4 benefits of using an Employer of Record in Brazil

Thinking of hiring in Brazil?

There are plenty of incentives. Brazil, the biggest country in Latin America, is a member of MERCOSUR, an acronym for the Mercado Común del Sur (Southern Common Market). As the regional trade agreement founded by Argentina, Brazil, Uruguay, and Paraguay in 1991, one of the leading benefits of which is increased access to larger markets. By eliminating tariffs on goods traded within the member states, companies can sell to a broader market at a lower cost. Brazil’s rapidly growing economy is the third-largest, not just in Latin America, but in the Americas overall. It is one of the fastest-growing technology markets in the world, and is home to over 214 million people – with a large talent pool of highly skilled workers.

The decision to set up business operations in a new country can often be stressful, pricey, time consuming. Plus, you may be hindered by timeframes, or limited capital. You need a solution that allows you to hire employees in Brazil compliantly, without establishing your own in-country entity.

You may wish to solve your quandary by using an Employer of Record (EoR). Using an EoR comes with many benefits, when seeking to hire a workforce in Brazil. Here are the top four.

1. Established, in-country presence

An Employer of Record (EoR) is a business already established within Brazil. So, you can hire staff compliantly through them, without having to set up your own entity in the country. Working with an EoR will result in minimising the costs often incurred by new businesses, and eliminating the overheads associated with setting up a business – such as initial set-up costs, ongoing entity management, and closure fees.

2. Local knowledge and compliance

If you hire thorough an Employer of Record, you’re guaranteed that your staff in Brazil are employed in line with all local laws. Brazil has strict regulation regarding misclassification. So, misclassifying your employees could lead to large fines, back taxes, legal costs, and other severe penalties. The Employer of Record’s experts will ensure that labour laws including payroll tax, social security, onboarding, and probation, leave entitlements, and termination periods are completely adhered to and taken care of.

Local employment regulations include employees in Brazil being entitled to thirty days’ paid leave after twelve months of service; working holidays requiring 200% extra pay; and employers being eligible to pay sick leave at 100% of the worker’s salary for the first fifteen days of illness. All of which will be second nature to an Employer of Record’s local experts, and will be dealt with smoothly. An Employer of Record will also continuously monitor any changes or updates to local regulation, will apply these updates and, in cooperation with your HR and accounting team, will alert your workers of any changes.

3. In-country support

Using an Employer of Record means that your workers in Brazil have a contact on the ground, who they can go to with any issues relating to payroll, HR, etc. This guarantees you that your employees will be sufficiently supported while working in Brazil.

4. Speedy staffing

If you use an Employer of Record in order to hire your employees on the ground in Brazil, this means that you can begin hiring your staff much sooner than if you go through the motions of setting up your own business there. Most Employer of Records estimate a fast timeline of roughly one month for the worker’s on-boarding process – from initial enquiry, to getting them registered with payroll and getting contracts sorted and signed.

An Employer of Record(EoR) service ensures that you retain day-to-day management of your employees in Brazil, while the Employer of Record handles all necessary local employment and HR tasks – bringing peace-of-mind of compliance and cooperation in every aspect of your staff’s employment. If you’re interested in hiring in Latin America, contact our team of experts to find out how we can help.