Expanding a global presence is a smart strategy for any growing business. Hiring international talent is an excellent approach to tapping into new foreign markets, and a global Employer of Record (EOR) can help you along that trajectory.
An EOR lets you hire the best people wherever they are, without getting caught up in foreign labor laws or spending time and money to set up legal entities. Simply put, you get the talent, while we handle the compliance.
This guide explains what an EOR does, how it works, and the benefits of partnering with a global EOR to achieve your global expansion and hiring goals.
What is an employer of record?
An employer of record (EOR), also often called a global employment organization, allows companies to legally engage with employees across international borders without having to set up a local entity or risk violating local country or state employment laws. It is a third-party organization that becomes the full legal employer of your workforce and assumes all employer-related responsibilities and tasks on behalf of your company. An EOR takes on a company’s human resources responsibilities and onboards, pays, manages, supports, and offboards your supported employees while you maintain and control the day-to-day operations.
Think of an EOR as your legal stand-in. They become the official employer on paper while you keep doing what you do best: running your business and managing your team. It’s like having a local HR department in every country, without setting one up.
What does an employer of record do?
An EOR lets you hire talent in the global marketplace while fully complying with local employment regulations, without establishing legal entities in each country. We manage the complexities of international employment, including payroll processing, tax withholdings, statutory benefits, and work authorization requirements. This comprehensive support means you can concentrate on your core business priorities: developing your team, driving performance, and scaling your operations. Your day-to-day stays the same, and you keep complete authority over managing your employees. We ensure every aspect of the employment relationship meets legal requirements and local best practices.
Here’s what a global EOR handles so you don’t have to:
- Drafts and maintains locally compliant employment contracts
- Manages all payroll and tax withholdings
- Pays your employees on time
- Offers comprehensive and statutory benefits
- Makes sure when employees leave, they offboard legally
- Keeps on top of local labor laws and regulations
Benefits of an employer of record
A global employer of record partner transforms how you build international teams. Most companies lack the specialized knowledge and resources to navigate employment laws in multiple countries, and why should they? That’s not your core business. An EOR partnership gives you the freedom to hire exceptional talent wherever they live, while ensuring they receive locally competitive benefits and compliant employment terms.
Here’s what that means for your business:
- Save the cost of legal setup (no entities, no local offices required)
- Onboard your new hire quickly (in days, not months)
- Keep your best people happy with locally competitive employee benefits
- Maintain compliance with employment contracts and evolving labor laws
- Receive ongoing HR support
When to use an EOR?
An employer of record is a valuable partner when it comes to balancing a global workforce and navigating global markets. A global EOR allows businesses to:
Explore new markets
If part of your business strategy is to expand globally and you want to explore a new market like Germany, you can hire local talent through an EOR and test the waters. No office lease, no legal entity, no massive upfront investment. Just real people selling your product in a new market—legally and properly.
Attract and retain top talent
Today’s labor market considers the ability to work anywhere a highly desirable benefit. The competition to attract top talent is as fierce as ever, as more and more companies are turning to remote options for their workforce. Before partnering with an EOR, you’d lose them. Now, you get to keep your best people no matter where life takes them. Plus, you can hire that amazing candidate in Tokyo without wondering how to make it legal.
Hire employees during entity setup
Setting up a legal entity takes months. Your perfect hire won’t wait that long. A global EOR lets you bring them on board today while your lawyers handle the paperwork. By the time your entity is ready, your team is already crushing it.
Avoid misclassification of contractors
An alternative to hiring international employees or establishing an entity in another country is to engage contractors instead. Many companies use contractors as a cheaper option to hire remote, international talent. However, once a company grows large enough, it faces a substantial risk of worker misclassification. A global EOR provides an efficient way to hire contractors as employees to avoid compliance risks.
Read more in our complete guide to employee and contractor misclassification.
How to choose an employer of record partner
There are several important considerations to make when selecting an EOR partner:
- Transparent pricing. You want to know what you’re paying upfront—not discover hidden EOR fees when your first invoice arrives. Look for partners who give you transparent pricing from day one.
- Accurate employer burden calculations. Your EOR provider should know exactly what employer burden costs you’d incur to employ someone in Prague versus São Paulo—including all the taxes, benefits, and social contributions you’ve never heard of. If they’re guessing, you’ll pay for their mistakes.
- Worldwide coverage in markets you need. Don’t let someone learn Brazilian labor law on your dime. Find EOR partners who already know the markets where you want to hire—deeply, not just on paper.
- They answer when you call. When your new hire in Singapore has a benefits question, you need answers fast. Look for an EOR who responds quickly, speaks the local language, and works in your time zones.
- Independent third-party validation. Check who else considers that employer of record an industry leader and trusts them. Industry reports and client testimonials tell you more than any sales pitch about who delivers on their promises.
Download the latest Everest Group PEAK Matrix and NelsonHall NEAT reports to compare global EOR leaders based on criteria such as industry expertise, scale, suite of solutions, and client support.
Where an EOR partner makes the biggest difference
Great talent lives everywhere. The trick is hiring them legally, wherever they are. Here’s how an EOR service opens doors in markets that used to be off-limits.
United Kingdom
Want that brilliant developer in Manchester or financial analyst in London? U.K. employment law is a maze of pension requirements, contractor rules, and post-Brexit regulations that change faster than you can track them. An employer of record in the U.K. handles the IR35 contractor classifications and statutory leave requirements, so you can hire British talent without becoming a U.K. employment law expert.
Germany
Germans take employment law seriously. To hire that amazing engineer in Berlin, you’ll need to navigate works councils, collective bargaining rules, and social security requirements that would make your head spin. Plus, if you ever need to let someone go, Germany’s termination procedures are legendary for their complexity. An EOR in Germany handles all of this, so you can hire German talent without learning German employment law.
Netherlands
The Dutch have work-life balance figured out, and they’ve written it into law. That brilliant developer in Amsterdam expects their 8% holiday allowance, work-from-home stipend, and flexible working arrangements because they’re legally required. A Dutch employer of record makes sure your employees there get precisely what they’re entitled to, without you having to decode Netherlands payroll regulations.
Canada
Canada feels familiar until you try to hire there. That data scientist in Toronto follows different rules than the one in Montreal, and if you’re hiring in Quebec, everything should be in French. Each province has its own employment standards, holiday calculations, and tax requirements. An EOR in Canada handles the provincial differences and visa paperwork, so you can hire Canadian talent without learning 10 different sets of labor laws.
Australia
Australia’s Modern Awards system makes every industry different, what works for hiring a marketing manager won’t work for a software developer. Add in superannuation requirements, long service leave, and enterprise bargaining agreements, and you’ve got a compliance puzzle that changes by job type. An Australian EOR knows which rules apply to which roles, so you can hire that perfect candidate in Sydney without becoming an expert in Australian employment law.
India
India isn’t just about IT anymore, you’ll find incredible talent in fintech, biotech, and manufacturing. But here’s the catch: each state has different labor laws, professional tax rates, and compliance requirements. What’s legal in Mumbai might not fly in Bangalore. An Indian employer of record handles India’s complex state-by-state regulations and newly reformed labor codes, so you can hire Indian talent without getting lost in 29 different sets of rules.
Brazil
Brazil’s dynamic market offers unprecedented access to Latin America’s robust consumer base and skilled workforce across multiple sectors. However, Brazil’s landscape of labor compliance is complex. That brilliant marketing manager in São Paulo expects a 13th-month salary, mandatory profit-sharing, and contributions to something called FGTS (a severance fund you’ve probably never heard of). An EOR in Brazil handles the 13th-month calculations, profit-sharing schemes, and constantly changing regulations, so you can hire Brazilian talent without needing a law degree in Portuguese.
Singapore
Singapore’s reputation as Asia’s premier business hub stems from its transparent regulatory environment and strategic location at major trade route intersections. Regular updates to the Employment Act reflect the city-state’s commitment to balancing business competitiveness with worker protection.
Singapore makes business easy until you try to hire there. Hiring that fintech expert in Singapore means you’ll need to navigate foreign worker quotas and salary thresholds set by the Fair Consideration Framework. Singapore updates these rules regularly to balance local hiring with international talent needs. An EOR in Singapore handles the quota calculations and compliance requirements, so you can hire Singaporean talent without tracking every regulatory update.
EOR vs. PEO: What’s the difference?
The key difference between an employer of record (EOR) and a professional employer organization (PEO) is that an EOR becomes the legal employer of your international team, taking complete responsibility for compliance and employment obligations. On the other hand, a PEO shares employer responsibilities with you. That makes you co-employers, meaning you still carry legal liability and compliance requirements.
EOR vs. staffing agency: What’s the difference?
The core differences between an EOR and a staffing agency are straightforward. Staffing agencies find and place temporary workers for short-term projects or to fill gaps. EORs enable you to permanently employ people you’ve already chosen—they don’t recruit; they make the employment legal and compliant. Think of it this way: if you need someone for a three-month project, call a staffing agency. If you’ve found your next full-time software engineer who happens to live in Tokyo, you need an EOR to make that permanent hire possible without setting up a Japanese entity.
Hire talent anywhere with an employer of record
Global hiring doesn’t have to be complicated. You identify the talent you need, and Pebl’s EOR services manage the full spectrum of legal and compliance requirements. With coverage in 185+ countries, we’ve navigated every employment regulation, tax structure, and compliance scenario across the globe. The result is clear: you build the team that drives your business forward, while we ensure every employment relationship meets local legal standards and best practices.
Ready to expand your team internationally? Let us know where you want to hire, and we’ll show you exactly how Pebl makes it possible.
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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Topic:
Employer of Record
