The answer is yes, but you need to either set up your own legal entity or hire workers as contractors. Both methods have their pros and cons.

Setting up your own legal entity involves managing your presence in the country, including hiring lawyers, payroll specialists, benefits administrators, and other professionals. This is worthwhile if you’re planning to hire hundreds of people, but for smaller numbers (a few or even a couple dozen), an EOR is more cost-effective.

If you hire contractors, you must be diligent. International contractor misclassification is a major issue and can lead to hefty fines and penalties. Using an EOR protects your business from compliance risks by turning contractors into employees.

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

It's critical to recognize that not all EORs function identically. For instance, some EORs, like Remote, possess their own legal entities in each country they operate in. Others act merely as intermediaries without owning any entities. Additionally, some EORs might use a mix of their own entities and those of partners. It's vital to pick an EOR that aligns with your employment compliance needs in the countries where you plan to hire.

A Professional Employer Organisation (PEO) typically does not directly hire or employ workers. Instead, an Employer of Record (EOR) takes on that role, hiring employees for you in other countries. PEOs are often involved in “co-employment” arrangements, where they manage payroll, benefits, and other HR functions while your company takes care of other responsibilities. If you need to hire in a country where you don’t have a legal entity, you’ll need an EOR. Generally, using a PEO still requires your business to have a legal entity in any country where you have employees.

To summarise: if you want to hire someone in a country where you don’t have a legal entity, you need an EOR. If you need help managing HR functions like payroll and benefits in a country where you already have a legal entity, a PEO might be beneficial. Essentially, a PEO offers HR support but doesn’t handle the legal employment of your staff in other countries.

Explore the differences between an EOR and a PEO in our informative guide.

The cost of an Employer of Record (EOR) service is usually structured as either a flat fee or a percentage of the employee’s salary. Flat fees are consistent per employee, regardless of their job or salary. Percentage-based models charge a percentage of the salary, which means the cost can fluctuate.

Be aware of percentage-based pricing models. Employment costs can be unpredictable globally, but a good EOR will account for these variations and provide a clear upfront cost. Percentage fees might drive companies to lower salaries, benefitting the third-party provider.

Remote’s EOR service costs $599 per month (when paid annually) or $699 per month (when paid monthly). There are no hidden fees, minimums, long-term contracts, or exclusivity agreements. Choose the plan that works best for your team. Check our pricing page to see how easy and affordable growing your global team can be.

The main responsibility of an Employer of Record (EOR) is to act as the legal local employer for your overseas employees, shielding your company from liability and compliance risks by hiring workers legally on your behalf.

An EOR also takes care of the complex HR tasks associated with hiring internationally. Different countries have their own regulations for pay frequency, accepted currencies, mandatory paid leave, and more. EORs manage these details, allowing you to spend more time growing your business and less time on administrative tasks.

Importantly, an EOR does not manage the employee’s tasks or performance. You work with employees hired through an EOR just as you do with your direct employees. The only difference is who handles the paperwork.

An Employer of Record (EOR) is a third-party service that legally employs your workers in other countries. The EOR handles a variety of administrative tasks, including payroll management for international staff. When you hire someone abroad through an EOR, you transfer the funds to the EOR, which then manages salary payments, tax deductions, CPF contributions, and other legal requirements.

Working with an EOR simplifies the complexities of international payroll and ensures compliance with local regulations. This allows you to hire employees in other countries without becoming an expert in their payroll laws. You can concentrate on finding the right candidate, and the EOR will take care of the administrative tasks.

When comparing Employer of Record (EOR) services, it's important to evaluate the number of countries where they offer direct services, the variety of global HR solutions provided (such as payroll, benefits administration, onboarding, and local taxes), and their compliance thoroughness in each country. The quality of their user interface should also be taken into account.

It's advisable to work with an EOR that owns its own local entity in the country where you want to hire. If not, your employees might be managed by a third party you have no control over, which can affect their experience and your oversight.

Moreover, your EOR should provide strong protections for your intellectual property. Without such protections, you could face difficult legal disputes over IP ownership across different 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 in this country?

• Do you share employee data with third parties?

• Is all employee documentation stored in a single, easily accessible hub?

Remote owns all our entities, provides industry-leading IP protections and data security, and offers top-notch global employment software to meet your needs.

Engaging an Employer of Record (EOR) is legal in most countries. However, for the highest level of legal compliance, it's best to choose EORs that have their own business entities in the countries where you plan to hire.

Before you start working with an EOR, make sure they own a local entity and possess the expertise to manage localized payroll, health benefits, taxes, and any other compensation like stock options. This ensures that all employment aspects are handled correctly and in compliance with local laws.