What is a Remote EOR (Employer of Record)?

As businesses expand globally, managing employees across different countries can be complex. Employer of Record (EOR) is a service that helps companies hire international workers without setting up local entities. This article explores a remote EOR and how it can simplify the global HR system to help your business operate smoothly across borders.

What is a Remote EOR (Employer of Record)?

A remote Employer of Record (EOR) is a service that enables companies to employ people in countries where they do not have a legal entity. It provides a compliant solution for hiring international staff without setting up a local office or independently navigating unfamiliar employment regulations.

Handling Employment Essentials

In this arrangement, the EOR becomes the legal employer of the worker in their home country. The EOR handles:

• Local employment contracts
• Payroll
• Benefits
• Tax contributions
• Statutory compliance

Streamlining International Expansion

Meanwhile, your company oversees the employee’s role, tasks, and performance as part of your team. The Employer of Record model has become an increasingly common choice for companies looking to expand internationally while avoiding the time and expense of setting up subsidiaries. 

As of 2023, the global EOR market was estimated to be worth around US$4.42 billion and is expected to grow.

Who Do Employees Work For?

On paper, the employee is employed by the EOR. Nevertheless, they work on your behalf, report to your managers, and are integrated into your company’s daily operations. The EOR does not manage their workload or influence how they perform their role; it simply ensures that all legal and administrative obligations are met.

Consider the Employee Experience

Ensuring employees hired through an EOR feel fully part of the team is essential. While the EOR handles their employment contract and pay, your management shapes the employee’s day-to-day experience. A reliable EOR will support the administrative side efficiently, helping you maintain a consistent experience for all staff, regardless of where they are.

Related Reading

• Global Payroll Services
• Payroll Outsourcing Companies
• Employer of Record Meaning
• Paying International Contractors

Benefits of Hiring a Remote EOR

Hiring international staff or contractors often involves complex legal, administrative, and compliance requirements for companies expanding into new markets. One of the most practical solutions in this context is working with an Employer of Record (EOR). 

A remote EOR enables companies to hire and manage international talent without establishing a local entity, making global expansion more accessible and less time-consuming.

An EOR Takes Full Responsibility for Employment Compliance

Unlike a Professional Employer Organisation (PEO), which typically shares employment responsibilities in a co-employment model, an EOR assumes full responsibility for the employment relationship. This includes:

• Legally hiring employees in the country of work
• Drafting and managing compliant employment contracts
• Overseeing induction and exit processes
• Running payroll and handling salary payments
• Providing statutory employee benefits where required
• Ensuring compliance with all local labour regulations
• Managing terminations and end-of-contract procedures in line with local laws

This comprehensive scope means businesses can delegate international employment's legal and administrative complexities while remaining focused on their operations.

No Need for a Local Entity

One significant advantage of using a remote EOR is that companies do not need to establish a local legal entity in the country where they wish to employ staff. Setting up a branch or subsidiary is often expensive and time-intensive, and involves ongoing administrative responsibility, including:

• Tax registration
• Compliance filings
• Maintaining a local presence

An EOR already operates through established legal entities in various jurisdictions. This enables businesses to hire quickly and compliantly without needing to navigate the legal frameworks of multiple countries.

Efficient Contractor Payments

An EOR can also support businesses working with independent contractors. While hiring contractors typically involves fewer obligations than hiring full-time employees, companies must still ensure they handle contractor engagements correctly, especially across borders. An EOR may offer contractor management services, such as:

• Verifying contractor status
• Collecting and reviewing invoices
• Processing contractor payments in local or foreign currencies
• Ensuring adherence to relevant tax and legal guidelines

Businesses can simplify cross-border invoicing by using a centralised platform to handle contractor payments and reduce the risk of misclassification.

Faster Time to Hire

Setting up a legal entity can take several months, especially when dealing with government agencies, tax registrations, and banking requirements. In contrast, a remote EOR already has these structures and can usually hire employees on your behalf within days. This can be especially valuable for organisations needing to secure talent quickly or respond to short-term growth opportunities.

Unified HR for MENA Businesses, Local and Global

Transform your HR operations with Cercli, which is aligned with the UAE’s vision for business excellence. It is the only platform built specifically for MENA businesses that unifies workforce management needs in one powerful system. Manage your entire team, whether local or global (Cercli supports payments in 150+ countries), with our comprehensive solution that handles multi-currency payroll, leave management, onboarding, and compliance documentation tailored to the unique requirements of the MENA region.

Employer of Record (EOR) vs Professional Employer Organisation (PEO)

Though some use the terms interchangeably, PEOs and EORs have a few crucial distinctions. The main features of an EOR are as follows:

• Legal employer: An EOR acts as the legal employer for the workers they hire on behalf of their client.
• Payroll management: An EOR handles payroll management, including calculating and processing payments, withholding taxes, and making other deductions.
• Compliance: An EOR ensures compliance with all local labor laws and regulations, including tax laws, employment contracts, and benefits.

The key difference between an EOR and PEO is that PEOs mostly handle HR functions for businesses that already own entities. At the same time, EORs employ workers for their clients’ companies without requiring them to open an entity.

What Works Better for International Employees: A PEO or an EOR?

As it turns out, if you don’t own an entity in the country where you want to employ someone, you need an EOR, not a PEO. Suppose you’re working with a global employment partner who requires you to open an entity before you hire workers. In that case, that partner does not provide EOR services, only PEO services.

Global PEOs vs. EOR: Choosing the Right Path for International Hiring

These companies are sometimes called "global PEOs" or providers of "global PEO services." Global PEOs are great if you’re already planning on opening an entity, but if not, working with an EOR is faster and likely more affordable. This is especially true if you’re only hiring a few employees nationwide.

With an EOR, you can continue to work with your employees like you do with your other employees. In this way, an EOR allows you to employ full-time workers in countries where you do not own a legal entity.

Understanding PEO Limitations in International Hiring

A PEO may be able to help you hire employees in other countries, but only if you have an entity. Generally, PEOs provide most of the same HR services as EORs, like payroll and benefits administration, but with the additional requirement of co-employment with your local entity. In addition, PEO-only companies may not have the same legal expertise as EOR providers.

It’s important to remember that an EOR can also provide all the HR services your business needs, such as payroll and benefits management. Still, your EOR always acts as the local employer of your workers on paper.

When you expand your team into new countries, having an all-in-one EOR partner to handle these key processes and your compliance needs can make life much easier.

Related Reading

• Global Payroll Compliance
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• How to Pay International Contractors
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Considerations When Choosing a Remote EOR

Is the EoR Committed to Compliance?

Hiring overseas can be a compliance minefield. Tax and employment laws vary significantly between regions. For example, US employment law drastically differs from that in the UK. As a result, an in-depth knowledge of local rules and regulations is key to a successful expansion. This is true whether you’re setting up an entity or hiring remote staff in-country.

When you engage an Employer of Record to manage your in-country hiring, onboarding, payroll, and HR, you leave the compliance side of things in the EoR’s hands. Ideally, this will relieve you of the administrative headache of managing compliance with local employment laws.

The Critical Importance of Full Compliance in EOR Selection

You must ensure that your EOR provider is 100% committed to compliance. Some providers may cut corners to expedite timeframes—for example, allowing a worker to commence work before their paperwork has been processed or not completing due diligence when assessing local compliance risks.

Discuss compliance strategies with any prospective EoR. You need to be sure they centre compliance at the heart of their operations, even if this means slightly longer wait times to ensure all boxes are ticked.

What Are Their Data Protection Standards?

As any employer knows, managing employee data securely is vital. When working with a global hiring service like an EoR, you must know they have a secure and up-to-date data management system. Proper data management ties in with the need for total compliance, as many regions have strict data protection laws, such as the EU’s GDPR. Carefully study any potential EoR’s security and privacy policies. Check for the following:

• What is their data recovery plan in the event of a system failure?
• Are they ISO27001-certified?
• What is the location of their servers?

Payroll data is particularly delicate and can cause serious trouble if mishandled. Find out if the Employer of Record has a platform on which you can review final payroll calculations. 

Where Does the Provider Operate and Who Employs Your Workers?

Does the EoR have a legal entity in the country you wish to hire? If not, they will likely be using a third-party partner. This is not necessarily an issue; most EoRs will work with trusted partners in some locations.

Understanding Your EOR and Third-Party Roles

You need to know everything about all parties involved in your EoR agreement. Ensuring due diligence is done to verify the reliability of all parties involved is key to ensuring smooth service implementation and total compliance in-country. Before selecting an Employer of Record that uses a third-party, you need to know:

• Who will handle performance issues?
• Who handles data transfer?
• Who handles local law updates?
• What due diligence has been carried out?

Does the Employer of Record Offer the Right Services for You?

When considering an Employer of Record, examine its overall service offering. Does it offer additional services that may be useful to your business now or in the future?

Beyond Basic Employment Administration

Are you moving staff to a new country? Do they offer visa and immigration support? Do they offer salary benchmarking to help you provide competitive remuneration packages in line with local expectations? If you decide to establish permanent operations overseas, can they offer you global Business expansion support in the future?

To get the most out of your provider, consider working with an Employer of Record that can offer a range of supplementary or follow-on services. This will allow you to combine costs, save time, reduce admin, and build a strong relationship with a trusted partner.

Does the Employer of Record Have a Strong Reputation?

As with any business, you want to know that the service provider you’re engaging is reputable and trustworthy. Luckily, we live in an age where customers can share their experiences and leave reviews of services. Research what other clients are saying about the EoR you’re considering. 

• Have they had positive experiences? 
• Have companies with similar set-ups to yours had success with this EoR? 
• Does this EoR specialise in supporting your industry?

You can also easily check ratings, certifications, and legal track records to assess credibility.

Book a Demo to Speak with Our Team about Our Global HR System

Transform your HR operations with Cercli, which is aligned with the UAE’s vision for business excellence. It is the only platform built specifically for MENA businesses that unifies workforce management needs in one powerful system. Manage your entire team, whether local or global (Cercli supports payments in 150+ countries), with our comprehensive solution that handles:

• Multi-currency payroll
• Leave management
• Onboarding
• Compliance documentation tailored to the unique requirements of the MENA region

Eliminate the complexity of using multiple fragmented tools and enjoy the efficiency of a single source of truth that keeps your business fully compliant with local regulations while simplifying every aspect of workforce management. 

Scalable HR Solutions Tailored for MENA's Growing Businesses, Inspired by Dubai’s Innovation and Growth

Whether you're managing a growing team of 25 or coordinating 500+ employees across multiple countries, Cercli provides the localised expertise and streamlined processes that MENA businesses need to scale confidently and manage remote teams effectively. Experience the only HR platform designed for how you do business in the Middle East, reflecting the UAE’s commitment to excellence and innovation.

Book a demo to speak with our team about our global HR system today!

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