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info@hrsolution.ag
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9100 Herisau Switzerland

Virtual Company

While working in the field of supplying HR companies with staffing solutions for many years, we have coined a phrase: virtual company. The idea is that of a Representative Office. This solution is not well known but HRsolution has been working with it successfully for quite some time and has thus solved how to directly employ your new team member.


A company wants to enter a new market in a foreign country where they do not have a legal entity. They first want to test the market and see if it is worth permanently expanding into this country. They do not want to immediately have a legal entity in the country as these can be quite costly and bring with them the necessity of bookkeeping, taxes, end-of-year reports etc. However, they do not want to have their employee hired by a staffing agency and loaned out to them – many employees also prefer to be hired by the company directly and to not have to go through a staffing company to be able to work for their desired employer.


If this is the case, HRsolution offers the virtual company: we register you as a foreign employer with all the required authorities. You receive your tax withholding number and we arrange for all social security payments to be made on your behalf.


Advantages of this solution are that no legal or taxable entity is created. Thus the initial cost is much lower than setting up a legal entity. The employee will also receive his employment contract directly with your company and so can have a company email, company business card etc. Disadvantages of this solution are that the employee cannot sign contracts, issue prices etc without Head Office approval. The employment contract should reflect this. If this is not done, then authorities would see this as a taxable branch office. As a matter of fact, a permanent office should be avoided as this would be an indication of a branch office and would then be taxable. At HRsolution we guide you through this process and will help you arrange everything to make the on-boarding of your new employee as easy and as smooth as possible. And should you after a few months or years decide to establish a legal entity, HRsolution can also help with this.


Give us a call or send us an email to get in touch with us. We can provide you with the solution to your problem.


Employer of Record

An employer of records (EOR) is a company that legally assumes the responsibility for an employee, for paying the employee’s taxes, social securities, benefits etc. while the employee works for another company. The employer of record serves as the legal link between the employee and the client company.


In short – HRsolution GmbH hires the candidate you want. All legal obligations of an employer such as payroll, social security payments, taxes etc. are taken care of by us. HRsolution then assigns the employee to work full-time for your company. To be able to deliver this service in Germany, you need a license which is given to you temporarily by the government. After 3 years of having a temporary license, a vigorous screening of your accounts, social security payments, employee payments etc is conducted by the German government. If all is found to be in order and compliant with national laws, you are granted a permanent license by the federal agency for employment (Bundesagentur für Arbeit). HRsolution has owned this license for 17 years now.


Situations in which using an EOR solves your problems:

  • You are a foreign company and want to employ someone in Germany. You do not have a legal entity in Germany, nor do you want to establish one at the moment. However, you do want to employ someone in Germany to either test the market or because the best candidate lives in Germany and does not want to move or because your current employee is moving to Germany but you do not want to lose them. In this case, the EOR solution can take care of all your worries.

  • You want to employ someone in Germany but as a company you want to stay out of sight and not make an appearance in Germany? Problem solved. By using the EOR solution, your company name will never appear but you can still have your chosen employee work for you.

  • You have found a candidate you want to employ but due to them requesting a higher salary than your company would usually pay for such a position, it looks like you will not be able to hire him as it would cause unrest with the other employees? Employing the candidate via an EOR would solve your problem as he would not be employed by you and thus would not fall into the predetermined salary structure.

  • Due to the current situation, your company has issued a hiring freeze. However, you still need skilled people to work for your department and so need a work-around? Using EOR, you can employ your candidate as he will not be on the company payroll.


Due to German labour laws, the maximum duration for such a contract is 18 months. Should you wish to continue to employ your employee, we will work out a solution with you before this period comes to an end.

Give us a call or send us an email to get in touch with us. We can provide you with the solution to your problem.

PEO Services

A Professional Employer Organization (PEO) is a company that legally employs the workers of other companies and oversees all the HR-related activities like wages and employment taxes, payroll, benefits etc. The client company continues to direct the employee’s day-to-day activities while the PEO is used as the employer of record for tax purposes.


This is a solution that is most often used by companies who want to expand their business into new markets but do not want to have to immediately deal with the headache of setting up a new entity and dealing with all the legal requirements of a new employee in a foreign country.


HRsolution is a licensed Professional Employer Organization in our HQ country of Germany and offers these services. We not only cover Germany as a PEO. We have branch offices in Spain, America, Mexico and England to be able to offer you the same services here. The countries in which HRsolution does not have an entity in, we work together with a local partner who has the required know-how in their respective countries. This way we are able to offer these services in many countries around the globe.


This solution is ideal if your company is considering entering new markets and expanding. It makes hiring new members of your team easy. No legal entity is necessary to explore the new market and see if it works for your company and product. Using the PEO solution allows for a fast market entry and also an easy retreat, should the market not be as promising as expected. This means a hassle-free, fast entry and exit for employees. The PEO solution is much more cost-saving than immediately creating a legal entity in your chosen country. Or it can be used as a bridging solution – your legal entity is not yet fully set-up, but you already want to employ a new candidate to start working for you. Using a PEO reduces your risk of entering and exiting a new country – we handle all the bureaucracy and HR related difficulties and transform your foreign payroll into a monthly invoice.


Through our extensive partner network, we also offer this solution in many other countries. Our partners are local experts in their respective countries and have all the local knowledge, connections and language skills necessary to ensure a smooth and compliant on-boarding.


Give us a call or send us an email to get in touch with us. We can provide you with the solution to your problem.


Entity Set-up and Support in Germany

If you have tested the German market and now want to go full-steam ahead and set-up a legal entity with everything that it entails, HRsolution is here to support you.


The most common legal entity in Germany is the GmbH. Germany being Germany will require quite a bit of paperwork and time to be able to register a GmbH. It can easily take 2-3 months before your GmbH is registered and ready to start trading.


Here are the services HRsolution offers to streamline this for you:

  • Set up a company

  • Get the company registered in the commercial register

  • Register the company with local authorities

  • Apply for a tax identification number

  • Apply for appropriate VAT numbers (local and international)

Please note a bank account has to be secured separately.


Time required:

We can get the company set up quite quickly (a matter of a few days) and can get it registered for you. Getting the tax numbers can take some weeks depending on the location.


Please note that Germany requires a minimum capital of € 25,000 for a GmbH. This money is not, however “lost”. This money is the paid-up capital of the company which should also be on a company bank account (make sure you save the deposit slip and the account balance so that you can prove that you paid in the capital). Once this capital is paid in the money can be used for salary, buying machines, cars or whatever else.


Please note that as in other countries, a GmbH has to keep books, must fill out tax returns, put together a yearly balance sheet and profit and loss statement etc. There are therefore running costs involved with the GmbH.


We can help you set up a GmbH quickly and without much hassle. We can further provide bookkeeping services, take care of your tax returns etc. (all of this through partners who have the appropriate licenses).


A fact that is worthy of consideration is that as the owner of the GmbH, you can apply for a residents visa in Germany.

Give us a call or send us an email to get in touch with us. We can provide you with the solution to your problem.

Umbrella Company

An umbrella company is a company that employs a freelancer and then leases him out to the company he wants to work for or has secured a contract with.


In Germany, as a freelancer, you are required to have more than one client. If you do not have more than one client and the government decided to do an investigation of your freelance status, it may find that you are the employee of the company you worked for as you had no other clients. The company may then have to pay fines and “back-logged” social security for the entire time that you worked for them. To avoid such a situation which can become very costly very fast, we offer the umbrella company solution. The freelancer is employed by the umbrella company and loaned out to the client company for however long the project goes on (per German labour laws no longer than 18 months.) An Umbrella Company is also called a “Proxy Company” from time to time.


Many German companies prefer this solution as they do not take the chance of possible fines and they still get to work with the person they want.


If you have a company that wants to use your expertise but does not want to hire you as a freelancer, contact us and we will work out a solution that suits both of you. HRsolution GmbH is a certified staff leaser in Germany and can solve this problem for you.

Give us a call or send us an email to get in touch with us. We can provide you with the solution.


Through our extensive partner network, we also offer this solution in many other countries. Our partners are local experts in their respective countries and have all the local knowledge, connections and language skills necessary to ensure a smooth and compliant on-boarding.

Give us a call or send us an email to get in touch with us. We can provide you with the solution to your problem.

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