The short answer is yes, but you either need to set up a legal entity in South Africa or hire workers as contractors. Both strategies have their pros and cons.

Setting up your own legal entity means you'll handle your entire presence, including hiring lawyers, payroll specialists, benefits administrators, and other professionals. This can be beneficial if you're hiring hundreds of people, but for smaller numbers (even a few dozen), an EOR might be more cost-effective.

Hiring contractors requires caution. International contractor misclassification is a serious issue that can lead to hefty fines and penalties. An EOR helps protect your business from compliance 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 important to note that EORs don't all operate the same way. Some, like Remote, own their own legal entities in every country they work in, whereas others serve as intermediaries without owning any entities. Some EORs may use both their own entities and those of partners. Selecting an EOR that meets your employment compliance needs in the countries where you wish to hire is essential.

A Professional Employer Organisation (PEO) does not generally hire or employ workers directly. An Employer of Record (EOR), however, hires employees on your behalf in different countries. PEOs often operate under a “co-employment” arrangement where they manage payroll, benefits, and other HR duties, while your company handles other responsibilities. If you want to hire in a country where you don’t have a legal entity, you will need an EOR. Typically, using a PEO still means your business must have a legal entity in any country where you employ workers.

Think of it like this: if you want to hire someone in a country where you don't have a legal entity, you will need an EOR. If you require assistance with HR tasks such as payroll and benefits in a country where you already have a legal entity, a PEO might be suitable. Essentially, a PEO provides HR support but does not handle the legal employment of your staff in other countries.

Check out the differences between an EOR and a PEO in our detailed guide.

Employer of Record (EOR) costs are typically based on either a flat fee or a percentage of the employee’s salary. Flat fees are fixed per employee, no matter their role or salary. Percentage models charge a portion of the employee’s salary, which can lead to varying costs.

Be cautious of percentage-based pricing structures. Global employment costs can vary widely, but a good EOR will take these fluctuations into account and provide a clear cost upfront. Percentage-based fees can encourage companies to keep salaries low, funneling more money to the service provider.

Remote’s EOR pricing is straightforward: $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. Select the plan that suits your team best. View our pricing page to see how simple and affordable it can be to expand your global team.

An Employer of Record (EOR) serves as the legal employer for your staff in other countries, protecting your business from liability and compliance risks by legally hiring employees on your behalf.

An EOR also handles the intricate HR tasks that come with hiring internationally. Countries have different regulations for pay frequency, currencies, mandatory leave, and more. EORs take care of these complexities, freeing you up to focus on hiring and expanding your business.

Notably, an EOR does not manage the daily tasks or performance of your employees. You interact with employees hired through an EOR the same way you do with your in-house staff. The only difference is that the EOR handles the paperwork.

An Employer of Record (EOR) acts as a third-party employer for your staff in different countries. The EOR handles key administrative tasks, such as payroll management for international employees. When you hire someone through an EOR, you provide the necessary funds, and the EOR takes care of salary disbursements, tax deductions, social security contributions, and retirement plans.

Using an EOR allows you to manage the challenges of international payroll while adhering to local laws. This means you can hire employees abroad without needing to understand the intricacies of foreign payroll regulations. Focus on selecting the right talent, and let the EOR manage the administrative details.

When assessing Employer of Record (EOR) services, it’s crucial to 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), and their compliance capabilities in each country. The quality of the user interface is also important.

Ensure your EOR owns its own local entity in the country where you intend to hire. If they don’t, your employees could end up employed by an unknown third party, leading to potential oversight and quality control issues.

Your EOR should also offer strong protections for your intellectual property. Without these protections, you might face legal battles over IP ownership in different countries, which can be costly and time-consuming.

Consider asking these questions:

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

• How do you ensure the protection of intellectual property and invention rights here?

• Is employee data shared with third parties?

• Do you store all employee documentation in one central, easily accessible hub?

Remote owns all its entities, provides the best IP protections and data security in the industry, and offers leading global employment software to support your needs.

Hiring an Employer of Record (EOR) is legally acceptable in most nations. However, you’ll get the best compliance results by working with EORs that have their own entities in the countries where you want to hire.

Before partnering with an EOR, confirm that they own a local entity and have the necessary knowledge to handle localized payroll, health benefits, taxes, and any other forms of compensation like stock options. This ensures that all employment matters are properly managed and compliant with local regulations.