What is an Employer of Record and how does it let you hire without an entity?

An EOR becomes the legal employer in the target country on your behalf. It holds the contract, runs payroll, remits statutory taxes, and carries the local compliance obligations while you direct the work. This lets you hire without incorporating a local entity first.

How long does it take to hire someone in a new country via EOR?

Where the EOR holds its own entity in the country, the process typically takes a matter of weeks. This is materially faster than setting up your own entity, which takes weeks to several months depending on the country's requirements.

Who is the legal employer when you use an EOR?

The EOR is the legal employer. The employment contract is between the EOR and your employee. You direct the day-to-day work under a separate commercial agreement with the EOR. The EOR carries the employer-side tax, payroll, and compliance obligations.

What does an EOR cost?

Teamed charges $599/£479 per employee per month, flat, with zero FX markup. Statutory costs pass through at cost. A refundable one-month salary deposit is required to start. No setup or offboarding fees; an early-exit fee may apply in the first three months.

When does it make sense to move from EOR to your own entity?

When the EOR fee per head exceeds the per-head cost of your own entity, or when you need contract terms and benefits outside the EOR's framework, or when a permanent strategic presence matters. Model the crossover before it arrives, not after.

What happens to employees when you move from EOR to your own entity?

In most countries the transfer is treated as a continuity event: seniority and entitlements carry across, and employees receive new contracts with your entity. Pay and day-to-day management should not change. A provider with an entity path on the same platform keeps the transition clean.

Employer of Record (EOR) vs Own Legal Entity

EOR for hiring without an entity, how the model works and when to use it

Through an Employer of Record (EOR). The EOR becomes the legal employer in the target country: it issues the employment contract under local law, runs payroll, withholds and remits the statutory taxes, and carries the employer-side obligations while you direct the day-to-day work. You can have someone on the ground in weeks. Your own legal entity is the alternative once headcount grows and the presence becomes permanent.

Talk to an EOR expert Model your crossover point

How hiring without an entity actually works

Weeks
A hire through an EOR can go live in weeks. Incorporating your own entity in the same country typically takes months.: 180+
Teamed covers 180+ countries via a mix of owned entities and vetted local partners, so you can hire without your own entity in most markets.: 4.8
Rated 4.8 on G2 for service. Real HR and legal experts on every plan, no AI bot wall.

Last reviewed 26 June 2026By Tom Price-Daniel, Co-founder, Teamed

How do you hire someone in another country without setting up a legal entity there?

At a glance

Employer of Record (EOR)

EOR delivered by Teamed, rated 4.8 on G2

Best for: a company that needs to hire in a new country quickly, without the time or cost of setting up a local subsidiary. The EOR is the legal employer, so you can bring someone on in weeks with no entity registration, no local payroll setup, and no in-country compliance obligations to manage directly.

Own Legal Entity

Best for: a company with a large, stable, permanent headcount in one country where the per-seat EOR fee has grown past the fixed cost of running a local entity, and where full control of employment contracts, benefits design, and data residency is a priority.

Where it matters	Who leads	Why
Speed to first hire	Employer of Record (EOR)	An EOR can onboard an employee in a new country in a matter of weeks because no entity registration is required. Incorporating your own entity in the same country takes weeks to several months, with additional time for payroll registration and local bank account setup before the first hire can start.
Setup and registration cost	Employer of Record (EOR)	An EOR charges a per-employee monthly fee and a refundable deposit. There are no entity setup or registration costs. Setting up your own entity involves legal and registration fees, often several thousand pounds or dollars, before the first employee is onboarded.
Per-head cost at scale	Own Legal Entity	At low headcount per country, EOR is usually the lower-cost route. As headcount grows, the monthly per-seat fee accumulates past the fixed cost of running your own entity. At that crossover point, your own entity typically costs less per head. The crossover threshold varies by country and salary level.
Local compliance carried by whom	Employer of Record (EOR)	Under EOR the provider carries the employer-side tax registrations, payroll filings, statutory benefits, and local labour-law obligations. You direct the work. With your own entity, all of those obligations sit with you, managed in-house or via local advisers you engage separately.
Control of employment terms	Own Legal Entity	Your own entity gives you full control over employment contracts, benefits design, equity structures, and IP assignment. Under EOR the employment contract is held by the provider and must fit within its standard framework. Benefits beyond statutory minimums are possible but within the scope the EOR offers.
Transition path	Draw	EOR and own-entity are not mutually exclusive. The natural progression is EOR first while headcount is small, then entity when the crossover makes sense. A provider with a built-in entity path, such as Teamed's Global Entity & Employment Operations (GEMO) in 90+ countries, can model the crossover and handle the transition on the same platform with no re-onboarding.

Employer of Record (EOR) on G2

Who Employer of Record (EOR) is for

This guide is for finance, people, and operations teams at fast-growing companies that are hiring internationally for the first time and want to understand the EOR model: how the legal employer relationship works, what it costs, and when to move to their own entity. It is also for teams that already use an EOR and want to know when the model stops being the right one.

Not the right fit if

Want to understand EOR vs PEO?. EOR and PEO are different structures. An EOR becomes the full legal employer in each country; a PEO typically co-employs workers and requires you to have a local entity already. For a direct comparison, see our EOR vs PEO guide.
Looking for contractor classification advice?. EOR is for employment, not contractor engagement. If your question is whether a worker should be a contractor or an employee, the contractor vs employee guide covers the classification tests, the risks of misclassification, and when a contractor is the right structure.

Find your pick in 20 seconds

If you are…	Start with	Why
Hiring one to a handful of people in a new country, starting soon	EOR	Speed and cost favour EOR at low headcount. You can hire in weeks with no entity setup, and real HR and legal experts carry the local compliance while you direct the work.
Growing headcount steadily in one country over 12 to 24 months	EOR first, then model the crossover	Start on EOR. As the team grows, model the per-country crossover point where your own entity costs less. A provider with an entity path built in, such as Teamed via GEMO, can handle the transition on the same platform.
Large, permanent team in one country, full control required	Own legal entity	Above the crossover point, and where full control of contracts, benefits and IP matters, your own entity is the right structure. A managed entity service such as GEMO can set it up and run it for you if you do not want to manage local payroll and compliance yourself.
Testing a market before committing	EOR	EOR lets you hire one or two people in a country and exit cleanly if the market does not work out. Your own entity has setup, maintenance, and dissolution costs even if you never grow past the first hire.

What is an Employer of Record (EOR) for hiring without an entity?

An Employer of Record (EOR) is a company that becomes the legal employer of workers in a foreign country on another company's behalf. You direct the day-to-day work. The EOR issues the employment contract under local law, runs the payroll, withholds and remits the statutory taxes, carries the employer-side obligations, and takes on the in-country compliance risk. This lets companies hire internationally without incorporating a legal subsidiary in each country they enter.

The alternative is setting up your own legal entity: a subsidiary, branch, or representative office incorporated and registered locally. Your entity is then the employer in that country, giving you full control over contracts, benefits design, IP ownership, and data residency. That control comes with setup time, upfront legal and registration costs, and ongoing local accounting, payroll, and compliance that you manage or outsource directly. The right structure depends on headcount per country, permanence, and how much operational control you need from day one.

What hiring without an entity actually means

Most countries require a company to have a local legal entity before it can employ someone there. Without one, you cannot sign an employment contract under local law, register for employer-side taxes, or meet the statutory requirements that protect the worker. The EOR is the structure that solves this: a third party that already holds the entity in place, so you can hire without one of your own.

Detail	Employer of Record (EOR)	Own Legal Entity
Who can be the legal employer	The EOR provider, which already holds a legal entity in the country and can issue a compliant employment contract on your behalf.	You, once your own subsidiary, branch, or representative office is incorporated, registered, and set up for payroll in that country.
What you can do without an entity	Hire via EOR in weeks. The EOR handles the contract, payroll, statutory filings, and compliance. You direct the work.	Nothing until the entity is live. Engaging a worker on any basis before the entity is ready creates misclassification risk.
What the EOR relationship looks like	The EOR is named on the employment contract. You hold a separate client services agreement with the EOR. The worker knows who their day-to-day manager is: you.	You are named on the employment contract and are the employer in every legal sense. No intermediary.

The entity gap

Companies often discover the entity requirement when a first hire falls through: the candidate is ready but there is no legal vehicle to pay them in their country. EOR is the solution to that gap, not a permanent workaround. It bridges the period before your own entity makes sense or while you are testing whether a market is worth the commitment.

What the EOR takes on and what stays with you

The EOR and own-entity models split the employer obligations differently. Understanding what moves from you to the EOR, and what stays with you regardless, is the practical test of whether EOR is the right fit for how you work.

Detail	Employer of Record (EOR)	Own Legal Entity
Employment contract	Held and issued by the EOR under local employment law. You can customise terms within the EOR's standard framework.	Held and issued by your entity. Full discretion over terms within local legal limits.
Payroll and tax filings	Run by the EOR. Employer-side tax, social security, and statutory contributions are registered and remitted by the provider.	Your obligation. Managed in-house or via a local payroll provider you engage and oversee.
Employer-side compliance	Carried by the EOR: labour-law obligations, works-council consultations where required, and termination procedures under local law.	Carried by you. All compliance obligations sit with your entity because you are the employer.
Day-to-day direction of work	Stays with you. You tell the employee what to work on, when, and how. The EOR is the administrative employer, not the operational manager.	Stays with you in full, plus you hold the employment contract and every legal obligation of the employer relationship.

What you cannot hand off

Even under EOR, you direct the work. The EOR carries the legal employer obligations, but you remain responsible for performance management, the day-to-day relationship, and the decisions about the role. The EOR is not a staffing agency supplying workers it chooses. You choose who to hire; the EOR is the vehicle that makes the hire legally possible.

Time and cost of EOR vs setting up your own entity

The time and cost comparison is where EOR's case is strongest at low headcount. The gap closes as headcount grows. Knowing where the crossover sits in your specific country and salary band is the single most useful calculation you can run when deciding whether to continue on EOR or to build.

Detail	Employer of Record (EOR)	Own Legal Entity
Time to first hire	Weeks from a signed client agreement, typically faster for countries where the EOR holds its own entity rather than working through a local partner.	Weeks to several months depending on the country. Some jurisdictions require notarised documents, capital deposits, and multi-step registrations before payroll can be set up.
Setup cost	A refundable deposit (one month salary) and the per-employee monthly fee. No entity registration or legal fees.	Legal and registration fees for incorporation, plus payroll registration, bank account setup, and often a local adviser or accountant on retainer.
Ongoing cost structure	Per-employee monthly fee. Scales linearly with headcount. The fixed overhead of the EOR is pooled across all its clients, so you pay a share of that efficiency.	Fixed cost of the entity (accounting, payroll provider, compliance overhead) plus the cost of each employee. The fixed cost is spread across your headcount in that country, so the per-head cost falls as you grow.

The crossover point

There is a headcount per country at which the monthly EOR fee per person exceeds the equivalent per-head cost of running your own entity. That crossover varies by country, salary level, and the complexity of your benefits. Teamed models it per country and flags it proactively, rather than waiting for you to ask.

Model your crossover point

Compliance depth and what EOR coverage actually means

EOR coverage numbers from any provider are marketing data: they reflect the total country footprint, not the depth of compliance expertise in each market. The practical question is not how many countries a provider covers, but whether the specific country you are hiring in is served by a provider-owned entity or a vetted partner, and what that means for compliance depth and response time on a complex employment issue.

Detail	Employer of Record (EOR)	Own Legal Entity
Owned entity vs partner model	EOR providers deliver through a mix of owned entities and vetted in-country partners. Where the provider owns the entity, compliance depth and speed are typically higher. Ask per country.	You own the entity. Compliance depth is as good as your own team or the local advisers you hire. No intermediary between you and local law.
Complex employment situations	Real HR and legal experts handle works-council consultations, collective agreement questions, and terminations under local law. The depth depends on whether the provider has in-house country specialists or routes issues to a partner.	You manage directly via in-house counsel or locally retained advisers. Full control, but you carry the accountability.
Example in Germany	Teamed owns a German entity. Works-council (Betriebsrat) consultations and KSchG termination procedures are handled by real HR and legal experts, not routed through a partner.	Your German GmbH or branch employs the staff directly. You carry Betriebsrat consultation obligations and KSchG compliance from day one.

Ask which model applies to your country

Not all EOR coverage is equal. A provider may cover 180+ countries, but the mix of owned entities and vetted partners across that footprint varies. Where you are hiring matters more than the total number. Ask the EOR: is my country served by your own entity or a local partner, and what is your escalation path for a complex situation on the ground?

When your own entity is the right answer

EOR is the right structure for the early stages of international hiring. It is not the right structure forever. At a certain headcount in a country, the economics and the operational arguments shift in favour of your own entity. Acknowledging this openly is not a reason to avoid EOR; it is a reason to use it for what it is good at and to plan the transition before the crossover arrives.

Detail	Employer of Record (EOR)	Own Legal Entity
Economics	At low headcount the per-seat EOR fee is lower than the fixed cost of running your own entity, shared across a small team.	Above the crossover point, the per-head cost of your own entity falls below the EOR fee because the fixed overhead is spread across more people.
Operational control	EOR suits companies that want someone else to hold the compliance obligations and are comfortable within the EOR's employment framework.	Companies that need to design their own benefits, equity plans, or employment terms beyond the EOR's standard framework need their own entity.
Strategic commitment	EOR suits markets you are testing or where headcount is growing slowly. Exit is straightforward: notice under the client agreement, no entity dissolution.	Your own entity signals a long-term, strategic commitment to a market. It is also harder and more expensive to close than an EOR engagement.

The honest case for moving on

Most EOR providers earn only while you stay on EOR, so they have little reason to model the crossover or tell you when your own entity wins. Teamed is built the other way: it models the crossover per country, flags the point at which the calculation shifts, and via GEMO can set up and run your own entity in 90+ countries when that time comes.

See how GEMO works

Moving from EOR to your own entity

The transition from EOR to your own entity is a significant operational event. Done well, it is a one-time administrative effort that leaves your employees employed under your own contracts with no break in service. Done poorly, it creates a legal gap, a payroll interruption, or a compliance exposure. Planning it twelve to eighteen months before the crossover arrives gives enough time to incorporate, run parallel payroll systems, and transfer employees cleanly.

Detail	Employer of Record (EOR)	Own Legal Entity
Who manages the transfer	The EOR hands off employer obligations to your new entity. The employment contract terminates with the EOR and a new one starts with your entity, usually with continuity-of-service protections under local law.	You and your local legal and payroll advisers manage the incoming side: new contracts, payroll setup, statutory registrations, and employee communications.
Employee experience	Employees need new employment contracts. Depending on local law, certain terms and entitlements must carry across. A provider with an entity path on the same platform reduces re-onboarding friction.	Employees gain a direct employer relationship, often with more control over their benefits structure. The change is positive if the terms are at least equivalent to what the EOR provided.
Continuity of service	Local law in many countries treats the transfer as a TUPE-equivalent or employment continuity event, protecting the employee's seniority and accrued entitlements.	You inherit the seniority and entitlements under local law. Get this wrong and you face back-pay claims or constructive dismissal risk.

Where Teamed fits at the transition point

Teamed's GEMO service is designed for this moment. It sets up the entity, takes on the ongoing employment operations, and moves employees from EOR to entity on the same platform with no re-onboarding. Because Teamed earns whether you stay on EOR or move to GEMO, there is no financial incentive to keep you on EOR past the crossover point.

How GEMO handles the EOR-to-entity transition

Why the comparison matters

Behind every line item is a real person, in a real place.

The fee, the FX and the support model are not abstractions. They decide whether the person you hired in Barcelona or Rome is paid right, on time, by someone who knows their employment law. That is the comparison worth running.

What each stakeholder evaluates

Criterion	Legal	Finance	People Ops	Security
First international hire	Confirm whether the country's employment law requires a local entity before employment can start. If it does, an EOR is the compliant path. Ask the EOR whether it delivers through its own entity or a local partner in that country, and what the employment contract framework looks like.	Model the per-seat EOR cost against the fixed cost of setting up and running your own entity at your expected headcount over the next 12 to 24 months. At low headcount, EOR is usually the lower-cost route. A crossover calculator gives the break-even point.	A hire through an EOR onboards like a normal employee: a local employment contract, payroll on the correct pay cycle, and statutory benefits. Set expectations about the EOR relationship: the employee's legal employer is the EOR, but their day-to-day manager is still you.	Ask the EOR where payroll data is processed, under which data protection regime, and what its security posture looks like. For employees in countries with strict data residency rules, confirm whether the EOR's setup complies.
Growing headcount in one country	As headcount grows, local employment law can create works-council (Betriebsrat) thresholds, collective agreement obligations, and other requirements that change the compliance picture. Ask your EOR how it handles these and whether it has in-country expertise on your specific jurisdiction.	Recalculate the crossover point each year as headcount rises. The EOR fee scales linearly; the entity fixed cost does not. There is a point at which building is lower-cost than buying. Know it before it arrives.	At larger headcount, benefits design becomes more important for retention. Understand what the EOR's framework allows and, if you need more flexibility, factor that into your entity timeline.	More employees in a country means more data under local rules. Confirm the EOR's data handling remains appropriate as the volume grows, and review the data processing agreement as part of any contract renewal.
Planning the EOR-to-entity transition	Local law in most countries treats the transfer of employees from an EOR to your entity as a TUPE-equivalent event. Seniority and accrued entitlements carry across. Get local legal advice on the transfer mechanics well in advance, and draft new employment contracts that meet or exceed the terms the EOR provided.	The setup cost of the entity is a one-time investment. Model it against the annual EOR saving at your current and projected headcount to decide when the payback period justifies the transition.	Employees need clear communication about what changes and what stays the same. Pay, benefits, and their day-to-day manager should not change. A provider with an entity service on the same platform reduces the disruption.	Transfer of payroll data from the EOR to your new entity is an administrative event that needs a data transfer agreement and a careful handover. Do not lose the historical payroll records; you may need them for tax and audit purposes.

How hiring without an entity actually works, step by step

The mechanics are straightforward once you know the structure. The EOR is the vehicle; you are the operator. Here is the sequence from first conversation to first day.

Step 1
Choose your EOR and agree the framework
Sign a client services agreement with the EOR. This defines the fee, the notice periods, your obligations as the directing company, and the EOR's obligations as the legal employer. Read every term about deposit, early-exit fees, and what happens if you want to transfer an employee to your own entity later.
Step 2
Make the offer to your candidate
You select the candidate and agree the commercial terms with them, including salary, start date, and any benefits above the statutory minimum. The EOR reviews the employment terms for local-law compliance before the contract is issued.
Step 3
The EOR issues the employment contract
The employment contract is between your candidate and the EOR, not between you and the employee directly. It is issued under local employment law in the target country. You will see a draft; confirm it reflects the agreed terms.
Step 4
Payroll and onboarding
The EOR registers the employee for local payroll, statutory benefits, and social contributions. On the agreed start date, the employee begins work under your direction. The EOR runs payroll each cycle, withholds and remits the statutory deductions, and handles the employer-side filings.

Dyke Yaxley · UK chartered accountancy

Two hires in South Africa, no entity setup, zero compliance issues.

Audit capacity added in 2024: +100%
Compliance issues across the engagement: 0
Employees hired in South Africa, both retained: 2
Entity setup required: None

Challenge

Dyke Yaxley, a UK chartered accountancy firm with over a century of history, needed qualified audit professionals it could not find in sufficient supply locally. Cross-border hiring looked legally complex, and the firm had no South African entity and no appetite to set one up for two people.

Approach

Dyke Yaxley used Teamed's EOR to employ two qualified audit professionals in South Africa. Teamed acted as the legal employer: a compliant local employment contract, South African payroll, statutory tax obligations, and a smooth onboarding. No entity setup, no local counsel on retainer, and no misclassification exposure from treating ongoing, integrated work as contracting.

Result

Both hires exceeded expectations on technical quality, client satisfaction, and cultural fit. Audit capacity doubled in 2024 with zero compliance issues. The firm went from turning down new audit work to confidently taking on additional clients.

Read the full case study →

Interactive tool

Work out when your own entity makes sense

The crossover point depends on headcount in a country, the EOR monthly fee, and the fixed cost of running your own entity in that jurisdiction. A real HR or legal expert can walk you through the calculation and, if EOR is still the right structure for now, the right provider to use.

Model your crossover point

Decision checklist

Use EOR when you need to hire in a new country quickly and at low headcount, with no time or budget for entity setup. It is the compliant route without an entity, not a workaround.
Ask the EOR whether your specific country is served by its own entity or a vetted local partner. The answer affects compliance depth, contract flexibility, and how complex employment situations are handled.
Read the client services agreement before you sign. Understand the deposit, any early-exit fee, the notice period, and what happens if you want to transfer an employee to your own entity later.
Model the crossover point as your headcount in a country grows. There is a point at which your own entity costs less per head than the EOR fee. Plan the transition before the crossover arrives, not after.
When the transition to your own entity comes, treat it as a legal event: new employment contracts, continuity-of-service protections under local law, and payroll data transfer handled with proper agreements in place.

Email this to legal

Honest take

When your own legal entity is the right call

Choose your own entity when headcount in a country is large and stable, and the annual EOR fee per head has grown past the amortised fixed cost of running your own entity. The crossover point varies by country and salary level; model it before you sign the next renewal.
Choose your own entity when you need full control of employment contracts, benefits design, equity structures, or IP assignment clauses that fall outside what the EOR framework allows.
Choose your own entity when a permanent, strategic presence in a country matters for hiring, brand, data residency, or regulatory reasons, and the entity commitment is proportionate to the scale of the business there.

EOR is a stage, not a destination. The right move is to use it while it fits and to plan the entity transition before the crossover arrives. A provider that models the crossover honestly and offers an entity path on the same platform is the partner worth having at both stages.

Questions to ask any EOR before you sign

1In which countries do you hold your own legal entities, and where do you deliver through local partners? Ask per country.
2What does the employment contract look like, and what terms can we customise within your framework?
3What deposit or pre-funding do you require, and which setup, offboarding, minimum-term, or early-exit fees are set out in the contract?
4If we want to move from EOR to our own entity in a country, how does the transition work and is there re-onboarding for our employees?
5What is the typical time from signed agreement to employee start date in the specific country we are hiring in?
6What HR and legal expertise is included on our plan, and how do we reach a real expert when we need one?
7Do you proactively model when our own entity becomes a better fit, or do we have to ask?

Frequently asked questions

What is an Employer of Record and how does it let you hire without an entity?
An Employer of Record (EOR) is a company that becomes the legal employer of your workers in a foreign country, so you can hire there without setting up your own entity. The EOR holds the employment contract, runs the payroll, registers for and remits the employer-side taxes and statutory contributions, and carries the local compliance obligations. You direct the day-to-day work but are not the legal employer. This lets companies enter new markets and hire compliantly without the time, cost, or operational complexity of incorporating a local subsidiary.
How long does it take to hire someone in a new country via EOR?
The timeline depends on the country and the EOR's model for that market. Where the EOR holds its own legal entity in the country, the process is typically faster: agreement, contract review, and first-day onboarding can happen within a matter of weeks from the moment you are ready to hire. Where the EOR delivers through a local partner, timelines can be a little longer. Compare this to setting up your own entity in the same country, which typically takes weeks to several months depending on incorporation requirements, capital minimums, and payroll registration processes.
Who is the legal employer when you use an EOR?
The EOR is the legal employer in the target country. The employment contract is between the EOR and your employee, not between you and the employee. The EOR registers for and remits employer-side taxes, manages the statutory benefits obligations, and carries the local employment-law compliance risk. You have a separate commercial agreement with the EOR that sets out your obligations as the directing company, and you continue to manage the employee's day-to-day work and performance.
What does an EOR cost?
Pricing varies by provider. Teamed charges $599 USD or £479 GBP per employee per month as a flat Fixed Rate, with FX absorbed at zero markup and the applied conversion rate shown against the mid-market reference on every invoice. Statutory employer costs and benefits are passed through at cost. A refundable deposit equal to one month of salary is required to start an engagement; this is standard for the EOR model. There are no setup or offboarding fees, though an early-exit fee may apply if you leave within the first three months, as set out in the contract.
When does it make sense to move from EOR to your own entity?
There is a headcount per country at which the monthly EOR fee per person exceeds the equivalent per-head cost of running your own entity. That crossover varies by country and salary level. Beyond the economics, you may also need your own entity when you require full control of employment contracts, bespoke benefits, equity structures, or IP assignment clauses that fall outside the EOR's standard framework, or when a permanent, strategic presence in a country is a priority for hiring, brand, or regulatory reasons. A provider that proactively models the crossover and offers an entity path on the same system makes the transition straightforward.
What happens to employees when you move from EOR to your own entity?
In most countries the transfer of employees from an EOR to your new entity is treated as a TUPE-equivalent or employment continuity event under local law. Employees' seniority and accrued entitlements carry across. They receive new employment contracts with your entity. Their pay, benefits, and day-to-day manager should not change. A provider that manages entity setup on the same platform as EOR, such as Teamed via GEMO, can reduce the administrative disruption and handle the transfer without requiring your employees to go through a full re-onboarding process.

Common questions

Can I hire someone in Germany without setting up a German entity?
Yes, through a German Employer of Record. Germany requires a local legal entity for employment, but an EOR already holds that entity. The EOR becomes the legal employer under German law, issues a compliant employment contract, runs German payroll, handles Betriebsrat consultation obligations where they apply, and manages KSchG termination procedures. You direct the work. The EOR route is how companies hire in Germany before their own GmbH or branch is set up, or when the headcount is too small to justify a German entity. Teamed owns a German entity and delivers these obligations with real HR and legal experts, not a partner network.
What is the difference between EOR and setting up your own entity internationally?
An EOR lets you hire in a foreign country without incorporating there. The EOR is the legal employer: it holds the contract, runs payroll, and carries the statutory obligations, while you pay a per-employee monthly fee and direct the work. Your own entity makes you the direct legal employer in that country: full control of contracts, benefits, and IP, but requiring setup time and cost, ongoing local accounting, payroll and compliance management, and a dissolution process if you ever close the entity. The choice is a function of headcount per country, permanence, and control requirements. EOR wins at low headcount; own entity wins once the per-seat fee exceeds the amortised fixed cost of running a local entity.

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