The short answer is yes, but you either need to set up your own legal entity or hire workers as contractors. Each option has its pros and cons.

Setting up your own legal entity means managing your entire presence in the country. This includes hiring lawyers, payroll specialists, benefits administrators, and other professionals. It’s a good choice if you plan to hire hundreds of people, but for smaller numbers (a few or even a few dozen), an EOR is more cost-effective.

Hiring contractors requires caution. International contractor misclassification is a serious issue that can result in hefty fines and penalties. An EOR mitigates these risks by making workers full employees.

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

It's essential to understand that EORs can operate very differently. Some EORs, like Remote, have their own legal entities in the countries they serve, while others work as intermediaries without owning any entities. Some EORs may use a combination of their own entities and partner entities. Choosing an EOR that fits your employment compliance needs in the countries where you plan to hire is vital.

A Professional Employer Organization (PEO) usually doesn’t directly hire or employ workers. Instead, an Employer of Record (EOR) takes on that role, hiring employees on behalf of your business in various countries. PEOs are sometimes referred to as “co-employment,” where they handle payroll, benefits, and other HR responsibilities, while your company oversees other duties. If you want to hire in a country where you don’t have a legal entity, you will need an EOR. Using a PEO generally means your company must have a legal entity in the countries where you employ workers.

Simply put: if you need to hire someone in a country where you don’t have a legal entity, you need an EOR. If you need assistance with HR functions like payroll and benefits in a country where you already have a legal entity, a PEO might be a good option. Essentially, a PEO provides HR support but doesn’t handle the legal employment of your employees in other countries.

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

Employer of Record (EOR) costs typically break down into either a flat fee or a percentage pricing model. Flat fees are charged per employee, regardless of their level or salary. Percentage-based models charge a fee that’s a percentage of the employee’s salary, so costs can vary.

Be cautious with percentage-based pricing. Global employment expenses can vary greatly, but a reliable EOR will account for these costs and provide an upfront estimate. Percentage-based fee structures can encourage companies to keep salaries low, which benefits third-party providers.

Remote offers its EOR service at $599 per month (if paid annually) or $699 per month (if paid monthly). There are no hidden fees, minimums, long-term contracts, or exclusivity agreements. Choose the plan that works best for your team. Visit our pricing page to see how easy and affordable it is to expand your global team.

The primary duty of an Employer of Record (EOR) is to be the legal employer for your staff in other countries, thereby protecting your company from liability and compliance risks by employing workers legally on your behalf.

An EOR also takes care of the complicated HR tasks involved in international hiring. Each country has its own rules about payment frequency, allowed currencies, mandatory leave, and more. EORs manage all these complexities, enabling you to focus on growing your business rather than administrative tasks.

It’s crucial to understand that an EOR does not manage the daily tasks or performance of your employees. You work with employees hired through an EOR the same way you work with your own staff. The only difference is that the EOR handles the paperwork.

An Employer of Record (EOR) is a third-party provider that legally employs your staff in other countries. The EOR manages various administrative responsibilities, such as payroll for international employees. When you hire someone abroad through an EOR, you provide the necessary funds, and the EOR handles salary distribution, tax withholdings, social security contributions, and retirement accounts.

Using an EOR helps you manage the complexities of international payroll while ensuring compliance with local laws. This means you can hire workers in other countries without needing to master their payroll systems. You focus on finding the right talent, and the EOR takes care of all the administrative work.

When evaluating Employer of Record (EOR) services, consider how many countries they offer direct services in, the scope of global HR solutions they provide (like payroll, benefits administration, onboarding, and local taxes), and their ability to ensure compliance with local regulations. The quality of their user interface is also important.

It's best to work with an EOR that owns its own local entity in the country where you want to hire. If they don't, your employees might be managed by an unknown third party, leading to issues with oversight and service quality.

Additionally, your EOR should offer robust protections for your intellectual property. Without these protections, you could end up in lengthy legal disputes over IP ownership in various countries.

Key questions to ask include:

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

• How do you protect intellectual property and invention rights here?

• Is employee data shared with any third parties?

• Do you keep all employee documentation in a single, accessible hub?

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

Using an Employer of Record (EOR) is fully legal in most countries worldwide. However, you’ll achieve the highest level of compliance by choosing EORs that have their own business entities in the countries where you plan to hire.

Before engaging with an EOR, ensure they own a local entity and have the necessary expertise to handle properly localized payroll, health benefits, taxes, and any other compensation like stock options. This will ensure that all employment-related matters are managed correctly and in compliance with local laws.