GemmWork Glossary

A fixed place of business in a foreign country that subjects a company to local corporate taxation.

The OECD threshold after which a worker's presence in a country triggers potential PE and tax residency obligations.

The highest-risk GEMM mode: a fully embedded independent contractor with strategic decision-making authority.

A third-party company that serves as the legal employer for workers in foreign countries, handling payroll, taxes, and compliance.

The legal risk that a contractor relationship is reclassified as employment, triggering retroactive tax and benefit obligations.

The headcount at which establishing a local entity becomes cheaper than paying ongoing EOR fees — typically 15–25 employees in the same country.

A GemmWork scoring variable measuring how difficult it is to terminate employment or exit an EOR arrangement in a given country.

The phenomenon where exiting an EOR arrangement triggers mandatory severance and statutory costs that can reach $15,000–$45,000 per employee.

Colombia's mandatory severance fund: 1 month's salary per year of service, deposited monthly into a government fund.

Brazil's mandatory severance fund: 8% of monthly salary deposited by employers, with a 40% penalty on the balance upon without-cause termination.