What is PE Risk ?
Some companies choose to avoid establishing a foreign subsidiary by deploying staff abroad under the employment of their HQ company. Others hire staff locally as “independent consultants” on full-time or exclusive basis. In such cases, the authorities where your staff are operating may decide that by retaining full-time staff there, even as consultants, your company has effectively created a branch, or Permanent Establishment ( PE ), and they may seek to audit and levy taxes and penalties on your HQ as a result. At best, this can drain huge amounts of time and mind-space for your management staff. At worst, significant penalties can result.
