Help! I Need to Hire Employees in Canada But Don’t Want to Set Up a Local Entity

From Startup to Success: Breaking Into the Canadian Market Without Breaking a Sweat  

Sarah Chen stared at her laptop screen, a mix of excitement and anxiety washing over her. As CTO of a growing Silicon Valley AI startup, she'd just discovered that 40% of their inbound interest was coming from Canadian enterprises. The market was calling—but how to answer?  

"We need to move fast," she told her CEO.   

"There's a $49 billion tech market in Canada we're not tapping into, and our competitors are already making moves."  

But the path forward seemed daunting. Canadian corporate setup costs averaged $15,000-20,000, and the legal process could take 4-6 months—precious time in the fast-moving AI space. Sarah had heard horror stories of companies getting tangled in Canada's complex provincial labor laws. A single compliance misstep could cost up to $10,000 in penalties.  

Then she discovered a solution that would transform their expansion strategy.  

How an EOR Became Sarah's Secret Weapon  

Instead of spending months setting up a Canadian entity, Sarah's company partnered with TCWGlobal as their EOR. Within weeks, they had:  

• Hired their first three Canadian AI engineers in Vancouver  

• Established complete payroll and benefits program compliance across provinces  

• Saved approximately $35,000 in setup costs  

• Reduced their time-to-market by 5 months  

"It was like having a Canadian HR department instantly materialize," Sarah recalls. "While our competitors were still filing incorporation paperwork, we were already scaling our Canadian team."  

Why Hire in Canada Without a Local Entity?  

Setting up a local entity in Canada is a complex and costly process. For many companies, this may not be feasible or necessary, especially for short-term projects, small teams, or market testing. By partnering with an EOR, you can:  

• Hire Talent Quickly and Compliantly: An EOR helps you onboard Canadian employees swiftly, without needing to create a legal presence in the country.  

• Receive Assistance in Compliance with Federal Regulations: An EOR manages Canadian employment regulations, including tax withholding, payroll services, and benefits plans.  

• Focus on Core Business Operations: Without the administrative burden of entity setup, your team can focus on growth and expansion.  

What is an Employer of Record (EOR)?  

An Employer of Record (EOR) is a third-party organization that serves as the legal employer for your workforce in a specific country. When you work with an EOR, they take on the legal and administrative responsibilities of employment, while you maintain control over the day-to-day tasks and projects. This allows you to hire in Canada without establishing a formal business entity there.  

Benefits of Hiring in Canada with an EOR  

Here are some key advantages of using an EOR for hiring employees in Canada:  

Full Compliance with Canadian Labor Laws 

Canada has its own set of employment regulations, including specific requirements for payroll, tax withholding, benefits, and worker protections. An EOR like TCWGlobal has the expertise to assist you in compliance with Canadian laws, reducing the risk of fines, legal issues, or reputational damage.  

• Example: A U.S.-based software company wants to hire a developer in Canada but is unfamiliar with Canadian employment laws. TCWGlobal partners with them in compliance matters, including tax deductions and contributions to the Canada Pension Plan (CPP) and Employment Insurance (EI), to help the company meet all legal requirements.  

Streamlined Payroll and Multi-Currency Payments 

Payroll management in Canada requires adherence to specific tax and withholding obligations. An EOR processes payroll for you to ensure that employees receive accurate and timely payments in Canadian dollars. EOR also handles required contributions and withholdings.  

• Example: A European design firm hires a Canadian project manager and works with TCWGlobal to manage payroll. TCWGlobal partners with them for their payroll to comply with Canadian tax requirements, assisting with deductions and remitting contributions to the Canadian Revenue Agency (CRA) as required.  

Region-Specific Benefits and Employee Support 

To remain competitive in Canada’s job market, offering competitive benefits is essential. An EOR can provide region-specific benefits packages, including health insurance, retirement plans, and wellness programs tailored to Canadian standards.  

• Example: A U.K.-based marketing agency works with TCWGlobal. They provide Canadian employees with benefits that meet local needs. These benefits include supplemental health insurance, paid leave, and wellness resources. This partnership helps improve employee satisfaction and retention.  

Faster Time to Hire 

Setting up a local entity can take months, delaying your entry into the Canadian market. An EOR enables you to hire immediately, allowing you to onboard talent and start projects faster.  

• Example: A SaaS company in the U.S. wants to hire a sales team in British Columbia within a month. By partnering with TCWGlobal, they can quickly onboard Canadian employees and begin operations without waiting for a local entity setup.  

No Need for Entity Setup and Reduced Overhead 

Setting up a legal entity in Canada involves various administrative and legal expenses, from registration fees to office space costs. Using an EOR lets you avoid these expenses, reducing overhead and allowing you to focus on revenue-generating activities.  

• Example: An international consulting firm needs a temporary team in Canada for a one-year project. Rather than setting up an entity, they hire through TCWGlobal, saving time and costs while maintaining compliance.  

How TCWGlobal Simplifies Hiring in Canada  

TCWGlobal offers a complete EOR solution, managing all aspects of employment, payroll, and compliance for your Canadian workforce. Here’s how TCWGlobal supports your business in hiring employees in Canada without a local entity:  

Expertise in Canadian Compliance and Employment Law 

TCWGlobal’s team has extensive knowledge of Canadian labor laws, including tax obligations, benefits requirements, and worker protections. Our compliance expertise assist with your employment practices in aligning with Canadian regulations, minimizing legal risks and protecting your brand.  

Comprehensive Payroll and Benefits Administration 

From tax withholdings to employee benefits, TCWGlobal manages all payroll-related tasks, ensuring accuracy and compliance. We handle all necessary deductions and contributions to the CRA, CPP, and EI, as well as local benefits packages to keep your employees satisfied and motivated.  

Seamless Onboarding and HR Support 

TCWGlobal provides a smooth onboarding process for Canadian employees, managing all employment contracts, HR documentation, and benefits enrollment. Our dedicated HR support ensures that employees have easy access to resources and assistance.  

Scalable Solutions for Growing Teams 

Whether you’re hiring a single developer or building a team of Canadian sales representatives, TCWGlobal offers scalable EOR services to meet your needs. Our solutions adapt to the size of your workforce, ensuring you have the flexibility to expand without administrative burden.  

Technology-Driven Platform for HR Management 

TCWGlobal provides a tech-driven HR platform that integrates with your systems, allowing you to track payroll, benefits, and compliance in real-time. This centralized platform simplifies global workforce management, providing you with the data and insights needed to make informed decisions.  

FAQs  

Why should I use an EOR to hire in Canada instead of setting up a local entity?  

Using an EOR allows you to hire employees in Canada quickly and compliantly without the time and cost involved in setting up a local entity. An EOR handles all employment-related tasks, including payroll, taxes, and compliance, reducing administrative overhead.  

How does TCWGlobal handle payroll for Canadian employees?  

TCWGlobal manages Canadian payroll by handling tax withholdings, CPP and EI contributions, and remittances to the CRA. We partner with you to support your employees being paid accurately in Canadian dollars and in compliance with local tax laws.  

What benefits can TCWGlobal provide to Canadian employees?  

TCWGlobal offers competitive benefits packages tailored to Canadian expectations, including health insurance, retirement contributions, and wellness programs. We customize these packages to meet local standards and employee needs.  

Can I hire multiple employees in Canada through TCWGlobal?  

Yes, TCWGlobal provides scalable EOR services, allowing you to hire as many employees as needed in Canada. Whether you’re hiring one person or building a team, our solutions adapt to your business needs.  

How quickly can TCWGlobal help me onboard employees in Canada?  

With TCWGlobal, you can start hiring in Canada immediately, without waiting for entity setup. We handle all onboarding processes, ensuring that your team is ready to work as soon as possible.  

How does TCWGlobal assist in compliance with Canadian labor laws?  

TCWGlobal’s compliance experts stay up-to-date on Canadian labor laws, including tax, benefits, and employee rights. We partner with you in all aspects of employment according to local regulations, minimizing compliance risks.  

Final Thought  

Hiring in Canada offers exciting opportunities, but setting up a local entity can be complex and costly. Partnering with an Employer of Record (EOR) like TCWGlobal allows you to hire Canadian talent quickly and compliantly without the need for a legal entity. TCWGlobal handles payroll, compliance, benefits, and HR support. This is to ensure a smooth experience for your Canadian employees while your company focuses on growth and expansion.  

Need Help?  

Need help managing your contingent workforce? Contact TCWGlobal today to learn more.  

Whether you need expertise in Employer of Record (EOR) services, Managed Service Provider (MSP) solutions, or Vendor Management Systems (VMS), our team is equipped to support your business needs. We specialize in addressing worker misclassification, offering comprehensive payroll solutions, and managing global payroll intricacies.  

From remote workforce management to workforce compliance, and from international hiring to employee benefits administration, TCWGlobal has the experience and resources to streamline your HR functions. Our services also include HR outsourcing, talent acquisition, freelancer management, and contractor compliance, ensuring seamless cross-border employment and adherence to labor laws.  

We help you navigate employment contracts, tax compliance, workforce flexibility, and risk mitigation, all tailored to your unique business requirements. Contact us today at tcwglobal.com or email us at hello@tcwglobal.com to discover how we can help your organization thrive in today's dynamic work environment. Let TCWGlobal assist with all your payrolling needs!