Employer of Record in France and Latvia, Updated for 2026
Your CFO just asked whether you can hire that senior engineer in Paris and the QA lead in Riga without setting up entities in either country. The board wants both roles filled this quarter. And you're sitting there wondering if an Employer of Record is even legal in France, let alone whether it makes sense for your 300-person company already juggling EOR arrangements in four other countries.
Here's the short answer: yes, you can hire through an EOR in both France and Latvia. Both countries permit foreign companies to employ workers through a compliant in-country Employer of Record without establishing a local legal entity. But the real question isn't whether it's possible. It's whether it's the right choice for your specific situation, and how France and Latvia fit into your broader European employment strategy.
Teamed defines mid-market companies for global employment strategy as organisations with approximately 200 to 2,000 employees, a range where multi-country hiring typically outpaces in-house legal and payroll capacity. If that sounds like you, this guide will help you make an informed decision about EOR in both markets.
Key Takeaways
Hiring through an Employer of Record is legally possible in both France and Latvia when using a compliant in-country partner. France has more complex labour law and higher social contributions, while Latvia is typically simpler and more cost-efficient. EOR works well as a bridge for mid-market companies to enter markets quickly before deciding on a local entity. Your choices in France and Latvia should align with a coherent Europe-wide employment model. And the best approach treats EOR as one tool among several, with clear graduation paths to entities when the time is right.
Can You Hire Through an Employer of Record in France and Latvia
An Employer of Record (EOR) is a third-party organisation that becomes the legal employer of a worker in a specific country, issuing the local employment contract and running payroll, taxes, and statutory benefits while the client company directs day-to-day work.
Both France and Latvia allow foreign companies to hire through a compliant EOR without opening a French SAS or Latvian SIA. The EOR handles contracts, payroll, and compliance. You handle the work itself.
This differs from contractor engagement in a critical way. EOR puts the worker into statutory employment with payroll tax withholding and social security coverage. Contractor engagement places tax and social obligations on the individual and increases classification scrutiny when control is high. If you're directing someone's daily work, setting their hours, and integrating them into your team, they're probably not a contractor, regardless of what the contract says.
Is employer of record legal in France? Yes. French law permits EOR arrangements where a compliant French entity employs the worker on your behalf. The same applies in Latvia. In both countries, local labour law fully applies to employees hired via EOR. This isn't a workaround for French or Latvian employment rules. It's a legal employment wrapper.
One more distinction worth understanding: EOR differs from a Professional Employer Organisation (PEO) because an EOR can employ workers without the client having a local entity, whereas a PEO model typically assumes you already have an in-country entity for co-employment.
Key EOR Considerations for Mid-Market Companies Hiring in France and Latvia
Teamed's European advisory approach is built on access to in-market legal and payroll expertise across 180+ countries, enabling country-by-country employment model selection without requiring the client to establish entities in each jurisdiction.
For a post-Series B company with 200 to 500 employees already hiring across multiple countries, the France and Latvia decision isn't just about feasibility. It's about fit.
Consider a London-based SaaS company adding a handful of hires in Paris and Riga under board pressure to scale without compromising compliance. The People Ops director needs to answer several questions before choosing EOR:
Timing and headcount. EOR works well when speed matters and initial headcount is modest or uncertain. If you're testing market viability or hiring one or two specialists, EOR avoids the overhead of entity establishment.
Role mix. A senior enterprise sales director in Paris carries different implications than a QA engineer in Riga. Sales roles with contract-signing authority can create permanent establishment concerns regardless of employment model. Support and engineering roles typically present lower risk.
Regulatory exposure. Companies in financial services, healthcare, or defence need assurance that an EOR in France or Latvia stands up to regulator and auditor scrutiny. Generic EOR sales decks won't satisfy your Head of Compliance.
Internal capacity. Even with an EOR running operations, your People and Finance teams need to understand local basics. You're outsourcing execution, not responsibility.
How an Employer of Record Works in France for Foreign Companies
France's statutory full-time working time reference is 35 hours per week, and compliant employment contracts and payroll practices must address overtime rules when working time exceeds this reference.
When you hire through an EOR in France, the France employer of record becomes the legal employer. They issue a French-compliant contract, register the employee with social security and tax authorities, and handle all statutory filings. The worker appears on French records and payslips as employed by the EOR, but performs duties for your company.
The employment contract must include job title, working hours, probation period, notice requirements, and any applicable collective bargaining agreement references. In France, employment terms can be influenced by applicable collective bargaining agreements, so compliant contracting requires checking whether a CBA applies to the role and reflecting mandatory provisions in contract terms and payroll treatment.
French employees receive generous statutory benefits: paid leave, strong termination protections, and compulsory health and social coverage. These are embedded in any compliant EOR arrangement. The EOR calculates and remits employer and employee social contributions, and guides on bonuses, equity, and variable pay.
Social security contributions are mandatory employer and employee payments that fund statutory benefits such as healthcare, pensions, and unemployment coverage, and they are typically a significant component of total employment cost in France.
Can I work remotely in France for a US company? Yes, through an EOR arrangement. The EOR provides the local employment infrastructure that makes this legally compliant.
Employer of Record in Latvia: How to Hire Without a Local Entity
In Latvia, compliant employment requires a locally compliant employment contract and payroll withholding under Latvian rules, and an EOR is commonly used to provide local employer registration and payslip administration without forming a subsidiary.
The mechanics are similar to France but simpler in practice. The EOR acts as legal employer, signs local contracts, runs payroll, and ensures alignment with Latvian labour and tax law. You direct the work. The EOR manages registrations, payslips, and filings.
Latvian employment includes standard working hours, paid leave, probation options, and core statutory benefits within the EOR setup. The payroll profile is relatively straightforward compared to many Western European systems, supporting cost-effective small team builds in the EU.
Common use cases include shared services, back office, engineering pods, QA, support, finance ops, and data roles. Many mid-market companies treat Latvia as a compact operations or support hub within a wider European plan.
Comparing France and Latvia EOR Costs and Compliance for Mid-Market Companies
EOR in France differs from EOR in Latvia in cost drivers because employer social security and labour compliance overhead are typically more material in France, making total employment cost more sensitive to statutory requirements than in Latvia.
| Factor | France | Latvia |
|---|---|---|
| Employer social contributions | Higher | Lower |
| Labour law complexity | More prescriptive | Simpler |
| Statutory benefits | Richer | Standard EU |
| Termination protections | Stronger | Standard |
| Administrative burden | Higher | Lower |
| EOR service fees | Similar structure | Similar structure |
The EOR service fee itself is typically similar across countries. What differs is the underlying local cost. A €60,000 gross salary in France carries materially higher total employment cost than the same salary in Latvia due to social contributions and compliance overhead.(approximately 45% employer contributions in France versus 23.59% in Latvia) and compliance overhead.
For Finance leaders, the comparison isn't just France versus Latvia. It's also EOR versus operating your own entity in each market. Entity establishment adds setup costs and ongoing administrative obligations, but can reduce per-employee costs at scale.
When Mid-Market Companies Should Choose EOR Versus Setting Up an Entity in France or Latvia
Choose an EOR in France when you need a French-compliant employee contract and payroll without forming a French entity, and you want the EOR to assume local employer registration and statutory benefit administration.
Choose an EOR in Latvia when you need an EU-based employee quickly without setting up a Latvian subsidiary and you want a locally compliant Latvian employment contract and payroll handled by an in-country employer.
Choose forming a local entity in France when you expect sustained headcount growth, need maximum control over French HR policies and representation obligations, or want to centralise employment risk and governance inside your own corporate structure.
Choose forming a local entity in Latvia when Latvia is becoming an operational hub with multiple hires, you need direct employer control for long-term retention and equity programmes, or you are consolidating Baltic operations under a dedicated corporate presence.
There's no universal headcount threshold. The decision depends on long-term headcount expectations, strategic importance of the market, cost profile, and your appetite for running local entities.
France's complexity and protections can make a local entity more attractive at scale despite slower setup. Latvia's lighter compliance means EOR can remain viable longer before an entity makes sense.
The smartest approach: map a graduation path from contractors to EOR to entity for both France and Latvia from the outset.
Multi-Country EOR Strategy for Companies With 50 to 2,000 Employees in Europe
A typical mid-market European expansion plan spans 3 to 5 years from first hire to a stable multi-country footprint, and Teamed structures EOR-to-entity graduation planning around that multi-year horizon rather than a single-country decision.
Most EOR pages answer single-country feasibility but don't provide a portfolio decision framework for hiring in France and Latvia together. Here's how to think about it:
Diagnose your current state. Map current and planned headcount across Paris, Riga, and other European hubs. Identify business goals and risk posture for each market.
Choose defaults by country and role. Decide where EOR, entities, or contractors best fit. Sales roles in France might warrant different treatment than engineering roles in Latvia.
Standardise across markets. Use one advisory partner to harmonise contracts, benefits philosophy, and compliance oversight. Fragmented vendor relationships create fragmented strategy.
Define time horizons. Treat EOR as a bridge in markets like France where you expect to scale. Consider longer-term EOR for certain roles in Latvia where headcount may stay modest.
Manage PE risk. Using an EOR does not automatically remove permanent establishment risk. PE is determined by the client's in-country business activities and authority to conclude contracts, not by who runs payroll. Obtain tax and legal advice, especially for revenue-generating activities.
How EOR in France and Latvia Fits Into a Wider European Hiring Strategy
Many mid-market companies view France as a strategic revenue and brand market, and Latvia as a cost-efficient EU base for operations or engineering. EOR in both can test assumptions, build local knowledge, and set up a roadmap.
France placements: Enterprise sales, partnerships, field marketing, senior customer success, country leadership.
Latvia placements: Engineering pods, QA, support, finance ops, shared services, data roles.
Keep employment brand and employee experience unified across EOR entities. Complement EOR with entities and compliant contractor models as needed. Plan multi-year transitions that may include entity setup, local leadership, and deeper regulatory engagement.
France is an EU Member State, so GDPR applies to HR data processing for France-based employees. Latvia is also an EU Member State, so GDPR applies there too. UK employers must implement appropriate transfer mechanisms when HR data is accessed from the UK.
How Teamed Advises on EOR and Entity Decisions in France and Latvia for Regulated Sectors
Teamed was founded in 2018 and positions its service specifically for the 50 to 2,000 employee segment that needs continuity from contractors to EOR to owned entities without switching advisory partners.
For companies in financial services, healthcare, or defence, the stakes are higher. Most EOR resources under-serve regulated industries by omitting audit readiness expectations, documented control frameworks, and evidence packs that Legal and Compliance teams typically require.
Teamed provides objective advice on contractors versus EOR versus owned entities in France, Latvia, and beyond. Access to legal and payroll specialists across 180+ countries covers French labour courts, Latvian payroll, sector rules, and permanent establishment risk.
Teamed's internal guidance for programme planning assumes EOR onboarding can be executed in as little as 24 hours once the worker's identity, role details, and compliant contract terms are confirmed, with timeline variation driven by country-specific checks and benefits setup.
The model is lifecycle guidance: from first EOR hire in Paris or Riga to scaling and migrating into a local entity when strategic. Decision support monitors regulatory change and surfaces risks, but final recommendations come from experienced human advisors.
Making the Right EOR Decision for France and Latvia Hiring With Strategic Support From Teamed
EOR is a legally viable, efficient entry into both France and Latvia. But the markets differ in cost and complexity, and treating EOR as a permanent solution rather than a strategic tool can create problems down the road.
For regulated sectors, deliberate, risk-aware decisions matter more than speed or price optimisation. Your Head of Compliance needs to sign off on the employment model, not just the vendor.
If you're ready to map an EOR-to-entity graduation plan for France and Latvia, align HR, Finance, and Legal on roles, risks, and timelines, and get clarity on your European employment strategy, talk to the experts at Teamed.
FAQs About Hiring Through EOR in France and Latvia
How many employees justify moving from EOR to an entity in France or Latvia?
There is no universal threshold. Decide based on long-term headcount expectations, strategic importance, cost profile, and your appetite for running local entities. Some companies maintain EOR arrangements indefinitely for small teams while establishing entities in markets with larger footprints.
How does EOR in France and Latvia affect our permanent establishment and tax risk?
EOR does not automatically remove PE risk. PE analysis is driven by commercial activity, especially for sales and contract-signing roles. Obtain tax and legal advice before finalising your model, particularly for revenue-generating activities that may create a taxable presence.
Can we move employees from an EOR to our own French or Latvian entity without breaking compliance?
Yes, with careful planning. Coordinated contract transitions, clear employee communications, and adherence to local protections and notice rules are essential. The EOR and your new entity need to work together on timing to avoid gaps or overlaps.
How should regulated industries approach EOR in France and Latvia differently?
Align with sector rules, data protection requirements, and audit standards. Seek specialist counsel before finalising your model. Generic EOR arrangements may not satisfy the documentation and control requirements your regulators expect.
Can we use different EOR providers in France and Latvia or should we consolidate under one partner?
Both are possible. Consolidation often improves consistency, oversight, and joined-up advice across countries. Fragmented vendor relationships can create gaps in strategy and increase administrative burden.
What is mid-market?
Typically 200 to 2,000 employees or roughly £10m to £1bn revenue. Between small businesses and large enterprises, with multi-country hiring needs that outpace in-house legal and payroll capacity.
How quickly can we hire through an EOR in France and Latvia compared with setting up a local entity?
EOR typically enables onboarding within weeks once contracts are agreed. Entity setup takes longer, often several months, and adds ongoing administrative obligations. For urgent hires, EOR is almost always faster.or
