Employer of Record Service in Kenya
Are you a foreign investor planning to hire in Kenya without setting up a local entity? Employer of Record service in Kenya lets you employ legally, quickly, and without the cost or complexity of opening a subsidiary.
What is an Employer of Record?
An Employer of Record (EOR) is an organisation that facilitates international business expansion by handling the employment responsibilities for companies planning to hire employees in foreign countries. An EOR service provider hires and pays employees on behalf of another company, assuming responsibility for all employment-related tasks such as payroll, compliance documentation, and other administrative functions.
Benefits of an Employer of Record
Speed
Setting up a company in a foreign country involves extensive paperwork and legal requirements. An EOR expedites this process, enabling foreign companies to employ in Kenya within days.
Cost Reduction
Starting and maintaining a local entity in Kenya is sometimes costly. It involves costs related to legal fees, compliance filings, hiring and more. Using an EOR, foreign companies can avoid these upfront and ongoing costs, transferring the financial burden to the EOR, which manages these complexities on their behalf.
Compliance Oversight
Labour laws and regulations vary significantly between countries. EORs provide global and regional expertise, ensuring that all employment practices comply with the local laws. This reduces the risk of non-compliance and the associated legal penalties.
Cuts Entity Opening Costs
Opening a legal entity in a foreign country involves significant costs, including a setup fee. EOR service providers in Kenya have minimal upfront costs, typically involving a service fee per employee rather than extensive setup fees.
Compliance Costs
Maintaining compliance for a legal entity requires continuous investment in legal consultations and regulatory updates. EORs provide built-in compliance management, leveraging their in-house expertise to navigate local regulations and reduce compliance risks.
Administrative and Operational Costs
Managing a foreign workforce requires HR, finance, compliance, audit, and legal teams. Partnering with an EOR reduces this administrative burden, as the EOR handles payroll, benefits, and other HR functions.
Flexibility and Scaling
EOR services in Kenya offer maximum flexibility for companies looking to scale operations globally. EOR service providers in Kenya give a quick setup process and the ability to test new markets without the commitment of establishing a local entity.
Cost-Benefit Between EOR and Local Entity
Time Required
Setting up a local entity can take months, whereas EOR services can be established in as little as three days.
Capital Requirement
Setting up a local entity involves significant capital outlay for registration, compliance, and other legal fees. A sharp contrast to EOR services, which involve a one-time setup fee and ongoing service fees.
Legal Compliance
Local entities must align with various employment laws and regulations, which can be complex and time-consuming. On the other hand, EORs handle full compliance, reducing the risk for employers.
Taxation
Local entities must navigate various taxes, including income, property, and profit taxes. EOR service fees typically include all relevant taxes, simplifying the financial management for businesses.
Scope of EOR Services in Kenya
Staff Outsourcing and Talent Acquisition
EORs help in staff outsourcing, helping businesses identify and onboard the right talent. Their recruitment expertise ensures that companies have access to the best candidates for their needs.
Employee Onboarding and Contract Management
EORs manage the onboarding process efficiently, ensuring all necessary documentation and contracts are in place for a smooth employment journey.
Payroll Processing
Employer of Record Service in Kenya handles accurate and timely payroll processing, ensuring employees receive their salaries on time, regardless of their location.
Tax Administration
EORs manage tax compliance, ensuring businesses adhere to local tax laws and reporting requirements.
Visa and Work Permit Processing
EORs assist in visa and work permit processing, ensuring employees work legally in Kenya.
Employment Contracts in Kenya
Employment contracts in Kenya must be in writing and clearly outline the salary in Kenyan shillings. Probationary periods should not exceed six months but can be extended for another six months if necessary. Employers can terminate contracts without prior notice, but must compensate the employee for the minimum 28-day notice period.
Working Hours in Kenya
The standard workweek in Kenya is 52 hours, with daily working hours ranging from 8 to 12, depending on the type of work and the sector.
Paid Time Off
Employees in Kenya are entitled to 21 days of paid annual leave after one year of service, as well as 7 days of paid sick leave after completing 2 months of service.
Termination of Service
Employers in Kenya can terminate contracts without prior notice, provided they compensate the employee for the minimum 28-day notice period. Daily wage employees can be terminated without notice.
Visa Requirements for Expats
The main visa type for foreign employees in Kenya is the Class D permit. Employers are responsible for covering visa fees, which vary depending on the type of permit.
Conclusion
Partnering with an Employer of Record Service in Kenya provides your foreign business with a cost-effective and compliant way to hire local talent and expand its operations. By leveraging EOR services, foreign companies can focus on their core activities while leaving the administrative and legal complexities to experts. For EOR service in Kenya, reach out to our experts.
📩 clientservice@afrilinkconsultants.com
📞 +254707280366
🌐 https://afrilinkconsultants.com/
