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 Bangladesh can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Bangladesh, 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 Bangladesh.
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 Bangladesh is not the same as paying workers in your own country. Employees have to be paid using Bangladesh'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.
Bangladesh has a 40-hour week with Friday and Saturday off.
Bangladesh Labor Act section 102, the working hours should not exceed 48 hours per week.
Overtime is generally calculated by dividing the total salary (including medical and housing benefits) by 208.
Employers then double this number and multiply the result by the number of overtime hours worked.
In Bangladesh, employees receive their salary monthly.
The employee must be paid wages within 7 days after the last day of the wage period.
In Bangladesh, employees who have completed at least one year of service are entitled to two festival bonuses each year.
Each bonus should not be more than the basic salary.
PTO is calculated by the year of service:
There are 17 public holidays.
The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:
Pregnant employees receive eight weeks of fully paid maternity leave before and after the birth.
A medical certificate affirming pregnancy must be provided to an employer to be eligible.
Unpaid maternity leave will be provided for expectant mothers employed with their company for fewer than six months, or for expectant mothers who already have two years.
In Bangladesh, fathers (service holder) will be getting fixed 15 days paternity leave.
Employees may be terminated for reasons of physical or mental incapacity or continued ill-health as certified by a medical practitioner.
Employees can be terminated for misconduct without notice or severance pay, or alternatively, demoted, blocked from a promotion for a year, fined or warned.
If the employee has served at least one year, s/he is entitled to 30 days of wages for each year of service.
Employees with at least one year of service are generally entitled to one month’s notice or pay in lieu of notice, and 30 days of pay for every year served.
Employees who have been convicted of a criminal offense or found guilty of misconduct are not owed notice or severance.
Termination of employment in Bangladesh for other reasons generally requires the employer to provide written notice of 120 days for monthly rated workers or 60 days for other workers, or equivalent pay in lieu.
In Bangladesh, employee has served at least one year, s/he is entitled to 30 days and then 45 days for each year of service above ten years.
Clerical workers are entitled to a probationary period of six months; other workers are entitled to a three-month probation period.