Professional Employer Organization (PEO) in Cuba

If you want to expand your business overseas, you may consider hiring a professional employer organization (PEO) to offset some of the responsibilities you’d otherwise be left with. Expanding overseas to places like Cuba means you would need to learn the laws of the land, such as employment and tax laws to remain legally compliant.

However, keeping up-to-date with Cuba’s laws and dealing with human resources (HR) responsibilities can be overwhelming. Tasks like hiring employees, dealing with payroll and employee benefits, and meeting compliance requirements can leave you with a headache.

But hiring a PEO can help.

What Is an International Professional Employer Organization (PEO)

A PEO is a company whose staff has vast HR knowledge and experience to help businesses with specific, everyday tasks.

When you sign a contract with a PEO, you enter into an agreement and a relationship known as co-employment. A co-employment relationship means that both parties have specific responsibilities in the employment process. While the name can be misleading, the PEO service provider has no stake in ownership, and the parent organization maintains full ownership of the business.  

Although PEOs can also help businesses in the US market, an international PEO, or global PEO, exists to help companies to expand overseas and navigate global employment and tax laws. The PEO takes on responsibilities such as payroll processing, withholding and paying payroll taxes, upholding coverage for workers’ compensation, handling HR tasks, and more.

An international PEO not only helps businesses with compliance but also assists in streamlining business operations.


Many people confuse the term professional employer organization with an employer of record (EOR), but these two employment partners have many differences. They work with the same goal in mind — to help businesses expand internationally.

The most significant difference between these two organizations is that, with a PEO, you must establish a local entity in a foreign country and sign a co-employment contract. In contrast, EORs allow you to avoid having an entity and co-employment contract.

However, both PEOs and EORs help with HR tasks, including payroll processing, managing benefits, and tax deductions and reporting. These similarities result in some people using the terms PEOs and EORs interchangeably, despite them being very different.

What Are the Benefits of Using a PEO Provider

Using a PEO, you’ll benefit from professional and strategic guidance, helping you expand your business while ensuring that you remain compliant and free from legal troubles including penalties and fines.

Other benefits of using a PEO include:

Payroll Processing

PEOs handle everything to do with payroll processing, including calculating wage earnings by reviewing employees’ hourly schedules and overtime pay, determining and withholding deductions, and delivering payments to compensate your workers.

Additionally, PEOs are also responsible for filing and reporting payroll taxes and paying them on behalf of your company to the employees. Since tax laws vary across countries, having someone to handle taxes in a different country can save you time.

Benefit Packages

Benefits can also vary depending on the country’s laws. Since PEOs operate in several different countries, they can provide employees with attractive benefits packages which parent companies may not be able to provide otherwise. PEO benefits are typically inexpensive but include access to many different coverage areas, including:

  • Medical insurance
  • Dental insurance
  • Vision insurance
  • Life insurance
  • Disability benefits
  • Retirement plans
  • Healthcare flexible spending accounts

PEOs will handle employee enrollment in these benefits and will process claims if any.


Another benefit of hiring a PEO is that they will ensure that your company remains compliant with all employee and tax laws. PEO providers often have specialists with extensive knowledge of compliance laws in various countries. Since employment laws are continuously changing, having an expert who specializes and keeps up-to-date with these changing laws is vital. They will notify you when regulations update and help your company make the necessary changes.

PEO compliance experts come equipped with knowledge regarding local rules and regulations and can ensure that your company follows proper protocols to keep you out of legal trouble such as infractions and fines. Plus, following compliance will help you build a reputable reputation and ensure you remain favorable among local bureaucracies.

PEOs also handle written employment agreements and their requirements, including:

  • Minimum wage
  • Overtime hours and pay
  • Sick leave
  • Personal time off
  • Parental leave
  • Other administrative leave
  • Benefit administration
  • Social security benefits
  • Workers’ compensation
  • Unemployment insurances

Time & Cost

You’ll save both time and cost with PEOs. Since PEOs take on many responsibilities that your company would otherwise need to handle. PEOs will be in charge of time-consuming tasks such as handling payroll processing, benefits packages, and keeping up-to-date on rules and regulations.

Saving time in these areas will help your company focus on more important tasks, such as revenue, growth, and productivity.

PEOs can also help you save money. Without a PEO, you would need to rely on in-house staff to take care of responsibilities such as payroll processing and human resources functions. However, with a PEO, you can save money on the cost of processing payroll and accounting tasks. Most PEOs offer automated services that handle these tasks, cutting out the middleman.

Financial Forecasting

Financial forecasting is a complicated process, especially when it involves international sectors. Businesses that are new to overseas expansion may struggle to project their monthly finances, especially due to factors out of their control, such as currency exchange rates and international banking protocols.

PEOs understand these factors and can help companies with formulating accurate projected budgets.


PEO providers offer flexibility in employment, meaning that PEOs can hire, reassign, and even terminate employees as needed. If your business needs change due to a pandemic, a weak economy, or political instability, the PEO can help you manage the fallout from these emergencies.

PEOs can temporarily adjust contracts and make quick but temporary adjustments to salaries if production is at a standstill. They can also reassign workers from one role to another, if necessary.

Using an international PEO will also help you test the waters in a new, unfamiliar market. Testing markets can help you evaluate whether or not it is worth it to commit to expanding your business in said market, it can help you understand local competition, and assist you in determining how your products and services fit into local culture.


Since you’ll work alongside a PEO with specialists who understand local labor laws, you can avoid unnecessary risks and keep your business safe. You can avoid things like expensive payroll mistakes and tax deductions.

PEOs are also responsible for all employer-related legal liabilities. It is their job to help you decrease risks so that you can have peace of mind when expanding your business.  

Additionally, some PEO providers offer safety audits and training programs. They also help with Occupational Safety and Health Administration (OSHA) reviews.

Data Security

In addition to providing compliance safety, PEOs can also help with data security. For businesses with operations in the EU, this is especially important. This is due to 2016's General Data Protection Regulation (GDPR) law. This law mandates that data kept on clients and employees be secure, accessible to the individual, and securely transferable.

Employment Management

PEOs take on several HR responsibilities, including employment management. If you already have in-house HR staff, PEOs will work alongside them to provide strategic and administrative assistance.

If you don’t already have your own HR team, then PEOs can handle tasks such as employee management services, including recruiting and hiring new employees, employee training, and performance management.

Finally, PEOs will ensure that your employees receive the correct classification. For example, if you hire an independent contractor or freelancer, you must classify them as such on the written contract. Failure to properly classify these roles opens the door to your business for significant fines and penalties.

Using a PEO In Cuba

If you’re planning to expand your business to Cuba, then you’ll need to understand Cuba’s employment and tax laws to ensure that compliance is met. PEOs can help with this, helping to hire Cuban workers and ensuring that your company remains compliant with Cuba’s legal and tax rules set forth by Cuba’s Labor Code.

How Does a Professional Employer Organization in Cuba Work?

Cuba, also known as the Republic of Cuba, is a country located in the Caribbean, and is home to sugar-milling, agriculture, construction, oil refining, and tourism sectors. They have many employment and tax requirements that you should be aware of. If your company does not meet compliance, you risk facing fines and penalties, which can be costly and hurt your company’s reputation.

Hiring a PEO in Cuba works similarly to other countries. Depending on the PEO provider you hire, they’ll be responsible for tasks such as payroll processing, tax withholding, and HR. Without a PEO, you’ll be responsible for meeting compliance and keeping up-to-date with changing laws.

Once you have signed into a co-employer agreement with a PEO service, you can assign the duties you want the PEO to handle and the ones you’d like to take responsibility for.

Who Should Use a PEO Service?

PEO services can benefit any business, big or small. Still, small and medium-sized businesses may benefit the most from partnering with a PEO provider. Since small and medium-sized businesses have fewer in-house staff, partnering with a PEO who will assume responsibility for time-consuming tasks can allow them to spend their time managing more significant business-related tasks.

While US businesses can use PEOs and the services they provide, they’re more valuable for industries looking to expand internationally, since they have specialists who are knowledgeable about certain international laws and regulations. It can also benefit companies that are looking to hire their first overseas employees as they can handle recruiting, hiring, and training.

Large companies can also take advantage of PEO services, especially if they're looking to expand their operations to more than one overseas country. Keeping up-to-date with one country’s compliance regulations can be a hassle, but keeping up with several can be overwhelming. So, handing these responsibilities off to a PEO can save large companies the headache of remembering ever-changing rules.

How To Choose the Best PEO Service Company

If you want to find a PEO service to handle your payroll processing and HR responsibilities, then you might be wondering how to choose the best one. If you’ve done your research, then you know that there are plenty of services to choose from. Choosing the right one is essential for your business.

Before deciding on a PEO company, consider the following steps:

  • Look at your company and decide its needs and end goal.
  • Determine what tasks and responsibilities you want the PEO to handle.
  • Look at reviews and ask for recommendations from other businesses.
  • Interview potential PEOs and learn about their organization and the services provided.
  • Ask questions: Is the PEO fully insured? What does their insurance cover? What employee benefits do they offer? Do they assist in employment management?
  • Ask for referrals and follow up with them.
  • Review any PEO service agreements and ensure the agreement has enough flexibility to meet your needs.

The most important part of selecting a PEO is figuring out whether or not they will be able to provide the most important services to you. For example, if you’re looking for a PEO to handle recruiting and hiring, you’ll want to ensure that the PEO organization provides this service and it's put into your contract.

Since PEOs are mainly responsible for ensuring compliance is met, you’ll also want to confirm that the PEO you choose to work with is current with country-specific compliance. Ask them to confirm their knowledge of laws and regulations and clarify that you want your company to remain compliant with local, state, and federal laws.  

Hiring a PEO Service Provider

If you’re still unsure about how to hire the best PEO service provider, then you should reach out to Revelo. We help businesses find top-quality remote talent in Latin America. We can help your business, too, by providing you with pre-vetted talent to streamline your business. Contact us for more information.

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