How to Hire International Employees Without an Entity

There’s a strong push for global expansion, with over half of businesses hiring abroad. However, their interest in foreign markets isn’t solely for growth and diversification. Often, the only way companies can fill crucial skills gaps and secure specialized talent is by looking overseas.

Many multinational companies hesitate when it comes to setting up a hiring entity in each country. Creating a foreign subsidiary involves significant costs and poses logistical challenges. It also opens your organization to compliance and regulatory risks.

That’s why global HR teams often turn to an Employer of Record (EOR) as a more efficient alternative. Services like Deel enable them to swiftly engage workers across hundreds of countries without a long-term commitment.

Keep reading to discover how to hire international employees quickly and compliantly with the support of an EOR.

How an EOR can support hiring foreign workers

EOR services simplify international recruitment by acting as the legal employer for your overseas teams. That means you can expand into new markets or hire a foreign employee without a local entity. 

As the EOR handles all HR matters, you don’t have to worry about researching labor and employment laws. The service provides a team of local experts to ensure your policies and practices comply with local regulations. For example, Deel has legal, payroll, and talent acquisition specialists in all our countries.

Even if there’s a compliance issue, you’re still not at risk of penalties or legal action. The EOR assumes all legal liability as the employer on paper. 

Today’s EOR services cover a range of countries, meaning you no longer need to engage multiple vendors. You can use one provider to manage your workforce, easily adding or removing locations as needed. Deel operates in over 150 jurisdictions and continues to expand its reach.

Combining an EOR with other hiring solutions

Growing companies often need to adapt their recruitment strategy based on their expansion goals and workforce needs. A comprehensive EOR like Deel allows for seamless integration with other hiring solutions.

Here are the hiring solutions you may wish to mix and match:

Contractor management

EORs allow businesses to engage both employees and independent contractors while ensuring compliance with local laws. Specifically, it checks there’s no risk of misclassification. For instance, Deel Contractor of Record verifies each worker’s status and drafts contracts accordingly.

If you only have temporary or project-based work in one country, you may not require an EOR for full-time workers there. You can still use the contractor management service while using the provider’s entities elsewhere.

Visa and immigration services

Companies can leverage an EOR to secure work visas and residency permits for new hires. Rather than directly sponsoring the worker, you can have the provider act as the sponsor and manage the application process. 

EOR-sponsored visas can save you a significant amount of time. Suppose you want to relocate a new hire to the Netherlands — you won’t have to spend two to three weeks establishing an entity, and Deel can arrange the visa within three months. You can ensure the candidate has a smooth transition and starts their new job without delays.

Want to relocate workers to countries where you already have an entity? Solutions like Deel can handle the visa and onboarding process for these moves, too. 

Entity setup

When you’re ready to set up a local entity, many EORs support the transition. Deel can guide you through the process of registering your corporation and offboarding your workers.

EORs aren’t an all-or-nothing situation. You can set up entities in certain countries while continuing to use your provider’s services elsewhere. The reverse is also true — you can switch from your own entity to an EOR if you plan to scale back.

This approach is especially beneficial for businesses experiencing different growth rates across regions. You can establish entities in advanced markets while continuing EOR services in emerging ones.

Advantages of using an EOR

An EOR isn’t just a temporary measure. Growing multi-national companies can use it as a strategic tool to manage international hiring more effectively. Here are the main benefits you can expect from the service:

• Quick market entry: You can hire and deploy workers within days when you don’t have to undergo the lengthy entity setup process
• Access to a global talent pool: EORs allow you to immediately hire candidates no matter their location. You can be sure your business always has the right skills at the right moment
• Employee satisfaction: 81% of global workers want location flexibility. You can meet this demand by using the EOR to hire staff in their preferred locations
• Lower costs: The costs of setting up and managing a local entity are prohibitive. For example, registering a corporation in Spain can reach up to $120,000 USD. The EOR lets you hire workers in a country for a lower, fixed monthly fee
• Guaranteed compliance: An EOR navigates the complex legal and tax regulations of each country, so you always remain compliant with local laws. As a result, you’re at less risk of penalties, litigation, or reputational harm that can stall progress
• Effective resource management: The EOR handles HR, payroll, and compliance tasks, freeing up resources for strategic initiatives. Your team can focus on continued growth and expansion rather than getting sidetracked by administration
• Scalability: As EORs streamline the international hiring process, you can scale your operations. You won’t overtax your team as your company hits a new growth phase or expands into a foreign market

Choosing an EOR service

Consolidating your hiring solutions is a significant commitment that impacts most of your operations. That’s why it’s essential to choose an EOR that has the capabilities to help you meet your expansion goals. 

Here are the features you should consider when deciding on a single EOR:

Global reach

The ideal EOR has a strong global presence, so you can simplify and standardize your recruitment process without restricting where you can hire. Look for providers with owned entities across all the key foreign markets. 

Consider the depth as well as the extent of the EOR’s reach. They should have experts on the ground in every country so they can effectively navigate its laws and regulations. For instance, France is known for having a complex labor code with punitive measures — you need a local specialist to prevent employee disputes from escalating.

Fixed costs

Choose an EOR with transparent and predictable pricing models. The fixed costs can help you plan more effectively and control expenses as you expand abroad. 

Some EOR providers charge a percentage of each worker’s salary. While this makes sense in the early stages of expansion, the costs can add up as you hire employees and raise their pay. It’s best to find an EOR with a fixed monthly rate like Deel.

Advanced technology

EORs provide you with their HR, payroll, and workforce management software. Check the platform offers all the necessary tools and lets you tailor them to your workflow. For instance, Deel’s customization options let you choose data sets and fields for reports.

The software should also integrate seamlessly with your existing tech stack. Your team can share data across the platforms more effectively and avoid silos between departments and locations.

Consolidating your hiring solutions gives you the chance to centralize all your HR and payroll operations. Choose a solution that’s accessible from most countries. That way, your entire team can log in from wherever they work and have the same experience.

Security and confidentiality

The EOR’s software must follow international data guidelines so your business can continue to operate across borders. The main one to consider is the EU’s General Data Protection Regulation (GDPR).

Robust security ensures that you can protect sensitive employee data regardless of your staff’s location or role. However, ensure the features don’t limit your team’s access to the system and hinder your operations.

Here’s a quick checklist of the security features to look for:

• Multi-factor authentication
• Granular user permissions
• Single-sign on
• AES-256 encryption for stored data
• SOC certification

Range of service offerings

Evaluate the services offered by the EOR. Aside from basic HR and payroll, it should provide features like benefits administration, worker classification, and visa and immigration support. A comprehensive range of services means you can rely on the EOR for all your operations rather than turning back to other providers.

Customer support

Find an EOR with multiple contact options so you can get assistance whenever needed. You should also get a dedicated account manager or team. They can familiarise themselves with your business so you can get personalized support every time.

Beyond the support team, you should be able to access qualified professionals such as lawyers and accountants. Only specialists can offer sufficiently in-depth guidance on each country and its employment laws.

How to switch to an EOR from other hiring solutions

Although consolidating your hiring solutions may seem daunting, your chosen EOR should guide you through the transition. 

Deel assigns you a dedicated customer success manager to talk you through the options and organize the process. As a global HR solution, we can arrange support for your time zone in many popular languages. You can use our in-chat app to get instant answers to questions.

As well as your HR and payroll departments, we can support your global workforce. As you set up the EOR service, we can onboard hundreds of workers simultaneously. Both employees and contractors can also refer to our online knowledge base.

Entity or EOR, you can do it all with Deel

As an all-in-one platform, Deel enables you to hire, pay, and manage your entire global workforce in one platform. With legal entities across 150 countries and counting, our EOR model simplifies international expansion by providing you with:

• Local payroll management, benefits administration, taxes, and compliance
• Competitive benefits packages tailored to each country
• Support from local HR and legal experts
• IP protection
• 20+ integrations for HR, Finance, and more

Deel offers continued support through Entity Setup services and Global Payroll if you decide that entity setup is necessary. Clients can customize their use of Deel services by using the EOR model for some locations, Global Payroll for others, and engaging independent contractors as needed.

To discuss your options with an expert, book a 30-minute demo with our team today.