7 common myths about EORs — and why they’re wrong

Using an employer of record (EOR) to hire beyond borders is a smart move, creating a wealth of opportunity for your business.

But with all the complexity that comes with global employment, it’s no surprise that there are numerous misconceptions around EORs. Maybe you’ve heard that these services are too expensive. Or that they’re not really compliant. Or that they’re only useful for short-term hires.

Because EORs are still relatively new to many businesses, these misconceptions are common. That’s why, in this article, we’re taking a look at some of the biggest myths surrounding EORs — and setting the record straight.

Myth 1: "EORs are expensive"

At first glance, an EOR provider’s fees may seem higher than running payroll and HR in-house. But that comparison is misleading. The real cost of global hiring isn’t just payroll; it’s the expense of setting up and maintaining a local entity, navigating complex compliance requirements, and hiring legal or HR experts in every new country.

When you factor in these costs, an EOR is actually often far more cost-effective, as shown below:

Source: What is the real cost of opening a business entity? 

This is without mentioning indirect costs and the drain on your resources, too. For instance, when you set up your own entity, you’ll need to:

• Set up a local bank account, which usually requires in-depth documentation, validation, and in-person visits.
• Hire or appoint an in-house project manager to create and manage the entity.
• Appoint local directors with applicable fees and compensation (in some countries).

With an EOR, you don’t need to do any of those things.

$74,159

The average estimated amount saved by Remote customers when using our EOR platform, rather than setting up an entity (Remote 2024 survey of 374 customers).

And don’t forget the time constraints, either. It often takes between five and 12 months to incorporate your entity, which means a long time to wait before you can hire anyone. With an EOR, you can avoid this and hire the best talent in your target countries immediately.

"If we had to co-ordinate everything in-house, I’d have to hire an extra four people to manage entities, local solicitors, tax firms, accountants, payroll. and translation services. It would cost upwards of $500,000 extra per year. Remote takes that burden off of our plate."

Luke McKinlay, VP of Finance, Fountain

To learn more about Remote’s EOR pricing, check out our in-depth breakdown.

Myth 2: "EORs are non-compliant and cut corners"

Some assume that EORs take shortcuts to speed up hiring. But in reality, compliance is the absolute foundation of a reliable EOR.

This is especially true for Remote, where compliance is built into every single contract, process, and workflow on our platform. For example, our Compliance Watchtower feature keeps you ahead of regulatory change with proactive alerts and clear, actionable guidance. It also centralizes compliance updates across countries, so your team doesn’t need to track shifting laws manually.

That means fewer surprises, fewer errors, and full peace of mind that we’re doing everything by the book — even if it makes us “boring”.

See how Remote builds compliance into everything we do

Myth 3: "You don’t own your IP"

This is a common fear, but it’s unfounded. When you hire through an EOR, your intellectual property (IP) remains yours.

For instance, with Remote’s IP Guard feature, we guarantee IP ownership with a two-step, independently-audited, contract-backed assignment in every country you hire in.

That means reduced dispute risk, stronger board-level confidence, and a consistent global approach that eliminates any ambiguity.

Myth 4: "There’s no real employer, just a shell"

It’s easy to imagine an EOR as a virtual front, but that’s not the case. EORs like Remote’s are fully licensed, regulated entities with real operations and real people on the ground: people who are responsible for handling local compliance, payroll, benefits, and employment contracts.

Far from being a “shell,” Remote protects both you and your employees.

Learn more: What is it like for your team members to work through an EOR? 

Myth 5: "EORs are just for short-term or temporary hires"

While EORs can certainly be used for stop-gap solutions or trial runs in a new market, they are not just restricted to solving short-term hiring issues. For instance, many employees remain with their companies for years under an EOR arrangement.

Whether you’re hiring someone for a short project or building out a permanent team in a new country, an EOR can support your long-term employment relationships just as effectively as your own entity would. And if the time comes when you do want to move your people to your own local entity, we can help with that too!

Myth 6: "EOR employees don’t get the same protections or benefits"

Team members that are hired through an EOR receive exactly the same statutory rights and benefits as any other employee in that country. Period. From healthcare and paid leave to local labor protections, your people will always be covered by exactly the same laws as their non-EOR peers.

In fact, in many cases, hiring through an EOR can help you offer additional perks and support that help you to secure the best talent, giving you a competitive advantage. Learn more about Remote EOR’s benefits packages.

Myth 7: "An EOR is riskier than setting up an entity"

It may feel safer to establish your own entity, but in reality, this approach can expose your business to significant risk — especially in the beginning. If you’re not fully versed in local employment law, even small mistakes or misunderstandings can lead to serious penalties or reputational damage.

An EOR provider like Remote minimizes these risks by ensuring that you’re compliant with local regulations from day one. Instead of taking on that burden yourself, you can rely on trusted, experienced experts who live and breathe compliance.

“If it's up to me to understand the local taxes or compliance or anything that's country-specific, it's possible that something will get missed and problems can happen. But Remote has it covered. They're doing the correct payroll, taxes, and everything else along the way. That peace of mind is the top thing for me."

Stefan Kende, COO, Swell

Working with an EOR

EORs aren’t a loophole or simply a temporary fix; they’re an effective, compliant, and cost-effective way to grow your team across borders, and are trusted by many of the biggest companies in the world.

However, to get the best experience out of your EOR, it’s vital to choose the right partner. After all, your provider doesn’t just handle payroll and compliance; it acts as an extension of your team.

As a result, ensure that your EOR provider:

• Owns its own entities in all the countries it operates in. Your partner should have direct control over compliance, payroll, benefits, and IP transfer, rather than outsourcing to and relying on third-party partners. This reduces multiple risks, speeds up issue resolution, and ensures a consistent experience for your team. Why is an owned-entity model so important?
• Has transparent, predictable pricing. Your EOR partner should always provide flat rates with a Fair Price Guarantee, which means no hidden fees, deposits, or long-term commitments.
• Has strong security and IP protection. As mentioned, strong data security posture and purpose-built protections (like IP Guard) are crucial for compliantly safeguarding your sensitive data and your intellectual property.

Remote guarantees all these things, and even enables your business to offer equity incentives to your team members around the globe. This means that, with a provider like Remote by your side, expanding across borders isn’t a risk — it’s an opportunity.

To learn more about how Remote EOR can transform your hiring strategy and help your business grow, speak to one of our friendly experts today.