Payroll Processing Across Asia.” In this issue of Asia Briefing Magazine, we provide a country-by-country introduction to how payroll and social insurance systems work in China, Hong Kong, Vietnam, India and Singapore. We also compare three distinct models companies use to manage their payroll across various countries with external vendors, and explain the differences among three main models: country-by-country, managed, and integrated models while highlighting some benefits and drawbacks of each.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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