The short answer is yes, but doing so either requires you to open your own legal entity in the country or hire the workers as contractors. Both strategies have their pros and cons.

If you open your own legal entity, you will be responsible for managing your entire operation in the new country. That means hiring attorneys, payroll specialists, benefits administrators, and other professionals. This might make sense if you plan to hire hundreds of people in a new country, but if you only plan to employ a handful (or even a few dozen), an EOR is more cost effective.

Hiring workers as contractors demands vigilance. International contractor misclassification is a serious issue and can result in significant fines and penalties. Using an EOR shields your business from potential compliance risks by making sure workers fully established employees.

An Employer of Record, or EOR, is a company that legally employs workers on behalf of another business.

It's important to understand that not all Employers of Record operate in the same way, and there are significant differences in how EOR services are provided. Some EORs, like Remote, own their own legal entities in each country they operate in, while others serve as intermediaries without owning any entities. Some EORs might even use a combination of their own and partner entities. It’s crucial to choose an EOR that fits your specific needs for employment compliance in the countries where you plan to hire."

An Employer of Record (EOR) can hire employees on your behalf in other countries, while a Professional Employer Organization (PEO) may not. Some companies call themselves 'international PEOs' and offer EOR services. Others using the term 'international PEO' only provide services for companies that already have legal entities in other countries.

Think of it like this: if you need to hire someone in a country where you don't have a legal entity, you need an EOR. If you're looking for help managing HR functions, such as payroll and benefits administration, in a country where you already have your own entity, you need a PEO. Basically, a PEO provides many of the same services as an EOR but doesn't handle the legal employment of your employees in other countries.

Learn more about the differences between an EOR and a PEO in our helpful guide.

Employer of Record (EOR) costs usually come in two forms: a flat fee or a percentage-based pricing model. Flat fees are charged per employee, regardless of their position or salary. Percentage models charge a fee based on a percentage of the employee's salary; these fees can vary depending on the employee's level and pay.

Be wary of EOR pricing models that use a percentage. Global employment costs can fluctuate widely, but a reliable EOR will account for these costs and give you a clear idea of your bill upfront. Percentage-based fee structures might encourage companies to keep worker salaries low while increasing payments to third-party providers.

Remote’s EOR pricing is $599 per month when paid annually, or $699 when paid monthly. There are no hidden fees, minimums, contract lengths, or exclusivity agreements. Choose the plan that best fits your team’s needs. View our pricing page to see how easy, quick, and affordable growing your global team can be.

The main role of an Employer of Record (EOR) is to act as the legal employer for your employees in other countries. Your EOR protects your company from liability and compliance risks by legally employing workers on your behalf.

An EOR also takes care of the complex HR tasks associated with hiring workers in different countries. Regulations vary widely, including how often employees should be paid, which currencies are acceptable, how much paid time off is required, and much more. EORs handle all these complexities for you, allowing you to spend less time on administrative tasks and more on recruiting staff to expand your business.

It’s important to note that an EOR does not manage the employee’s daily tasks or performance. You interact with employees hired through an EOR just as you would with any other employee. The only difference between an employee in your office and one under an EOR in another country is who manages the paperwork.

An Employer of Record (EOR) is a third-party provider legally responsible for another organization's employees. Among other responsibilities, an EOR manages the payroll administration for employees in other countries. When you hire someone in another country through an EOR, you provide the funds to the EOR, and they handle the distribution of salaries, including any necessary tax deductions, social security contributions, and retirement account funding.

Working with an EOR enables you to confidently manage international payroll complexities in compliance with foreign laws. An EOR allows you to employ workers in other countries without needing to become an expert in the payroll laws and customs of those countries. You simply find the right candidate for the job, and then let your EOR handle the details.

When comparing employer of record services, consider the number of countries where they provide direct services, the range of global HR solutions they offer such as payroll, benefits administration, onboarding, and local taxes, as well as how thoroughly they ensure compliance with local laws in each country they serve. Additionally, the quality of the user interface should be taken into account.

Only partner with an EOR that owns its own local entities in the countries where you want to hire. Otherwise, you might find your employees are hired through an unknown third party, leaving you with little oversight or control over the quality of their experience.

Furthermore, your EOR should offer strong protections for your intellectual property.

Without strong protections, you might find yourself embroiled in uncomfortable situations and lengthy legal battles over intellectual property ownership in different countries—a nightmare for any business. Here are a few questions you might consider asking:

• Do you own an entity in this country, or do you outsource employment and compliance to a third party?

• How do you safeguard intellectual property and invention rights in this country?

• Do you share employee data with any third parties?

• Do you store all employee documents for employees in all countries in one easy-to-access location?

Remote owns all our own entities, provides the strongest IP protection and data security in the industry, and offers best-in-class global employment software to meet your needs.

Yes, using an Employer of Record is completely legal in most countries. However, the highest level of legal compliance is typically offered by EORs that own their own business entities in the countries where you want to hire.

Before you start working with an EOR, make sure they own a local entity and have the necessary expertise to properly manage localized payroll, health benefits, taxes, and any other benefits or compensation you might offer, such as stock options.

If you are unsure when to use an employer of record, learn more about why an EOR is often the most straightforward approach to international employment.