You’ve just had the interview of a lifetime. The candidate is brilliant, experienced, and exactly what your growing company needs—there’s just one small problem. They’re sitting in Mumbai while you’re based in Toronto. Or maybe you’re in London, and they’re in San Francisco.
Whatever the geography, the challenge remains the same. You want to hire them, but they need legal permission to work for you. This is where visa sponsorship comes in. It’s the bridge that connects talented professionals with the companies that need them, regardless of borders.
Essentially, an employer sponsors a foreign worker’s visa application, vouching for their employment and helping them obtain legal work authorization in the company’s country. Think of it as a formal introduction between a worker and a government, with the employer acting as the trusted intermediary.
The traditional route involves your company becoming the direct sponsor—handling all the paperwork, legal requirements, and compliance headaches yourself. The alternative? Partner with an Employer of Record (EOR) and let them sponsor the talent while you maintain day-to-day management of your new hire.
Both approaches get you to the same destination, but the journey looks dramatically different. The costs vary, the timelines shift, and the risks change. We’ll dig into what each path actually means for your budget, your timeline, and your peace of mind.
What is visa sponsorship?
Visa sponsorship is a legal process where an employer takes responsibility for bringing a foreign worker into their country. The company essentially tells the government, “We need this person, we have a legitimate job for them, and we’ll make sure they follow all the rules.” It’s part bureaucracy, part promise, part paperwork mountain.
The requirements sound straightforward until you start digging into the details. Most countries want proof of a genuine job offer, evidence that you couldn’t find a local worker to fill the role (hello, labor market testing), and confirmation that your business is properly registered and established. Then come the government filings, which vary wildly depending on the visa type and destination country.
Here’s where things get expensive fast. You’re looking at application fees that can range from hundreds to thousands of dollars per person. Add legal support to navigate the complexity, compliance checks to avoid costly mistakes, and don’t forget about renewals down the road. What starts as a simple hiring decision quickly becomes a significant budget line item with ongoing costs that can surprise even experienced HR teams.
Direct visa sponsorship: Cost breakdown
When you decide to handle visa sponsorship yourself, you’re essentially starting your own mini immigration law firm. The costs stack up quickly, and many are hidden until you’re already knee-deep in the process.
- Government fees. Hit you first and hardest. Visa application charges can range from a few hundred to several thousand dollars, depending on the country and visa type. Labor market testing fees add another layer, requiring you to prove you advertised the role locally before hiring internationally.
- Legal and compliance costs. These are unavoidable unless you have immigration expertise in-house. Most companies hire specialized immigration lawyers who charge $300 to $500 per hour or more. Even with legal help, you’ll need dedicated HR or legal staff to manage the process internally.
- Entity setup expenses. Can blindside growing companies. If you want to sponsor someone in Germany but don’t have a German entity, you’re looking at incorporating a subsidiary first. This process alone can cost $5,000 to $15,000 before you even begin the visa paperwork.
- Ongoing compliance. It never stops. Visa renewals come every few years with fresh fees and paperwork. Reporting obligations to government agencies requires regular attention. Compliance audits can trigger unexpected legal bills and administrative scrambles.
- Internal admin time. This hidden cost surprises most employers. Someone needs to gather documents, track deadlines, communicate with immigration authorities, and coordinate between departments. This administrative burden can consume weeks of staff time per sponsorship.
Take hiring a software engineer in the U.K. as a real example. Government fees may range from £2,000 to £3,000 and legal support could add £3,000 to 5,000. If you need to set up a U.K. entity first, add an additional £5,000 to £8,000. Factor in internal time and ongoing compliance, and you’re easily looking at £8,000 to £15,000 or higher for a single hire.
Cost of visa sponsorship via EOR
The EOR approach flips the traditional sponsorship model on its head. Instead of building your own immigration infrastructure, you’re essentially renting someone else’s expertise and legal framework.
- EOR service fees. These operate on a predictable model that most finance teams love. You typically pay a flat monthly or annual rate per employee, usually ranging from $500 to 800 per month depending on the country and service level. This fee covers the sponsorship process and ongoing employment management.
- Government fees. They still exist, but they become the EOR’s responsibility. The EOR pays visa application charges, labor market testing fees, and other regulatory costs as part of their service. You know these expenses are covered without tracking individual government fee schedules across different countries.
- Compliance management. This is the EOR’s bread and butter. They handle reporting obligations, track renewal deadlines, and manage regulatory changes. This eliminates the need for specialized compliance management staff on your payroll.
- No entity setup cost. This represents one of the biggest advantages. The EOR uses its existing local registration and legal presence to sponsor your employee. You skip the expensive and time-consuming process of incorporating a subsidiary just to hire one person.
- Administrative efficiency. The EOR handles the entire application lifecycle. They gather documents, submit applications, communicate with immigration authorities, and manage renewals. Your internal team focuses on onboarding and managing the actual employee, not wrestling with visa paperwork.
Consider that same software engineer, but this time hiring in Germany through an EOR. Visa processing might cost $1,000 to 2,000 upfront, plus monthly EOR fees of around $600 to 700. No entity setup. No legal scrambling. Total first-year cost could land around $8,000 to 10,000 with significantly less complexity and risk.
Considerations beyond cost
Cost alone doesn’t tell the whole story when choosing between direct sponsorship and EOR services. Several operational factors can make or break your international hiring strategy, regardless of the initial price tag.
Speed to hire
EOR services typically move faster because they already have the local infrastructure in place. Their legal entities are established, their relationships with immigration authorities are active, and their processes are refined through repetition. While direct sponsorship might require weeks or months to set up entities and establish government relationships, EORs can often begin processing applications immediately.
Risk management
The EOR assumes the role of legal employer, which shifts significant compliance risk off your shoulders. If immigration authorities discover paperwork errors or missed deadlines, the EOR faces fines and legal consequences—not you. This protection becomes especially valuable in countries with hefty penalties for non-compliance. Your company maintains operational control, the EOR handles regulatory exposure.
Scalability
Expanding into multiple countries through direct sponsorship means repeating the entire setup process for each new market. With an EOR, you gain access to their existing presence across dozens of countries through a single partnership. This approach transforms international hiring from a country-by-country project into a streamlined global strategy.
Employee experience
EORs typically provide smoother onboarding experiences because they understand local employment practices and cultural expectations. They handle payroll in local currency, manage benefits administration, and ensure compliance with local labor laws. Your new hire gets professional support throughout the visa process and employment lifecycle, reducing stress and uncertainty during their transition.
Visa type
The specific visa category dramatically affects both cost and complexity. H1B visas in the U.S. involve a lottery system, higher government fees (ranging from $4,000 to $ 6,000), and strict annual caps that create timing pressures. U.K. Skilled Worker visas have different fee structures than older Tier 2 categories.
EU Blue Cards vary significantly between member countries. Investment and entrepreneur visas typically cost much more but offer different pathways. EOR services excel here because they specialize in navigating these visa-specific requirements and can recommend the most cost-effective visa type for each situation.
EOR or direct sponsorship: What’s the better fit?
The choice between direct sponsorship and EOR services comes down to your company’s specific situation and timeline. Direct sponsorship makes the most sense when you’re planning a serious, long-term commitment to a particular country. If you expect to hire multiple employees in the same location over the next few years, the upfront investment in entity setup and legal infrastructure pays for itself through economies of scale.
Direct sponsorship also appeals to companies that want complete control over the employment relationship. Some organizations prefer handling payroll, benefits, and compliance internally to maintain consistent policies across all locations. This approach works best for established companies with dedicated international HR teams and the budget to support ongoing compliance management.
EOR-sponsored visas thrive when you need to move fast or test the waters. Hiring your first employee in Japan or Brazil becomes dramatically simpler when you can skip entity setup entirely. Project-based work, small teams, or single critical hires often cost less through an EOR than building your own infrastructure.
Partnering with an EOR makes particular sense for companies exploring new markets. You can hire local talent, understand the business environment, and gauge market potential before committing to permanent establishment. If the market proves successful, you can always transition to direct sponsorship later. If not, you avoid the complexity and cost of shutting down a foreign entity.
Meet Pebl: your future EOR partner
When you’re ready to hire that brilliant candidate in Mumbai, Berlin, or São Paulo without the headaches of entity setup and compliance management, Pebl makes it happen. Our global EOR services take care of visa sponsorship, payroll, benefits, and compliance across dozens of countries, so you can focus on what matters most: building your team and growing your business. Contact us to learn more.
This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.
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