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 Kosovo can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Kosovo, 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 Kosovo.
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 Kosovo is not the same as paying workers in your own country. Employees have to be paid using Kosovo’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.
The standard working week in Kosovo is 40 hours. Employees under the age of 18 may not work more than 30 hours per week.
In Kosovo, employee who works a shift beyond their usual hours is paid 120% of their standard rate for the extra hours.
The rate for hours beyond 40 hours per week and for night work is 130% of the employee’s standard hourly rate.
Employees receive 150% of their standard rate for work on weekends and national holidays.
Moreover, the overtime is permitted only when there is an urgent need for the employees to work beyond normal hours and is capped at eight hours per week.
Kosovo employees expect to be paid monthly.
In Kosovo, employees benefit from 4 weeks of annual leave irrespective of whether they are full-time or part-time.
The employer schedules leave but is required to take the employees’ preferences into account.
The employee requests leave a minimum of 15 days in advance and the employer provides a decision no later than five days before the first day of the requested leave.
There are 11 public holidays.
Employees in Kosovo are entitled to 20 days of paid sick leave per year at full salary, paid by the employer.
The employee must notify the employer of their intent to take sick leave as soon as possible, and the employer may require a medical certificate if the employee misses more than three days of work.
Female employees are entitled to:
The final three months of maternity leave, if the mother chooses to take them, are unpaid. The mother may also transfer her right to maternity leave after the first six months to the father.
The father in Kosovo is entitled to three days of paid leave for the birth or adoption of his child and two weeks of unpaid leave, which he is entitled to take at any time before the child turns three years old.
Employers may terminate a fixed-term contract with 15 days of written notice and an indefinite contract with 30 days of written notice.
An employer may terminate a contract only when the termination is justified for economic, technical or organizational reasons, or if the employee is no longer able to perform their job and there is no practical way to transfer the employee to another job or retrain them for a different job.
The employer may terminate a fixed-term contract within 30 days of written notice, and must also provide 30 days of written notice of intent not to renew a fixed-term contract.
The Severance pay is only required in the case of collective dismissals in which a minimum of 20 employees, constituting 10% or more of all employees, are being terminated in more than six months.
Probation period is shall not exceed 6 months.