Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.
For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.
For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.
As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.
While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.
A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.
Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Armenia can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Armenia, you have to:
If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Armenia.
An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.
An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.
Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.
At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.
Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:
Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.
Paying employees in Armenia is not the same as paying workers in your own country. Employees have to be paid using Armenia’s employment and payroll standards.
This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.
Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.
After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:
One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.
Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.
Outside of EORs acting as the full admin employer, many also provide remote payroll.
For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.
We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.
Full Time employment is considered 40 hours weekly, and 8 hours daily.
Employees earn 150% of their normal hourly rate for each hour of overtime work. Employees earn 130% of their normal hourly rate for each hour of night work.
Employee (Income Tax)
Salaries are paid on a monthly basis. Payday is the 15th of the following month.
The 13th salary is not required by law.
The minimum annual leave is 20 working days for a five-day working week and 24 working days for a six-day working week.
Extended annual leave of up to 25 working days for a five-day working week, or 30 working days for a six-day working week (in exceptional cases, 35 working days for a five-day working week, or 42 working days for a six-day working week) is given to employees in working conditions, deemed stressful or high risk.
There are 20 public holidays, 14 of which are non-working.
Employees provide paid sick leave to their employees from the 2nd to the 5th day. After the 6th employees are covered by social insurance.
Pregnant employees receive 140 days (70 days of pregnancy, 70 days of childbirth), 155 days (70 days of pregnancy, 85 days of childbirth) – complicated childbirth, 180 days (70 days of pregnancy, 110 days) in case of having more than one child at a time.
In case of premature birth, unused days of maternity leave are added to the days of maternity leave.
The daily benefit is 100% of the insured’s average monthly earnings (regardless of the number of years of covered employment) divided by 30.4 (average number of days in a month).
Fathers can take 5 days of paid leave within the first 30 days after the child is born.
Parents is entitled to 5 days paid leave within the first month of the child’s birth.
In order to terminate an employee, an employer must have sufficient reasons and provide notice.
The notice period is determined by the length of employment.
up to 1 year of employment – no less than 14 days notice
1-5 years employments – 35 days notice
5-10 years of employment – 42 days notice
10-15 years of employment – 60 days notice
Severance pay is determined based on the grounds of termination.
liquidation of the organization/reduction in the number of employees/recovery of the employee in the previous job
an employee for non-compliance with the position held/Long-term disability of the employee/The employee is entitled to an old-age pension/Significant working conditions to change/employee to be called up for compulsory military service –
The probationary period is generally set at three months in the employment contract. Before the expiration of the probationary period, the employment contract can be terminated by notifying at least 3 days in advance.