You own a company that wants to go global. You know it's a competitive business market, and to succeed, you need to be able to hire the best talent, wherever they may be in the world.
After reviewing resumes and getting to know candidates over Zoom, you find the perfect match — based in Bulgaria. Then comes the catch: your payroll provider doesn’t support international employees.
On top of that, your HR manager doesn’t know the first thing about Bulgarian labor laws. For example, how do you handle tax registration? Employment contracts? Employee benefits and social contributions?
For many businesses, the solution to this challenge is simple — work with an Employer of Record (EOR).
But what exactly is an EOR?
In this guide, we’ll walk you through what an EOR is, how it works, and how one can help you build out your global team, legally.
What Is an Employer of Record (EOR)?
An Employer of Record (EOR) enables companies to employ workers in other countries by acting as the legal employer on their behalf. The EOR handles employment responsibilities, including onboarding, payroll, benefits, and compliance with local labor laws, while the hiring company manages the employee's day-to-day work.
By working with an EOR, companies can hire internationally without setting up a local entity, saving time and money while reducing employment-related compliance risks.
How Does an Employer of Record Work?
An Employer of Record works by becoming the legal employer of a worker on behalf of another company. The EOR handles employment contracts, payroll, benefits, and local compliance requirements, while the client company directs the employee's daily work. The employee works for the client company but is legally employed by the EOR.
Onboarding
Employers of Record provide full-service employee onboarding. They help employees get up and running by creating contracts, collecting all the necessary paperwork and tax forms, obtaining signatures, and adding new employees to the company’s payroll.
Some EORs offer additional services, such as issuing and shipping equipment, as part of the onboarding process.
Payroll Management
An Employer of Record manages taxes, benefits enrollment, and other core administrative tasks required to hire employees in another country. They also run international payroll — handling payments (including currency exchange), local tax calculations, and any required filings to ensure employees are paid accurately and on time.
By staying up to date with country-specific regulations, an EOR helps reduce errors and compliance risk while giving companies confidence that their employees are paid correctly, no matter where they’re based.
International Benefits
Employee benefits play a major role in attracting great talent — and in motivating people to stay. From pensions to maternity leave — working with an Employer of Record ensures your team receives all legally required, country-specific benefits wherever they’re based, without you having to navigate local rules yourself.
On top of that, EORs make it easy to go beyond the basics, so you can offer more competitive benefits, such as private health insurance, and position your company as an employer of choice.
Immigration
An Employer of Record can also provide support when visas or work permits are needed — for example, when hiring a candidate who doesn’t yet have authorization to work in a specific country, or when relocating or transferring an existing employee.
The EOR helps guide the company and employee through the application process, including gathering and submitting the required documentation and navigating each country’s unique requirements.
It helps avoid delays, rejections, and last-minute issues, so hiring or moving employees across borders feels far more predictable.
What Does an EOR Do and Not Do?
An EOR handles the legal and administrative responsibilities of employing workers, but the client company remains in charge of their day-to-day work. This includes making hiring decisions, assigning tasks, managing performance, and setting business goals.
While an EOR helps reduce employment-related compliance risks, it doesn't eliminate them entirely. For example, companies may still face permanent establishment risks when employees work abroad. An EOR also doesn't automatically resolve every corporate tax or regulatory requirement that may apply to the business.
Is Using an Employer of Record Legal?
Yes. Using an Employer of Record is legal in many countries, but the rules vary depending on where the employee is based. Some countries require EORs to hold specific licenses or registrations, while others place restrictions on how these employment arrangements can operate.
That's why it's important to work with an EOR that understands local employment laws and can confirm whether its services are permitted in each country.
When Should a Company Use an EOR?
There are several scenarios when a business can benefit from working with an Employer of Record, including if you:
- Already found the right person and just need a way to hire them legally in a country where your company doesn't have a legal presence.
- Plan to start hiring in other countries, but don’t want to set up multiple entities or learn new sets of employment laws from scratch.
- Are testing a new market, and don’t want to spend the time/money to open an entity.
- ARE planning to open an entity, but want to hire key staff in advance of the months-long process to get it up and running.
In short, if your goal is to build a global team without committing to long-term infrastructure right away, an EOR gives you a simple, compliant way to do it.
Hire International Employees Without Setting Up Local Entities
Found the right person in another country but don't have a local entity? RemoFirst helps companies employ people in 185+ countries, handling local contracts, payroll, benefits, and compliance. With pricing starting at USD 199 per employee/month, international hiring doesn't have to come with a hefty price tag.
What to Look For in an EOR Company
While all Employers of Record help companies compliantly employ workers in other countries, not all EORs are the same.
It’s important to invest time in researching your options to choose the EOR that is the best fit for your business needs. Some of the top factors to consider when evaluating EORs include:
Legal and Regulatory Compliance
An EOR should have deep, on-the-ground knowledge of local employment laws and compliance requirements in every country they support. Look for clear proof of credibility, such as proper licensing, certifications, or established legal partnerships.
It’s also worth understanding their track record — how well they’ve handled tax obligations, labor regulations, and statutory benefits over time — since this is where the risk for costly mistakes can creep in.
Geographic Coverage and Expertise
Not all EORs offer the same level of coverage or expertise in every region. Make sure the countries you plan to hire in are fully supported today — and that the provider has real experience in those markets.
Beyond basic coverage, strong local expertise matters, including familiarity with regional employment practices, cultural expectations, and the nuances of local labor laws.
Service Offerings and Customization Options
EORs vary widely in what they offer beyond the ability to serve as an employee’s legal employer. Take a close look at the scope of any additional services provided. For example:
- Equipment provisioning
- Background checks
- Private health insurance
- Visa and work permit assistance
You’ll also want to understand how flexible their services are — whether the EOR can tailor solutions to your business model and scale with you as your team grows or your hiring needs change.
Reputation and Client References
Before committing, spend some time getting a feel for the EOR’s reputation. Look into how long they’ve been operating, what existing customers say about working with them, and how responsive their support team is. Client references and testimonials can be especially helpful here.
It’s also smart to check independent reviews on platforms like G2 or Trustpilot and to ask peers in your network about their experiences. First-hand feedback often reveals strengths — or red flags — that aren’t obvious from sales materials alone.
Pricing Transparency
You should never be left guessing about costs. Some EORs tack on additional fees in addition to their advertised pricing, which can lead to unpleasant surprises later on.
Look for a provider that’s clear and upfront about what’s included, what’s extra, and how pricing may change as you scale, so you can plan with confidence.
This leads to an important question…
How Much Does an Employer of Record Cost?
EOR costs depend on several factors, including how many people you’re hiring and where they’re based. Most providers charge a monthly, per-employee fee that covers employment, payroll, compliance, and ongoing admin. That said, pricing can vary quite a bit — some EORs start around $600 or even $700 per employee per month.
RemoFirst keeps things simple and predictable, with full EOR services starting at $199 per employee per month, and $25 per contractor. Clear, transparent pricing makes it easier to plan ahead and scale your team globally without unexpected costs.
What's the Difference Between an EOR, PEO, and Staffing Agency?
EORs, PEOs, and staffing agencies all help businesses manage their workforce, but they serve different purposes. An EOR legally employs workers on a company's behalf, a PEO shares certain employer responsibilities with the client, and a staffing agency primarily focuses on recruiting and placing workers.
The biggest difference comes down to what the company needs. An EOR is particularly useful for employing workers in other countries without establishing local entities. A PEO helps businesses manage HR responsibilities for employees they already legally employ, while a staffing agency helps companies find and place workers.
Ready to Hire Globally? RemoFirst Can Help
Hiring employees in other countries doesn't have to mean setting up local entities, managing unfamiliar payroll systems, or figuring out employment laws on your own.
With RemoFirst, companies can employ talent in 185+ countries while we handle local contracts, payroll, benefits, and compliance. And with no annual contracts, dedicated account managers, and 24/7 support, you'll have the flexibility and guidance you need as your international team grows.
Whether you're hiring your first international employee or building a team across multiple countries, we're here to help.
Book a demo with RemoFirst today and start hiring tomorrow.
Frequently Asked Questions:
Do I need to set up a local entity if I use an Employer of Record?
No. One of the biggest advantages of using an EOR is that you don’t need to open a local legal entity in the country where you’re hiring. The EOR already has the required local infrastructure in place and becomes the legal employer on your behalf.
Does an EOR replace my internal HR team?
No, not at all. An EOR handles employment-related admin like payroll, contracts, benefits, and compliance, but you stay in control of day-to-day employee management. Your team still handles things like workload, performance reviews, and company culture — the EOR just takes the heavy administrative work off your plate for your international team members.
Can I hire just one employee through an EOR?
Yes. Many companies use an EOR to hire a single employee in a new country before deciding whether to expand further. EORs are commonly used by startups and growing teams that want to test new markets without long-term commitments or upfront setup costs.
How quickly can I hire through an Employer of Record?
Depending on the country and role, companies can often onboard employees in a matter of days, rather than weeks.
