What is the « portage commercial » mechanism ?
“Portage commercial” in French refers to the contractual relationship between a contractor (via an EOR – Employer of record), the contractor’s client and a third party which provides services to both the contractor and their client. The purpose of this mechanism is to facilitate the relationship between the contractor and the client by using a specialised third party which will be responsible for managing the contract, employment and tax matters related to the relationship between the contractor and the client.
How does it work?
The third party acting as an intermediate between the contractor and their client is a specialised services company, such as Prium Portage (also known as EOR – Emloyer of record). The services company signs a contract with the contractor’s company and another contract with the consultant’s client. Pursuant to these contracts, it will be in charge of sending invoices to the contractor’s client and of dealing with other administrative tasks directly with the contractor’s client. In turn, the contractor invoices Prium Portage and Prium Portage pays the amount to the contractor minus a fee.
As opposed to an umbrella company (“portage salarial” in French – and most known as « EOR : Employer Of Record »), the service provider does not employ contractor. The contractor must have their own company.
Why use it?
Companies can sometimes be reluctant to engage directly with an independent contractor’s limited company for many reasons. They may wish to avoid any liability or risk in relation to tax and employment law, they may want to limit the number of contact persons they need to deal with when outsourcing tasks or they may desire to work only with contractors already referenced in their system.
In this context, for both the client company and the contractor, there are numerous advantages to using a company such as Prium Portage as an intermediate.
For clients
It allows the client to limit the number of contact persons involved each time they need a contractor: the client only needs to sign one contract with the services provider which can then be its sole contact each time the organization needs a contractor. This way, the client company has the possibility to manage all contractors through a single services company. It reduces the costs of external resources, and the company becomes more flexible in its operation.
For contractors
Prium Portage’s services make it a lot easier to carry out their business. First of all, contractors avoid having to fulfill any referencing requirements which may be imposed by certain clients. Secondly, each contractor signs a single framework contract with Prium Portage, as opposed to having to negotiate and sign contracts with multiple clients.
Finally, for international contractors operating in France, using such assistance can be the best option when a client does not wish to enter into an agreement with a non-French company.
Conclusion
All in all, it is a secure and cost-effective solution for contractors and their clients. The services company only charges the contractor a one-off fee; there are no additional management fees throughout the term of the contract.
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