How to Select the Right International PEO for Your Business

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 Any company experiencing domestic growth considers expanding into foreign markets as a way to build on its success–and a professional employer organization (PEO) can be a valuable partner in this process. Your business can effectively grow internationally and gain awareness of relevant global markets by collaborating with an international PEO

Global PEOs are specialists in international expansion, with consultants who have all of the requisite niche expertise and understanding to help companies prepare for foreign market entry.

Factors to Consider When Selecting an International PEO

Selecting a PEO for your international business can be scary. Here are the factors that can help you choose the right Global PEO for your business needs:

Foundation of the PEO

You should know all the details about the PEO, including how it was founded, when, and by whom. If the Global PEO you’re considering specializes in payroll or other HR aspects, it might be deficient in other areas necessary to sustain a competitive global workforce.

Level of Involvement

PEOs can be indirect or direct based on their level of involvement in the processes. Indirect PEOs don’t have their corporate structures in every region, instead of relying on accounting or outsourcing firms to hire your employee. 

It creates an extra intermediary between you and the PEO. As a result, funds flow from you to the PEO, from the PEO to their local partner, and finally from the local partner to your employee.

Direct PEO would have their own companies in different countries, giving them more leverage over each employee’s experience in that region. It will ensure that each employee has a fair experience during onboarding and in the workplace. Working with a direct PEO has the added benefit of removing the middleman and lowering costs.


The company that provides the most expensive services does not always have the highest standard of service. However, it is critical to compare the costs associated with various PEO providers to make a financially and operationally sound decision. The majority of PEOs charge as a percentage of each payroll or as a flat rate per employee. 

PEOs require deposits if you will be late with payments or will not pay them at all. Regardless of whether they got money from you or not, they must pay employees’ salaries. There might be a one-month deposit or a three-month deposit per employee, depending on the PEO. It can have a severe impact on your budgeting calculations, so determine the deposit amount beforehand. 

Industry Specialization

PEOs have in-country entities with adaptable employment experts. So, finding a PEO with the business specialists that an organization requires is a top priority when expanding globally.

A professional employer organization is structured to include specialized professionals to help the client company with problems or goals they want to achieve as part of their global expansion. Due to the nuances of local labor laws and cultural norms, there may be areas of international expansion that are difficult to negotiate depending on the client’s sector. 

Client Rating

Conduct your research when looking for a suitable international PEO for your business. You’ll know whether or not this business is a good match for you. Figuring out the existing and previous clients of the PEO will help you understand what this organization is ready for. 

If they have worked with other clients in a similar industry type as yours, it is an added advantage. It will give you an idea of how your collaboration with them will go. If the international PEO is well-known in the industry, you can hire them without hesitation. A PEO is an extension of your own company, so don’t rush when you decide as it can affect your business. 

Regional Presence

The PEO must have a local presence to ensure enforcement in a foreign market. Every region has its own set of laws governing the employer-employee relationship and its own set of tax codes. That means the PEO must be located in the country where you’re recruiting, or it must be affiliated with an in-country partner who can handle all aspects of workforce management.

Without a local presence, it can be hard for a PEO to track the changes in legislation that could directly impact your business. They may also lack expertise in some aspects of personnel management, such as how to resolve conflicts about time off allowances or overtime limits.

You’re putting a lot of trust in an international PEO, so you can be as picky as you like. Unless you find a PEO with the services you require in the regions you serve, don’t make your decision. There are many capable PEOs out there that can help expand and enhance your business.