Why owned entities are key to maintaining EOR compliance

As the global workforce continues to expand in response to the demands of today’s labor market, the need for effective global workforce management has grown in parallel. 

An Employer of Record (EOR) solution has become an increasingly attractive option for companies. It offers a faster and more efficient way for companies to hire internationally compared to the process of establishing their own entities and managing compliance across different countries. 

With the rise of companies offering EOR services, there are two main approaches to building the necessary infrastructure: aggregating third-party entities or owning and operating your own entities. Remote is proud to own and directly operate all of its international entities — and we have done so since Day One.

What is the difference between a third-party entity and an employer of record?

Opening and managing an international entity requires a significant investment of time, effort, and resources‌ — ‌an undertaking that leads many companies to turn to Employer of Record (EOR) services in the first place. 

To scale quickly, many EOR providers have adopted a model of aggregating third-party entities, relying on local staffing firms, consultancies, and subcontractors that already have established entities in various countries. This allows them to expand their service offerings with minimal upfront investment‌ — ‌essentially building a network of country-specific contacts with a nice-looking interface.

In contrast, Remote has pioneered a different approach by directly setting up, owning, and operating all international entities‌ — ‌without relying on third parties. This model provides several key advantages, with control over compliance being the most significant. 

After all, what’s the point of hiring an EOR provider if they can’t effectively navigate the complexities and constant regulatory changes across the 180+ countries they (claim to) serve? 

Employer of record services should offer more than just an attractive interface; they should have the reliability and expertise to ensure seamless international employment and make your global operations as smooth and efficient as possible.

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Work through this checklist to help you stay compliant when you're employing across borders.

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What are the risks of relying on a third-party aggregator model?

Global hiring is wrought with compliance challenges, making this a tricky landscape for customers to navigate effectively.

In 2024 alone, hundreds of laws, covering everything from payroll and tax regulations to mandated leave and other employment-related requirements, have changed across the 100 countries Remote EOR operates in. Staying compliant is not optional. If your EOR provider isn’t consistently proactive in managing these complexities, your team could be held accountable for any compliance lapses.

When you work with an EOR provider who has aggregated entities rather than owning their own entities, you take on the complexity of global hiring compliantly and ensuring the third party your employee is hired through is in compliance. It multiplies your work, increases your liability, and becomes a game of telephone and delays between you, the aggregator, and the third-party entity. There can be additional handoffs for customers, delays in communication, and many other issues. We often encounter clients who have transitioned to Remote after facing challenges with EOR providers that use an aggregator model. These challenges often include unexpected cost increases, poor customer experiences after being passed around between parties when issues arise, and difficulties with country-specific compliance. When a company doesn't own its entities, it lacks full control over pricing and how third-party entities manage compliance. Since the primary goal of an EOR is to free up your team’s time, this lack of control undermines the effectiveness of the EOR solution.

Own the entities, own the compliance, own the experience

At Remote, we have shown that owning international entities is key to providing an exceptional customer experience and maintaining the highest standards of compliance. Whether you're a partner or a customer, we take both the experience and the compliance of our clients very seriously.

From the beginning, we made the decision to own and operate all our international entities, rather than relying on third-party aggregators. With this distinct difference, Remote can fully commit to delivering compliant solutions from Day One with full control of our product offering. Owning the entities ourselves allows us to:

• Reduce our customers’ exposure to compliance risks: by managing all entities directly, we maintain full control over the legal and regulatory requirements in each country. This minimizes the risk of compliance issues and ensures a higher degree of reliability. Additionally, our Watchtower team goes a step further by continuously monitoring regulatory changes and providing timely pro-active alerts to our customers, ensuring they stay ahead of any potential compliance issues.

• Ensure a consistent, efficient customer experience: Because we don’t rely on third-party intermediaries, our customer success teams have full visibility and control over the entire process. This enables them to resolve issues more quickly and effectively, without delays caused by coordinating with external partners. This has allowed us to provide a smoother and more predictable experience for our clients, from onboarding to day-to-day operations.

By owning our entities, we’re able to provide the highest level of service, ensuring both seamless international hiring and compliance across the globe.

Employer of Record & PEO —

13 min

Owned-entity vs. partner-dependent global employment: What companies should know

Not all global employment solutions providers are created equal. Some own legal entities in the countries where they operate, while others rely on partner networks to do the heavy lifting. To help illustrate which model is better for your business, we have put together this helpful guide.

The Remote difference

As the person responsible for implementing global hiring at your company, you already have a lot on your plate. From understanding local labor laws and tax regulations to ensuring compliance across multiple countries, the complexities can quickly become overwhelming. 

On top of that, managing a seamless hiring process for a global workforce adds another layer of challenge. Partner with Remote, and you can be assured that our reliable team, including our Watchtower legal experts, safeguards you from a compliance perspective.

Let Remote take the weight off your shoulders by handling the most difficult aspects of international employment. Our platform streamlines the hiring, onboarding, and compliance processes across borders, ensuring that you stay on top of regulatory requirements while offering a smooth experience for both you and your new hires. 

With Remote, you can focus on growing your business while we handle the intricacies of global workforce management, giving you the peace of mind you need to move forward with confidence.

CTA: Learn more about embedding Remote into your platform

Global HR —

2 min

End-of-year planning in Q4 2024 to create a better 2025

Get ready for a successful 2025! Discover key strategies for Q4 2024, including tech stack consolidation, workforce flexibility, competitive compensation, and global talent acquisition to set your business up for long-term growth.