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.
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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 Montenegro can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Montenegro, 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 Montenegro.
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 Montenegro is not the same as paying workers in your own country. Employees have to be paid using Montenegro’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 8 hours a day and 40 hours a week.
The maximum total work time per week is 50 hours but cannot exceed 48 work hours per week on average within a four-month period.
Employer
Employees receive their salaries monthly.
Not required.
PTO is calculated by the:
There are 14 official 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 98 days of paid maternity leave. 28 days are taken prior to birth and 70 days are taken after childbirth.
See parental leave.
Parental leave can be used after the completion of maternity leave for a duration of 365 days. Each parent is entitled to an even share of the leave.
Parental leave that one parent started using may be transferred to the other parent upon expiry of 30 days from the date when that parent started using the parental leave.
If this is done, the parent who transferred the right to the other parent shall not be entitled to the continuation of the use of parental leave.
None.
None.
None.
To terminate an employee, an employer must have sufficient grounds by virtue of law and provide the required notice of termination.
The notice period in Montenegro is:
A written notice must be given at least 30 days prior to the date of termination of employment unless the employer and the employee agreed otherwise
Severance should not be lower than 3 average monthly wages free of taxes and contributions in the previous semester.
The probationary period is defined by a collective agreement with an employer or the labor contract and shall not exceed six months, except in case of a crewmember of a long-haul merchant mariner, where it may last until the ship returns to the homeport.
