Employer of Record
Using an EOR can be advantageous for companies that want to expand their presence in new foreign markets without, however, establishing their own branch or representative office in the target country.
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What is an Employer of Record (EOR)
The EOR is an “umbrella company” that, by virtue of a business agreement with a client company, legally hires the client company’s employees or candidates and assumes responsibility for managing all aspects of the employment contract, such as managing the payroll and paying statutory contributions resulting from registration with tax and social security authorities.
Why using an EOR in the international market
Using an EOR can be advantageous for companies that want to expand their presence in new foreign markets without, however, establishing their own branch or representative office in the target country.
Using an EOR in the context of an immigration process
The use of an EOR becomes essential where the client company wants to assign their own worker to a foreign country to perform work for extended periods but without having a corporate presence in that country.
In fact, from an immigration standpoint, the company is required to obtain the appropriate visas and work permits for its workers assigned abroad.
What are the risks of not complying with immigration fulfillments?
Failure to obtain a work visa or possession of an inappropriate visa exposes both the worker and the company to significant administrative and/or criminal consequences and penalties.
How to optimize and use an Employer of Record
advantages of using an EOR:
Flexibility
It provides flexibility to companies by allowing them to send their staff to foreign countries without having to establish a corporate presence in that country
Cost reduction
Flexibility leads to reducing the operational costs of having to start a new company in a foreign country.
Less risks
Minimizes risks as the legal responsibilities associated with the proper employment of personnel in the destination country remain with the EOR.
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