AfterWorc Blog · Hiring abroad (EOR)

Employer of record or your own entity: how to hire your first person abroad

AfterWorc team · 28 Sept 2026 · 2 min read

  • An employer of record lets you hire in weeks without opening a company.
  • A local entity starts to make sense when you plan a larger team in one country.
  • Either way, the contract must follow local employment law.

Most growing companies meet this question the same way: the best candidate for the job lives in a country where you have no company. You have two legal ways to employ them.

Option 1: an employer of record (EOR)

An employer of record is a company that is already set up in that country. It becomes the legal employer of your new hire, while you direct the day-to-day work.

The EOR handles:

  • a local employment contract, in line with local law and in the person's language
  • monthly payroll, tax withholding and social security
  • holidays, sick leave and statutory benefits
  • the paperwork when someone joins or leaves

You receive one invoice a month. The person is on a proper local contract instead of an invoice-based arrangement that can be challenged later.

Option 2: open your own local entity

A subsidiary or branch gives you full control, but it takes time and ongoing work: registration, a local bank account, local accounting and payroll, and often a local director or registered address.

How to choose

  1. One to a few people in a country: an EOR is usually faster and cheaper overall.
  2. Testing a new market: an EOR lets you hire now and decide on an entity later.
  3. A large, permanent team in one country: your own entity can pay off. Many companies start with an EOR and move people over once the team grows.

The question is not only cost. It is how soon you need the person working, and how sure you are about the market.

What to prepare before you ask for a quote

  • the country and city
  • the role and the gross salary you have in mind
  • the start date
  • any equipment or benefits you want to provide