Due to the ongoing crisis in Ukraine, employers are considering alternative employment options within Europe. Envoy has created a list of potential locations and general considerations for employers who seek to establish new corporate entities in Europe.
The existence of a legal entity is often one of the first considerations to be made when reviewing the eligibility to relocate foreign national employees into a new location. In many jurisdictions, a legal presence is a requirement to sponsor work authorization for a foreign national employee, either temporarily or permanently.
Below are the timelines and high-level review of the efforts required to establish an entity in several desired locations in Europe. The timelines provided below are only an estimate and may vary depending on a range of factors.
It can take approximately four to five months to establish a holding company in Austria. Once the holding company is established, employers are permitted to sponsor work and residence permits in Austria levering this employing entity.
In Belgium, some of the most common ways to establish a new entity include setting up a company, branch or subsidiary. It can take approximately one month to establish a new company or branch and around one week for a subsidiary to be completed. Once an entity is fully established in Belgium, foreign national employees can be offered an employment contract.
The cost of establishing a new entity in Belgium will vary depending on the type of entity being established, the number of employees and the region in Belgium that the entity is established.
In order to sponsor a foreign national employee in Bulgaria, an entity needs to be established in the country. Some of the steps for establishing a business entity in Bulgaria include providing a business operating address and registering the business at a tax office.
The total process can take approximately one to two weeks. Fees will vary depending on the size and complexity of the entity being established.
To establish a new entity in Croatia, a working permit will need to be obtained and the entity will need to secure a physical office space. In addition, the share capital of the company will need to be at least kunas 200,000,00 or approximately EURO 27,000.
At least three Croatian citizens will need to be employed long-term on a full-time basis at the company, branch, or representative office of the foreign company. These employees cannot be procurators, members of the management or supervisory board and must meet a salary requirement of at least the average gross salary of Croatia in the past year.
The entire process of establishing a new entity in Croatia can take around four to five weeks and fees vary depending on the type of entity being established, the number of employees and the location in which the entity will be established in Croatia.
The Czech Republic allows several types of businesses to hire foreign national workers, however, it is recommended that a limited liability company be established. There are no mandatory nationality ratios or limitations to hiring foreign workers in the Czech Republic.
The total process of establishing an entity in the Czech Republic can take around one to two weeks and the fees will vary depending on the type of business established, the region of operation and the total number of employees.
Any type of legal entity in Hungary is permitted to sponsor work permits for foreign national employees. Generally, a branch office or a limited liability company are the preferred entity types for employing foreign national employees. Business registration can be completed via a video-conference call and the founders of the entity are not required to be in Hungary during the establishment period.
It takes around four to five weeks to establish an entity in Hungary and fees vary depending on the type of entity established and the cost of hiring an accountant or tax advisor when establishing the entity.
In the Netherlands, a legal entity must be registered with the Dutch Chamber of Commerce. Any legal entity can employ and sponsor foreign national workers, however, limited liability companies (B.V.) are the most common type of establishments. Depending on the type of entity established, different work authorization categories can be leveraged for foreign national employees.
Timelines vary depending on the type of entity being established and the pathway used for employing and sponsoring foreign national employees. Fees also vary depending on the type of entity established and the tax and labor counsel fees.
It takes around eight to 10 weeks to establish an entity in Poland, but this timeline may vary depending on the amount of time needed for document collection. Fees also vary depending on the type of entity established.
Poland does allow employers of record (EOR) to sponsor foreign nationals. Please contact Envoy Global to discuss if using an EOR is the best option for your company.
In Serbia, an entity must be established in order to sponsor foreign national employees. Some of the application steps include obtaining a business operating address and completing registration at a Serbian tax office.
The total process can take around one to two weeks and fees vary depending on the complexity and type of entity being established.
The most common sponsoring entities in Slovakia are limited liability companies. In Serbia, employers have the option to establish a company or purchase a pre-existing company. The fastest route to begin sponsoring foreign national employees in Slovakia is commonly found to be buying a pre-existing entity. The total process for establishing an entity in Slovakia can take approximately one to two months.
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It is important for all employers to note that entity establishment is only one consideration when contemplating opening a new entity. It is also important to consider: broader business objectives and existing structure; payroll set-up; corporate and personal tax; local employment law; registration requirements; medical coverage; infrastructure and personnel security; and employment of host country citizens, among other related points.
For additional resources on the crisis in Ukraine, please visit Envoy’s Global Mobility Resource Center for the latest updates and information. For more news and insights from around the world, please sign up for Envoy’s Global Blog Digest, emailed to you every Wednesday morning.
Content in this publication is for informational purposes only and not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult an attorney at one of the two U.S. Law Firms working with the Envoy Platform or another qualified professional. On non-U.S. immigration issues, consult an Envoy global immigration service provider or another qualified representative.