Recruitment is a process in which the resource is to be managed in such a way so that maximum profit could be gained. But hiring resource is not an easy job and that is why most of the companies prefer to hire the services of an umbrella company. Most of us are not familiar with the umbrella company. An Umbrella company in simple words can be said as that company that acts as the third party between the resource and the contractor company. The idea is very simple; the contractor company hires the resource through the umbrella company with a number of reasons.
There are offshore umbrella companies as well, as the name suggests offshore companies are kind of companies that are not based on that particular region or country but are based offshore. Offshore means at distant place. The question raised here is why companies prefer to take the help from an offshore umbrella company while having an option of hiring the resource directly? There are numerous reasons for that. Having recruited through an offshore umbrella company is relatively cheaper than that of normal one. Most of the companies hire these offshore companies so that their liability can be reduced as well.
The major role of an offshore umbrella company is to play a role of an employer; it could be for a fixed period of time. Normally there is always a contract between the client company and the offshore recruitment company. What these companies actually do is they issues invoices for the services they are providing to the clients and in return the client company clears the invoices of these recruitment companies.
There are a number of technical details as well that are to be considered as well. In order to run the business there are some rules that are mandatory to be followed like the taxes and the other expenses. When a client hires an offshore company to deal all kinds of recruitment it is understood that umbrella company is bound to pay all the taxes .In that case it is not a liability for the client company to pay the taxes but there is some flexibility in terms of payments given to the umbrella companies as they can return the taxes after they received the payment of the invoices from the client company.
There is the amount of money charged by these offshore companies from the client company. Sometimes these companies charge with the type of project they are dealing with the answer sometimes they also charge a certain amount of percentage of the clients as well. The biggest advantage that can be obtained from these offshore companies is that there is a huge amount of money could be saved by inducting the resource from offshore. Sometimes is fixed amount of money charged by these recruitment agencies? At times these charges are to be deducted before the tax payment and this strategy is normally used for the marketing purposes. Sometimes there are some variations in the payments as well but it’s solely depending upon the agreement.