Employer of Record (EOR): The Complete Guide to Hiring Globally Without an Entity

Hiring internationally is no longer a fringe strategy — but setting up legal entities in every country is slow, expensive, and risky.

That gap is where the Employer of Record (EOR) model fits.

This guide explains what an Employer of Record is, how it works in practice, how much it really costs, the risks involved, and when an EOR is (and is not) the right solution for your business.

If you’re evaluating platforms like Deel, Papaya Global, Remote, or Oyster — start here.

Employer of Record (EOR) service lets you hire international employees without creating local entities. We become the legal employer on paper, managing contracts, onboarding, benefits, and compliance while you manage day-to-day work. This protects your business from compliance risks and accelerates your time-to-hire—ideal for entering new regions or expanding rapidly.

EOR Compliance Risks (And How to Mitigate Them)

Using an EOR does not eliminate all legal exposure.

Key Risks

• Permanent establishment risk

• Misclassification disputes

• Data privacy and GDPR violations

• Poor handling of terminations

• Inadequate statutory benefits

How to Reduce Risk

• Choose providers with direct local entities

• Review contracts carefully

• Understand country labor laws

• Plan exit scenarios early

An EOR is a compliance partner — not a legal guarantee.

Contractor vs EOR: A Common Mistake

Many companies hire contractors to avoid EOR costs — then face reclassification penalties.

If a worker:

• Works full-time

• Has fixed hours

• Reports to your managers

• Uses your tools

They are likely an employee, not a contractor.

In such cases, an EOR is safer than contractor arrangements.

Popular Employer of Record Providers

Some well-known EOR platforms include:

• Deel

• Papaya Global

• Remote

• Oyster

• Multiplier

Each serves different company sizes and complexity levels.

Transitioning From EOR to Local Entity

Many companies use EORs as a stepping stone.

A transition typically happens when:

• Headcount reaches 15–20+ in one country

• Costs outweigh entity setup

• Long-term presence is confirmed

Planning this transition early prevents disruption.

Choosing the Right Employer of Record Provider

Not all EORs are created equal.

Evaluate providers based on:

• Country coverage and depth

• Local legal expertise

• Payroll accuracy

• Termination support

• Transparency of pricing

• Ability to scale or exit

Avoid choosing solely based on price.

EOR Is Ideal For

Fast global hiring

Testing new markets

Distributed teams

Cost-efficient expansion

Tools to Evaluate EOR Decisions

People & Finance offers free tools to support EOR evaluation:

• EOR Cost Calculator

• Country Hiring Risk Matrix

• Expansion Readiness Scorecard

These tools help model cost, risk, and timing.

Hire Globally with Zero Risk – Talk to Our EOR Experts

Employer of record, hire globally, global employment, EOR services, international hiring

$199

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Hidden Costs to Watch For

• Termination and severance fees

• Benefit administration markups

• FX and cross-border payment fees

• Country exit costs

• Contract amendment fees

Understanding the total cost of ownership is critical.

For Employer of Record (Hire & Pay Anywhere)

Hire employees anywhere without setting up entities. Our EOR service manages compliance, payroll, HR, taxes, and contracts globally.

The easiest way to hire international employees legally—without opening an entity or dealing with local compliance.

Papaya Global

Deel

Top Global EOR Providers