Hiring someone in another country is straightforward until you get to the legal part. To employ someone compliantly, you typically need a registered entity in that country — which means incorporation, local banking, payroll registration, and full compliance with local employment law. For many organisations, that's a significant overhead for one or two hires.

An Employer of Record (EOR) solves this problem. This guide explains exactly how it works, when to use it, and what to look for when choosing a provider.

An Employer of Record is a third-party organisation that employs someone on your behalf in a country where you don't have a legal entity. The EOR is the legal employer — they handle the employment contract, payroll, tax, benefits, and compliance with local employment law. You retain full control over the employee's day-to-day work, direction, and responsibilities.

In practical terms: your new hire has a contract of employment with the EOR, works for you, and you pay the EOR a monthly fee that covers their salary, employer contributions, and a service charge. From the employee's perspective, their employment is fully compliant and their rights are fully protected — they're just employed by the EOR entity rather than your company directly.

The key distinction. The EOR is the legal employer. You are the operational employer. The EOR handles the paperwork and compliance; you handle the work itself. Most employees experience very little difference in practice.

Once you've identified the person you want to hire, the EOR process typically works like this:

You agree the employment terms — salary, role, start date, and any benefits — directly with the candidate. The EOR doesn't negotiate these; that's between you and your new hire.

The EOR issues the employment contract in the local language and in compliance with local employment law. This can often happen within a few days, meaning you can get people started significantly faster than if you were setting up a local entity from scratch.

Payroll is managed by the EOR. They calculate and pay salary, deduct the correct taxes and social contributions, and handle any local reporting requirements. You receive a consolidated monthly invoice covering salary costs, employer contributions, and the EOR's service fee.

Local compliance is the EOR's responsibility. Employment law varies enormously between countries — notice periods, statutory leave entitlements, dismissal procedures, and more. Your EOR stays current with local requirements so you don't have to.

Hiring one or two people in a new country. The cost and complexity of setting up a local entity rarely makes sense for a small number of hires. An EOR lets you hire compliantly without the overhead.

Moving fast. If you need someone to start in weeks rather than months, an EOR is almost always the faster route. Entity setup takes time; EOR onboarding typically doesn't.

Testing a new market. If you're not certain whether a market will work long-term, committing to a local entity is a significant step. An EOR lets you hire locally, test the market, and decide later whether a permanent entity makes sense.

Remote-first teams. If you're hiring the best person for a role regardless of geography, an EOR makes it practical to employ people in multiple countries without maintaining entities everywhere.

Post-acquisition situations. If you've acquired a business and inherited employees in countries where you have no entity, an EOR can bridge the gap while you sort out the longer-term structure.

EOR providers vary significantly in the countries they cover, their service quality, and how they handle compliance. Before committing, ask:

• Which countries do you have owned entities in, and which do you use third-party partners for?
• How quickly can you onboard an employee in the countries we're looking at?
• How do you handle employment disputes or terminations in each country
• What does the employee experience look like — how do they access payslips, request leave, or raise issues?
• What are your fees, and what's included vs. charged as extras?

Master Recruiter supports international hiring through our EOR partnerships. If you're looking to hire outside your current footprint, get in touch and we'll advise on the most practical route for your situation.