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 Uzbekistan can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Uzbekistan, 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 Uzbekistan.
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.
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.
Paying employees in Uzbekistan is not the same as paying workers in your own country. Employees have to be paid using Uzbekistan's employment and payroll standards.
A standard full time work week is 40 hours or 8 hours per day.
Overtime and work over a rest day are paid at the rate of 200% of the regular pay.
Payroll cycle in Uzbekistan is Monthly.
Employees are entitled to 15 working days of paid annual leave.
For disabled or employees under the age of 18, annual leave is 30 working days.
There are 9 public holidays.
An employee is entitled to up to 4 months paid sick leave or 6 months if the employee suffers from Tuberculosis. A medical certificate must be provided.
Maternity leave is 126 days and starts 70 days before the expected birth of the child and 56 days after. If there are multiple births or complications, maternity leave can be extended by an additional 14 days.
The employee is entitled to 100% of their regular pay.
There are no provisions in the law regarding paternity leave.
Adoption leave - 56 days for the adoption of 1 child and 70 days for multiple adoptions.
Termination of an employment agreement initiated by the employer must be for just cause (I.e. performance, reorganization of the company, or gross misconduct). Notice of termination must be submitted to the employee in writing and in turn, signed upon receipt.
If the employee is a member of a trade union, the employer must first receive approval before termination. Once approval is received, the employer has one month to proceed with the dismissal of the employee.
Notice period depends on the reason for termination:
Payment in lieu of notice is permissible.
1 months salary