EOR (Employer of Record)

An Employer of Record (EOR) is a service provided by a third-party organisation that legally employs people on behalf of another company. This arrangement is for companies that want to hire employees in a country without an established legal entity.

Key points about what an EOR does:

1. Legal Employment Responsibilities: The EOR takes on the legal responsibilities associated with employment, including payroll, taxes, benefits administration, and compliance with local labor laws.
2. Simplifying International Hiring: EOR services are often used by companies looking to expand internationally without setting up a local office or subsidiary. It allows companies to quickly and legally start operations in a new country.
3. Risk Management: By managing employment-related compliance and regulations, an EOR helps minimize the legal and financial risks for the client company.
4. Employee Management: Beyond hiring, the EOR handles various aspects of human resource management, such as onboarding, maintaining employee records, and managing termination processes.
5. Cost-Effectiveness: Using an EOR can be more cost-effective than establishing a local entity, especially for smaller companies or those testing a new market.