Executive Overview
Hiring international talent without establishing a local legal entity has become standard practice for high-growth tech companies, global enterprises, and mid-market employers. Employer of Record (EOR) providers act as the legal employer for your workers, handling local employment contracts, statutory payroll taxes, health insurance, and labor law compliance.
When to Use an EOR vs Local Legal Entity
Establishing a subsidiary requires minimum share capital, local corporate registration, bank account setup, ongoing statutory audits, and legal counsel fees. For team sizes under 15 workers in a single country, an EOR is significantly faster and more cost-effective.
Comparative Breakdown
- Speed to Hire: EOR setup takes 2–5 business days vs 3–6 months for a subsidiary.
- Upfront Capital: EOR requires $0 capital investment vs $15,000–$50,000 entity registration fees.
- Permanent Establishment Risk: EOR provides legal shielding for non-commercial roles.
Research Sources & Citations
Methodology v1.0 →This guide is corroborated against the following structured sources:
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