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A global employer of record (EOR) is a third-party company that legally employs your workers in 100+ countries on your behalf, running payroll, tax, benefits, and compliance under a single contract so you can hire abroad in 1 to 3 weeks without setting up a foreign entity.
What Most Buyers Get Wrong About A Global EOR
Six things we wish every founder knew before their first vendor call.
- The map lies. “100+ countries” almost always blends owned-entity, partner-entity, and contractor-routing tiers. Ask which tier each country in your roadmap is on.
- The headline price isn’t the bill. Plan on 7% to 10% on top of gross payroll once FX markup, statutory contributions, and severance reserves are added. The “$599/employee/month” number is a fraction of the real cost.
- EOR is not PEO. EOR is sole-employer across borders; PEO is US-only co-employment that already requires you to be registered locally. Mixing the two up costs founders weeks.
- Some countries are off-limits. Germany past 18 months (AÜG), Switzerland without a Personalverleih licence, and China without FESCO routing all carry reclassification risk that lands on you.
- You will outgrow it. Plan the migration to your own entity in advance: 10 to 15 employees in low-cost jurisdictions, 20 to 30 in high-cost ones is the trigger.
- Equity is country-specific. RSUs and options pass through differently in the UK, France, and China. A capable provider has playbooks for the top 20 countries; the rest are case-by-case.
You found the perfect engineer in Lisbon, the SDR in Berlin, and the data scientist in Bangalore. Then your finance team asked which entity would pay them, and the project stalled for nine months. That is the problem a global employer of record solves in two weeks.
A global employer of record (EOR) is a company that legally employs your workers in countries where you have no entity, handling payroll, benefits, taxes, and labour-law compliance on your behalf while your team manages the day-to-day work. Think of it as renting a fully licensed local employer in 100+ countries so you can hire, pay, and offboard talent in weeks instead of months. The model exists because spinning up a foreign entity costs six figures and 4 to 9 months of legal work. A global EOR collapses that to a contract and a country selector.
We have set up EOR arrangements in 60-plus countries for our clients, and almost every project hits the same potholes. This guide is the playbook we wish we had on day one: what a global EOR actually does, how it is different from a domestic EOR and a PEO, what country coverage really means once you read past the marketing map, the cost line items vendors quietly leave off the proposal, and the framework we use with founders and HR leads to decide between renting an EOR seat and standing up their own foreign payroll.
If you already know you need help, jump to our global employer of record service . Used by 200+ companies to hire across 60+ countries. Otherwise, read on.
Why Global EORs Exist
Hiring across borders runs into a wall the moment you draft the offer letter. To pay someone legally in Brazil, France, or Singapore you need a registered employer entity in that jurisdiction. That means a local company, a local bank account, registration with the tax authority, social-security enrolment, mandatory benefits, vacation accrual rules, payslip formats, and a labour-law contract that holds up in front of the local court if anything goes wrong.
For a single hire, the math is brutal. A German GmbH runs roughly 25,000 EUR to set up, takes 4 to 6 months, and needs a managing director resident in the EU. India, China, and the UAE all have similar friction. Even Singapore, which sells itself as easy, expects local directors and ongoing accounting filings. And once the paperwork is done you still need a local payroll vendor, a local benefits broker, and someone who can read the labour code in the local language. For one engineer.
A global EOR removes the wall. The provider is already registered as the legal employer in every country it covers. You sign one master service agreement with the EOR and a country addendum per hire. The EOR signs the local employment contract with your worker, runs local payroll, files local taxes, administers statutory and supplementary benefits, and absorbs the employer-side liability. You direct the work, set the salary, manage performance, and own the relationship with the person. The EOR owns the paperwork.
This matters most for three groups: start-ups making their first international hire, scale-ups expanding into countries where headcount will stay below 10 for the foreseeable future, and large enterprises testing a market before committing to a permanent legal presence. If any of those sound like you, a global employer of record service is usually the lowest-friction way to start.
How A Global EOR Works in 5 Steps
The mechanics are simpler than the marketing pages make them sound. Here is the sequence from contract signing to the first payslip.
- Sign once. You sign a master service agreement with the EOR plus a country addendum per hire.
- Local contract. The EOR drafts a compliant local employment contract in the worker’s jurisdiction and language.
- Onboard. The EOR runs identity, right-to-work, tax-ID, and social-security enrolment, usually in 1 to 3 weeks.
- Run payroll. Each month the EOR calculates gross-to-net, files local taxes, pays the worker in local currency, and invoices you in your currency.
- Manage the lifecycle. The EOR handles benefits, leave, compliance updates, and offboarding while you direct the day-to-day work.
What Does A Global EOR Actually Do?
“Employer of record” is a tidy phrase that hides a lot of work. The scope below is what we expect any competent provider to take off your plate. If a vendor cannot speak to all eight in the discovery call, walk away.
- Local employment contract. Drafted to local labour code, in local language where required, with the right notice periods, probation rules, and termination clauses for that jurisdiction.
- Onboarding and right-to-work checks. Identity verification, tax IDs, social-security enrolment, work-permit verification, and any sector-specific licence checks.
- Monthly payroll. Gross-to-net calculation, statutory deductions, employer contributions, payslip generation in the local format, and salary disbursement in local currency.
- Tax filings. Income-tax withholding, social-security contributions, year-end reconciliation, and the various local equivalents (PAYE, RPS, IRPF, depending on country).
- Statutory and supplementary benefits. Mandatory health cover, pension or provident fund enrolment, vacation accrual, parental leave, plus optional top-ups (private health, life insurance, meal vouchers, and so on).
- HR administration. Time-off tracking, payslip distribution, expense reimbursement workflows, sick-leave management, and the small-but-relentless paperwork that follows every employee.
- Compliance monitoring. Tracking labour-law changes, minimum-wage updates, statutory bonus rules (think Mexico’s aguinaldo or India’s gratuity), and updating contracts when local rules shift.
- Termination and offboarding. Notice periods, severance calculations, final-payslip processing, withdrawal from social security, and where required, mandatory exit interviews or government notifications.
That is the core. Stronger global EORs add equity-pass-through support for stock options or RSUs, immigration sponsorship, depth on contractor classification, integration with your HRIS, and dedicated implementation managers for multi-country rollouts. Anything outside this scope (recruiting, performance management, day-to-day work direction) stays with you.
Global EOR vs Domestic EOR vs PEO vs AOR vs RPO
The acronym soup confuses most first-time buyers. Here is the cleanest side-by-side we have built.
| Model | Who is the legal employer | Geography | Best for |
|---|---|---|---|
| Global EOR | EOR’s local entity in each country | 100+ countries via one contract | Cross-border hiring without your own foreign entity |
| Domestic EOR | EOR’s entity in one country (typically the US) | Single country | US-based companies hiring across US states without registering in each |
| PEO (Professional Employer Organization) | Co-employment: PEO and you both employ the worker | Almost always one country (US) | US companies pooling benefits and HR services across employees they already employ |
| AOR (Agent of Record) | You stay the contracting party; AOR handles contractor admin | Global | Independent contractors, not employees |
| RPO (Recruitment Process Outsourcing) | You remain the legal employer; RPO partner runs the hiring funnel | Global | High-volume hiring, niche regional sourcing, gaps in your internal TA team |
One other model often confused with EOR is RPO. You outsource part or all of your recruiting function to a specialised partner: sourcing, screening, sometimes hiring. It is best for high-volume hiring sprints, niche regional sourcing, or covering capability gaps in your internal TA team. The trade-off is cost per hire and a small loss of cultural-fit precision unless the RPO is deeply embedded. RPO does not replace an EOR; the two stack (RPO finds the person, EOR employs them). For a closer look at how this works in practice, see our international recruitment agency service.
The most common mix-up is PEO vs EOR. A PEO is a co-employment relationship: the PEO and the client share employer responsibilities, the worker is on both rosters, and the client typically needs to be registered to do business in the state. An EOR is a sole-employment relationship: the EOR is the only legal employer, and the client does not need any registration of its own. PEO is a US construct. EOR exists worldwide, and the global flavour is what crosses borders. The SHRM glossary uses essentially the same definition.
For deeper detail on the comparison, see our employer of record entry and the related global payroll overview.
How Does country Coverage Work?
Every EOR website shows a world map with green dots over 150 countries. The map lies. Coverage is not binary. It comes in tiers based on how the provider can legally employ in that country and how mature the local operation is. We have had clients sign with a vendor whose Brazil pin turned out to be “we know an accountant in São Paulo who can help”. Knowing the tiers up front prevents that day-30 surprise.
Tier 1: The EOR Has Its Own Legal Entity
The EOR has its own registered subsidiary in the country, with local payroll staff, an in-country bank account, and direct relationships with the tax authority. Hiring is fast (1 to 2 weeks), pricing is transparent, and the EOR carries direct liability. Most major EORs have own-entity coverage in 30 to 60 countries: the US, Canada, UK, most of Western Europe, India, the Philippines, Mexico, Brazil, Singapore, and Australia.
Tier 2: The EOR Uses A Local Payroll Partner
The EOR uses a local payroll partner that holds the employer entity. Coverage works, but onboarding is slower (2 to 4 weeks), pricing has a markup layer, and there is a chain of liability between you, the EOR, and the partner. Ask for the partner’s name, the markup percentage, and the SLA between the EOR and the partner before signing. Most EORs run partner coverage in another 40 to 80 countries.
Tier 3: Contractor Routing Or "Available On Request"
Some country pins on the map are actually “we will sign you up as a contractor” or “we route you through a local accounting firm”. These are workable for low-risk markets but a red flag for sensitive ones. If the country pin is grey or marked “available on request”, treat it as Tier 3 until proven otherwise.
Red Flag Markets Where EOR Gets Hard
A few countries are notoriously hard to operate as an EOR. Knowing them up front saves a project:
- Germany. See our Germany hiring guide for full detail. The Arbeitnehmerüberlassungsgesetz (AÜG) caps temporary employee leasing at 18 months and requires the EOR to hold a special licence. Past 18 months you must move the employee onto your own entity or risk reclassification.
- China. Foreign companies cannot directly employ Chinese nationals without a registered presence; the FESCO (Foreign Enterprise Service Company) model is the de-facto channel, and only a handful of EORs have the right local relationships.
- Switzerland. Operating as an EOR requires a Personalverleih licence, which is not granted casually. Many EORs do not actually hold one.
- UAE free zones vs mainland. Some EOR providers can only employ in free zones, which restricts what work the employee can perform and where they can live.
- India. State-level professional taxes, gratuity rules, and the recent labour code consolidation make India a strong test of an EOR’s depth.
If any of these markets are on your roadmap, ask for the EOR’s licence number, the model used (own entity, partner, contractor), and any case studies in that exact country before committing.
How Much Does A Global EOR Really Cost?
Most EOR websites quote “starting from $599 per employee per month”. That number is real, and incomplete. The full stack is below; the gap between the headline price and the real bill is usually 25 to 50 percent.
What The Headline Per-Employee Fee Covers
The headline price covers the EOR’s labour: payroll processing, contract administration, compliance, and HR support. It usually sits in three bands:
- Tier 1 / mature markets: $299 to $499 per employee per month
- Tier 2 / partner-entity markets: $499 to $750 per employee per month
- Tier 3 / restricted markets: $750 to $1,200 per employee per month, sometimes with a setup fee
The Cost Line Items Vendors Leave Off The Proposal
Beyond the headline fee, a faithful budget needs eight more line items. Use the table below as your RFP cross-check.
| Hidden cost | Typical range |
|---|---|
| Currency (FX) markup on local-currency payroll invoiced in USD/EUR | 1% to 4% over mid-market |
| Salary deposit held against invoicing gaps or termination | 1 to 2 months of fully-loaded salary |
| Severance reserves in mandatory-severance countries (Mexico, Brazil, most of LatAm) | Monthly accrual, varies by country |
| Off-cycle and bonus payroll runs (year-end bonus, commissions) | $50 to $200 per run |
| Statutory bonuses (Mexico aguinaldo, India bonus act, Philippines 13th-month) | ~1 month of salary, country-dependent |
| Benefits supplements (private health, life, meal vouchers) | Pass-through + small admin fee |
| Equity administration for RSUs/options pass-through | $25 to $100 per employee per month plus tax-advice fees |
| Termination cost (statutory severance + notice + penalty pay) | Up to 6 months of salary in France/Italy |
Real Example: Budgeting 25 Hires Across Six Countries
Take a Series B SaaS company hiring 25 cross-border engineers and AEs across the UK, Germany, Spain, Brazil, India, and the Philippines. Average gross salary $85,000. Mature-tier EOR pricing of $399 per employee per month.
- EOR fees: 25 × $399 × 12 = $119,700
- FX markup at 2% on payroll of $2.125M = $42,500
- Statutory employer contributions (averaged at 22% across the mix) = $467,500
- Salary deposit (one month, opportunity cost at 5%) = $8,854 per year
- Statutory bonuses (13th month in Brazil and Philippines, ~$15,000)
- Off-cycle and admin fees (~$3,000)
Annualised, the EOR-line cost (fees + FX) lands at roughly $162,200, which is 7.6% on top of gross payroll. The employer contributions are not an EOR cost, but they are real money and have to be budgeted. Compare that against the legal, tax, and registration fees of opening six entities (typical range $150,000 to $400,000 in year one, plus 4 to 9 months of project time) and the EOR usually wins for the first three years of any small-team multi-country footprint.
Global EOR vs Your Own Entity, Side By Side Comparison
The choice between renting an EOR seat and opening your own foreign subsidiary comes down to four numbers. Here they are on one page.
| Dimension | Global EOR | Your own entity |
|---|---|---|
| Time to first hire | 1 to 3 weeks | 4 to 9 months |
| Year-1 setup cost | None (per-employee fee only) | $25,000 to $400,000 depending on country |
| Annual cost per employee | $5,000 to $7,000 + FX | $25,000 to $50,000 fixed entity overhead spread across all employees |
| Break-even headcount | n/a (per-employee pricing) | 5 to 8 (low-cost), 10 to 15 (mid), 20+ (high-cost) |
| Best for | First hire, market test, < 10 headcount, M&A bridges | Strategic markets, > 15 headcount, banking/regulatory needs |
When Should You Use A Global EOR (And When Not To)
The clean rule: a global EOR earns its keep when speed beats per-employee unit economics, when the country is still a test market, or when headcount in that country is not yet big enough to justify the overhead of running your own entity. The detail follows. Reach for a global EOR when:
- You are making your first hire in a country and the headcount is unlikely to exceed 5 to 10 in the next 18 months.
- You need to onboard a candidate in 1 to 3 weeks (entity setup is 4 to 9 months).
- The country is a market test, not a strategic commitment.
- You want to avoid the legal, tax, and management overhead of running a foreign subsidiary.
- You want a single contract, single invoice, and single point of accountability across multiple countries.
- You are absorbing employees from an acquisition before integrating them into your own entities.
Skip the EOR (and pay for an entity instead) when:
- The country is a banned or restricted EOR jurisdiction for your sector (defence, certain financial-services roles).
- Your headcount is already above 15 to 25 in a single country and the per-employee fee starts to exceed entity cost on a fully-loaded basis.
- You need an entity for non-employment reasons (banking, regulatory licensing, government contracting).
- The role is short-term contract work better suited to an AOR or contractor model.
- The local labour code restricts third-party employment for the role type (Germany past 18 months, China without FESCO routing).
Top Global EOR Providers in 2026: Vendor Scorecard
Naming names matters. We have used or competed against every vendor in this table across more than 60 client projects since 2019. The shorthand below covers the criteria buyers actually care about (own-entity country count, transparency, technical depth) plus the bits the marketing pages tend to skip. Pricing here is directional; ask for an actual quote with your country mix before signing.
| Provider | Own-entity countries | Pricing transparency | Strength | Watch-out |
|---|---|---|---|---|
| Remote | ~70 | Public per-country pricing | Strong product, fast onboarding, clear contracts | Light on equity-pass-through depth |
| Deel | ~110 (mix of own + partner) | Public starting price; partner markup not disclosed | Largest country list, integrated contractor + EOR | Partner reliance in many countries; service depth varies |
| Velocity Global | ~50 own + 100 partner | Quote-only | Enterprise depth, dedicated account management | Higher price point, less self-serve |
| Globalization Partners (G-P) | ~80 | Quote-only | Strong legal/compliance brand, large enterprise customers | Slower onboarding for smaller teams |
| Papaya Global | ~30 own + partner network | Public starting price | Strong payroll engine, real workforce data | EOR is one product among many |
| Safeguard Global | ~45 own + partner network | Quote-only | Deep payroll heritage, good for complex pay items | Less fast-moving product UX |
| Multiplier | ~60 | Public per-country pricing | Competitive pricing, fast onboarding in APAC | Newer brand, smaller install base |
| RemotePeople | Owned entities in 60+ countries | Transparent flat pricing | Premium benefits packages, integrated payroll, equity, and immigration | Boutique scale, RFP-led engagement |
None of these vendors is universally best. The right pick depends on your country mix, headcount per country, integration needs, and how much hand-holding your HR team needs. We recommend running a 3-vendor RFP for any multi-country project of more than 10 hires.
5-Step Provider Selection Playbook
Once you know you need a global EOR, the selection itself is a five-step sprint. Run it in two to three weeks; don’t drag it out.
- Map the country list. List every country you will hire in over the next 18 months, with target headcount per country.
- Shortlist three vendors. Pick one global generalist (Remote, Deel, G-P), one country specialist for your hardest market, and one boutique that integrates payroll/equity/immigration.
- Send the same RFP. Use the checklist below: same questions, same format, side-by-side answers. Marketing decks are a red flag at this stage.
- Reference-check by country. Two clients per shortlisted vendor in countries comparable to yours. Ask about onboarding speed, off-cycle payroll, and how a recent termination went.
- Pilot with one hire. Sign a 6-to-12 month commitment and put the first hire through. Decide on the rest of the roster after the first three payslips clear cleanly.
How Do You Evaluate A Global EOR? An RFP Checklist
If you have a multi-country project worth at least $200,000 in annual EOR spend, send the same RFP to three vendors. Below are the questions that separate marketing from substance.
- For each country in scope, are you the legal employer through your own entity, or via a partner? If partner, name them.
- What is the all-in monthly fee per employee, including FX markup, and how is FX calculated?
- What deposits and reserves do you require, and on what terms are they returned?
- What is your termination assistance? Do you advise on severance, manage the conversation, and warrant the calculation?
- Do you support equity pass-through (RSUs, ISOs, NSOs) in the countries in scope, and what tax treatment is supported?
- What immigration support do you offer, by country and visa class?
- What is your standard SLA for onboarding, payroll-cut-off changes, and ad-hoc requests?
- What HRIS integrations do you support natively (BambooHR, HiBob, Rippling, Workday)?
- Provide three references in countries comparable to ours.
- What happens to the employment contract if we move the employee to our own entity? Is there a transfer process or do we re-hire?
The answers tell you whether you are buying a service or buying a slide deck. If you want a head-start on the RFP, the EOR providers directory includes shortlists by region and use case.
When (And How) To Migrate From EOR To Your Own Entity
The EOR-to-entity migration is the most under-discussed part of the model. Most buyers think they will run on EOR forever. Most actually hit a trigger that forces a migration: headcount past 15 in a country, regulatory reasons, or the per-employee fee becoming uneconomic. The trigger thresholds we see in practice, by jurisdiction tier:
| Jurisdiction tier | Migration trigger (headcount) | Annual entity overhead |
|---|---|---|
| Low-cost (Singapore, UK, Ireland, Estonia) | 10 to 15 employees | $25,000 to $40,000 |
| Mid- to high-cost (Germany, France, Brazil) | 20 to 30 employees | $60,000 to $120,000 |
| Regulatory-driven (financial services, government contracting, healthcare) | 5 employees or fewer | Whatever it costs; the entity is non-negotiable |
The migration itself is a 4 to 7 month project. Sequence-wise: incorporate the local entity, register for tax and social security, open a local bank account, contract a local payroll vendor, draft fresh local employment contracts, then transfer employees from the EOR to your entity on a coordinated effective date. Severance, accrued leave, tenure recognition, benefits continuity, all of it has to be planned so the employee experience is neutral. A good EOR helps you plan it. A bad one will tell you the migration is complicated and quietly slow-walk the paperwork until you give up. We have seen both.
Can A Global EOR Sponsor Work Visas?
A frequent question: can a global EOR sponsor a work visa for a foreign hire? The honest answer is “sometimes”. Visa sponsorship requires the sponsor to be a registered employer in the destination country, which the EOR is, but the EOR also has to hold the right sponsor licence and accept the additional liability. The table below is the practical state of play.
| Country | Visa class | EOR sponsorship feasibility |
|---|---|---|
| United Kingdom | Skilled Worker | Possible, but only a minority of EORs hold the sponsor licence; confirm before promising |
| Germany | Blue Card | Feasible via EORs that hold an AÜG licence |
| Netherlands | Highly Skilled Migrant | Only EORs recognised by the IND can issue; check IND register |
| UAE | Work permit | Routinely handled by most EORs |
| United States | H-1B | Not a fit for the EOR model; engage specialised immigration counsel |
Always confirm sponsor status with the EOR by visa class and country. Marketing pages will say “we handle immigration”; the operational answer is more nuanced.
How Do Equity, RSUs, And IP Assignment Work Through An EOR?
Two pieces of the cross-border puzzle that founders almost always forget until offer-letter stage: equity pass-through and IP assignment. Both are country-specific.
Equity pass-through is the first. If you grant stock options or RSUs from your US (or other) parent, the EOR has to deliver those grants to a worker who is technically employed by the EOR’s local entity. The mechanics involve a tripartite agreement and country-specific tax treatment.
The country-specific picture for the most common destinations:
| Country | Equity mechanism / treatment | What to ask the EOR |
|---|---|---|
| United Kingdom | EMI is off the table because the EOR is not the granting entity; non-tax-advantaged options or RSUs only | Confirm tripartite agreement template and tax-withholding mechanics |
| France | Employees may need a separate agreement so the grant is recognised for social-security purposes | Confirm URSSAF treatment of the vesting event |
| Germany | RSU vesting taxed as ordinary income at vest; tax-advantaged plans require separate structuring | Confirm the EOR will run withholding correctly through the next payslip |
| China | RSU vesting events must be reported to SAFE; FX restrictions apply | Ask for SAFE filing process and timing |
| India | Perquisite tax at vest plus separate capital gains at sale; foreign-share reporting on FA schedule | Confirm form 16 includes the perquisite line |
| Other top-20 markets | Provider should have a playbook | Ask for the country-specific tax memo before the offer goes out |
IP assignment is the second. The local employment contract must include clean IP assignment so work product flows from the worker to the EOR and then to you. Most providers use a standard back-to-back assignment. In countries with employee-favourable IP rules , Germany, France, Sweden are the usual culprits; the exact wording matters and should be reviewed by your own IP counsel before the first hire.
We have seen one open-source-heavy start-up nearly lose ownership of a key library because the chain of assignment was sloppy in the EOR’s template. It is not a hypothetical.
Where Global EOR Projects Go Wrong
The model is mature, but the pitfalls are real. These are the ones that bite clients we work with most often.
- Permanent-establishment risk. If the EOR employee performs activities that constitute a permanent establishment for your home company in the host country (concluding contracts, fixed place of business), the local tax authority can assess corporate income tax against you. Avoid by limiting the role scope and by using the EOR’s compliance review.
- Misclassification spillover. Many companies use AOR/contractor models and EOR side by side. If your contractors look more like employees, the local labour authority may reclassify; the EOR will not shield you from liability on the contractor side. The ILO standards on non-standard employment are a good baseline reference.
- Termination cost shock. France, Italy, Spain, and most of Latin America have mandatory severance schedules. A 3-year-tenured employee in Italy can cost 3 to 6 months of salary at termination. Budget this from day one.
- Data-protection complications. GDPR, the UK Data Protection Act, India’s DPDP Act, and Brazil’s LGPD all create employer obligations. The EOR is a controller for some data and a processor for others; the data-processing agreement (DPA) needs to be in writing and aligned with your privacy programme.
- Equity-tax surprises. An employee receiving RSUs in a country that taxes vesting (most do) without proper withholding planning can face a personal tax bill that destroys retention.
- Restricted-country reclassification. Germany past 18 months, China without FESCO routing, Switzerland without a Personalverleih licence. Each carries reclassification risk that lands on you, not the EOR, in some scenarios.
Build vs Buy: When Does Opening Your Own Entity Make Sense?
The EOR-vs-entity question is fundamentally a unit-economics question. The simplest model:
- Annual EOR cost per employee = (monthly fee × 12) + (FX markup × annual gross salary)
- Annual entity cost = setup amortised over 3 years + annual filings + local accountant + local HR/payroll vendor + management overhead
For a representative European country, an entity costs roughly $25,000 to $50,000 per year all-in. An EOR costs roughly $5,000 to $7,000 per year per employee plus FX. Break-even sits around 5 to 8 employees per country in low-cost jurisdictions, 10 to 15 in mid-cost ones, and 20+ in expensive ones.
But unit economics is only one input. The other inputs that should sway the decision: how strategic the country is to the business, whether banking or regulatory reasons demand an entity anyway, how comfortable your team is managing foreign subsidiaries, and whether your HRIS and payroll stack can absorb a new entity without upheaval. We have seen scale-ups stay on EOR at 30 employees per country because the operational simplicity was worth more than the per-employee fee delta.
Three Buyer Scenarios We See Most Often
Frameworks are nice. Examples are better. These three archetypes cover most of the projects that hit our inbox.
The seed-stage start-up making its first international hire. A 12-person AI start-up in San Francisco hires its first machine-learning engineer in Lisbon. Founders cannot justify a Portuguese entity for one person. Set them up on a global EOR within 2 weeks, sign a 12-month commitment, revisit at the 3-hire mark.
The scale-up testing four European markets. A Series B SaaS company wants 2 SDRs in each of the UK, Germany, France, and Spain. Eight people, four countries, 6-month sales-test horizon. EOR is the only sensible answer; entity setup would take longer than the test itself. After 12 months, evaluate by country: keep on EOR where headcount stays under 6, plan entity migration for any country that scales past 10.
The Fortune 500 absorbing an acquisition. A US enterprise acquires a 40-person UK consultancy. Closing date is 60 days away. Setting up a UK entity in time is impossible. Use a global EOR as a 6-to-9-month transition vehicle: employees move to EOR at close, the new entity is incorporated in parallel, then employees migrate to the new entity once it is operational. The EOR earns its keep on the deal-timeline pressure alone.
The Four Question Decision Framework
If you remember nothing else from this guide, remember the four questions:
- How many employees in this country in 12 months? Under 5: EOR. 5 to 15: EOR with a migration plan. Over 15: entity, unless something else changes the answer.
- How fast do you need to onboard? Under 6 weeks: EOR. Six months or more available: entity becomes viable.
- Is the country restricted or risky for EOR? Germany past 18 months, Switzerland, China without FESCO routing: build entity faster.
- Are there non-employment reasons for an entity? Banking, licensing, government contracts: skip the EOR question entirely.
If you cleared every gate above and EOR is the answer, the next step is short. Shortlist 3 providers. Run an RFP using the checklist above. Sign with the one whose answers are most concrete. Start hiring. If entity is the answer instead, plan a 6-month project and consider an EOR bridge while the entity is being built; almost nobody waits the full 6 months with an empty seat.
Ready To Scope A Global EOR Project?
If the four-question framework points you to EOR and you want a head-start on the RFP, our team can put a country-by-country shortlist in front of you in 48 hours. We have run this exact selection across 60+ projects.
For deeper context, see the related entries on global payroll and employer of record, and the country-specific country-by-country hiring guides. When you are ready to scope a real project, the global employer of record service page walks through pricing, country coverage, and a typical onboarding timeline.
Frequently Asked Questions
A global employer of record (EOR) is a third-party company that legally employs your workers in countries where you have no entity, running local payroll, taxes, benefits, and compliance on your behalf so you can hire abroad in weeks instead of months.
A global EOR is the sole legal employer in a foreign country and lets you hire there without your own entity, while a PEO is a US-only co-employment arrangement that requires you to already be registered to do business locally. EOR works across 100+ countries; PEO is a US construct.
A global EOR costs $299 to $1,200 per employee per month depending on country tier, plus a 1% to 4% FX markup on payroll. Total EOR-line cost is typically 7% to 10% on top of gross payroll across a mature-market mix, before statutory employer contributions.
You can hire through a global EOR in 1 to 3 weeks in own-entity countries, 2 to 4 weeks in partner-entity countries, and longer in restricted markets. By comparison, setting up your own foreign entity takes 4 to 9 months.
Some global EORs can sponsor work visas, depending on country and visa class, provided the EOR holds the local sponsor licence. UK Skilled Worker, Germany Blue Card, and UAE work permits are commonly available; US H-1B is generally not a fit for the EOR model.
Yes, a global EOR can safely deliver equity grants in the top 20 countries with capable providers, but the legal mechanics differ by jurisdiction and require a tripartite agreement plus country-specific tax handling. Always confirm coverage before promising equity to an EOR-employed candidate.
Move from a global EOR to your own entity once headcount in a single country crosses roughly 10 to 15 employees in a low-cost jurisdiction, or 20 to 30 in a higher-cost one. Plan the migration as a 4 to 7 month project.
Yes. Germany restricts EOR-style temporary employee leasing past 18 months under AÜG, Switzerland requires a Personalverleih licence many EORs do not hold, and China requires a FESCO-style local arrangement. Always check country-by-country before committing to an EOR in a sensitive market.
You own the working relationship: you direct the work, set goals, manage performance, and decide compensation. The EOR is only the legal employer for payroll, tax, and compliance purposes; the employment contract spells this division out.
The employee is technically terminated by the old EOR and re-hired by the new one on the same effective date, with tenure for benefits and severance preserved through the contract. Done well, the switch is administratively annoying but operationally invisible to the employee.
Andrew (Drew) joined the Remote People team in 2020 and is currently Director, Regulatory Affairs. For the past 13 years, he has been a trusted advisor to C-Suite executives and government ministers on international compliance and regulatory issues. Drew holds a law degree from the University of Otago, a PhD from the University of Sydney, and is an enrolled Barrister and Solicitor of the High Court of New Zealand.
