Employer of Record: How to Save Your Overseas Hiring Problems
Have you heard the expression “Employer of Record” anywhere? If not, it’s time you get familiar with it.
Why? Well, this is the solution you’ve probably been seeking (for ages). An Employer of Record, or EOR, saves your expanding business time and money. And we all know the challenges of employing remotely, with all the tax and legal compliance required… that’s when the EOR saves the day – avoiding the employee misclassification you may be getting into.
You’re about to find out what an Employer of Record is and why your business needs it. By the end of this article, you’ll know the most common services an EOR provides, the associated risks, how it works (particularly in Portugal), how much it costs, and why, in certain cases, it’s better than opening a physical company.
What You’ll Learn:
Employer of Record: Everything You Need to Know
What’s an EOR?
Are There Any Risks?
Is it Legal?
How Much Does an EOR Cost?
Are there EORs in Portugal?
What’s the Best Employer of Record?
Who Can Legally Work in Portugal?Employer of Record: The Main Services Explained
Employer of Record: Everything You Need to Know
First things first: see the Employer of Record as an employment intermediary.
What’s an EOR?
In short, an EOR takes up all the legal and fiscal responsibilities on your behalf in the country you want to hire in. Each country has specific requirements, and though you can use the “Foreign Employer” setup, that implicates higher risks. So, that’s when the EOR does its magic.
You can either work with a global or a local EOR.
Both have pros and cons (it all comes down to your business). If you want to hire in a specific country (like Portugal), go with a local EOR. If you want to hire in multiple countries at the same time, maybe it’s best to work with a global EOR. However, the latter brings many challenges.
To simplify: imagine you’re employing workers in multilingual countries, including Portugal. As this country has a lot of bureaucracy (and we mean a lot), it’s best that you work with an EOR that has locally owned operations – besides deep knowledge of the local laws.
Either way, they’ll both handle all the responsibilities of a regular employer, such as managing payroll, compliance, and HR functions for each employee. Depending on your Employer of Record, the services provided will differ. So, make sure you know your business needs first.
An EOR allows companies to expand internationally without the burden of establishing a legal entity in every country they expand into. But it’s normal if you’re second-guessing. So, let’s answer some common questions.
Are There Any Risks?
There are, depending on the EOR you choose.
We can’t stress enough the need to choose wisely. And to take your time. Rushing into a decision may cause your business great harm. Compare each intermediary profoundly. Assess the services, the costs, what they guarantee, and the potential risks.
The truth is: if you choose an EOR that doesn’t master the legal and fiscal scenes of the country you’ll hire in… expect problems. Huge ones. The same happens if the intermediary states to be legally established in a given country until you find out it isn’t.
The associated risks increase when working with global EORs.
Those may include compliance issues, tax implications, and challenges in maintaining consistent employment policies across different jurisdictions. Choose your partner wisely, and assess everything you can at this stage. Hiring without opening an office may be challenging, but it’s far from impossible.
Is it Legal?
Yes, almost anywhere. 100% legal and widely accepted.
EORs operate within the legal framework of each country, ensuring compliance with local labor laws and regulations. That’s why their role is crucial in every stage.
In fact, intermediaries like BRIDGE IN can assist you from the very start. Though not all EORs do it, we’re proud to help you find the best talent, arrange interviews, help you recruit, and also assist with any onboarding issue – while handling the usual monthly tasks we’re expected to.
How Much Does an EOR Cost?
The pricing structure for EOR services varies. It all depends on aspects like:
The country of operation
The number of employees hired
The number and scope of services needed
Generally, EOR pricing includes fees for payroll processing, tax compliance, and HR administration – but, as you know already if you need scouting and recruiting, that’ll be considered, too. Normally, global EORs tend to cost more, as they operate in multiple countries and hire many employees at the same time.
Make sure you clarify all your doubts before making any decision.
Are there EORs in Portugal?
There are, like BRIDGE IN.
We help companies expand their business to Portugal without failing. In short, we handle all the complex processes for you – so your mind’s focused on growing your business. And, in case you’re wondering, the answer is “yes”: Portugal’s been in sight for many companies.
Thanks to its growing economy and strategic location, Portugal is an attractive destination for business expansion. That’s where we can help you. We ease the hiring process while ensuring compliance with local labor laws.
What’s the Best Employer of Record?
Choosing the right EOR provider is critical to your international expansion – to a successful one, at least. But it’s hard to name the best of the best, as it’s almost impossible to assess that. We’d say the best Employer of Record is the one that suits your needs, provides quick and outstanding support to you and your employees, and is always ready to help and guide you through any obstacle.
The best EOR providers offer many services, a solid track record of compliance, and transparent pricing structures. Also, look for client reviews and other essential testimonials, as those always help reach a better decision.
Plus, consider its industry reputation and ability to customize its solutions to your needs. This is perhaps one of the most critical factors. Sure, there’s always a basic set of services, but each partnership should be 100% tailored to each business’s needs – yours is no exception.
Who Can Legally Work in Portugal?
While abroad, partnering with an EOR on another side of the world, it’s still important to know who you can legally hire. Your intermediary will help you with that, but there’s no such thing as too much information.
Your company can hire citizens of the European Union (EU) and citizens from countries with bilateral agreements. However, if you employ non-EU citizens, they must have an extended stay visa or some kind of residence or work permit. While not all EORs can assist you with visas and relocations for your employees, BRIDGE IN can.
Employer of Record: The Main Services Explained
As you know now, these depend a lot on the EOR you choose. However, you should find these primary services in most intermediaries:
Employ in the country you choose, fully compliant
Handle onboarding, contracts, taxes, and other paperwork on your behalf – even if you’re not in the chosen country
Filing and handling of taxes
Then, depending on the Employer of Record you end up working with, other services may be added. For instance, at BRIDGE IN, we offer extra critical services besides the main ones. This is the overall process we follow when working with a new expanding business:
You screen and select candidates with or without our help
We advise you on local salaries, perks, and best practices
EOR Agreement: we hire, pay employees, and handle HR on your behalf
Your organization manages employee’s day-to-day work
Your workers report to you while compliantly employed by us
All in all, make sure to evaluate your business needs and what you value most when working with a partner abroad. Your relationship must be as close as possible, even if you’re hundreds of miles away. Relying on your EOR is critical from the start.
Now that you understand what an Employer of Record is and how it can help your business, it’s time to choose the one that best suits your needs. Each provider is unique, but make sure you find all the services you need.
If you’re expanding your business – or thinking about it – understand first where you want to go because now you know you don’t need to open an office anywhere. An EOR can save you tons of time and money on that. So, ensure you know how many workers you want to employ and where.
Go through all costs, fees, and monthly expenses with your new partner. Sit down and relax as you watch your business skyrocket in no time.
