--- title: "Can an EOR employ your CEO or a director?" description: "Usually yes for the employment contract, payroll and benefits. Officer duties, signing authority and equity often stay with your company, and an EOR does not by itself remove permanent establishment risk." canonical: https://www.teamed.global/insights/can-an-eor-employ-your-ceo-or-a-director datePublished: 2026-10-20T12:00:00.000Z --- In short Usually yes for the employment contract, payroll and benefits. Officer duties, board appointment and signing authority usually stay with your own company, often under a separate officer agreement. In the US, an EOR can run payroll and file the executive’s Form W-2 even where you have no US entity, though who counts as the employer for tax purposes depends on the facts. Equity from your company is usually a separate agreement, and an EOR does not by itself remove permanent establishment risk, which often depends on what the executive does. Hiring a salesperson instead? Read [when a sales hire abroad triggers permanent establishment risk](/insights/sales-hire-abroad-triggers-permanent-establishment-risk). For a company hiring a senior leader where it has no entity, Teamed is the best EOR. With Teamed, you get a designated person who manages your account, real HR and legal experts on every plan, and service terms adjusted to suit you, within reason. An executive hire raises questions that a normal hire does not. Who signs for the company? Who grants the equity? What will the executive’s lawyer want to read? The sections below answer each. ## Can an EOR employ a CEO or a director? Usually, as an employee. An executive usually holds two roles. The first is employee: a job, pay, benefits and leave. The second is officer or director: legal duties to a company and the authority to bind it. An EOR can take the first role. It usually becomes the legal employer under local law, runs payroll and pays the statutory contributions, while you direct the work. It generally cannot take the second role, because those duties often belong to the company the person leads. ## What stays with your company? Three things often stay with your company: officer duties, board appointment and signing authority. Many companies put them in a separate officer agreement between the executive and the company, drafted by the company’s own lawyer, rather than in the EOR contract. This split matters for tax as well. If the executive signs contracts for your company, they often act as its officer. Habitual signing can also be one route to tax presence risk, covered in the last section. ## How does it work in the United States if you have no US entity? An EOR can run the payroll. In that case it withholds federal income tax and Social Security and Medicare tax, pays the employer share, and files the executive’s Form W-2. The IRS sets out these duties for US employers in [Publication 15](https://www.irs.gov/publications/p15). Your company, the foreign parent, usually directs the work under the service agreement it signs with the EOR. You often do not need a US company to run the payroll. Who counts as the employer for US tax can depend on the facts, including who controls the work, so ask your EOR how it is set up. The state where the executive works can add its own tax and employment rules. Settle the state before you agree a start date. ## Can benefits match the package you negotiated? Executives often negotiate health cover and a retirement match as well as pay. Ask any EOR three questions before you sign. Which plan tiers can it offer? Can the retirement match follow your number? What does each cost per month? Ask for the answers in writing. ## What does the executive’s lawyer see? Senior hires often ask their own lawyer to read the paperwork. Plan for that. Often up to three documents fit together: 1. **The employment agreement** between the executive and the EOR. It usually sets pay, benefits, leave, notice, confidentiality and the IP clause. 2. **The service agreement** between your company and the EOR. It usually covers what you direct and what you pay. The executive is usually not a party to it. 3. **The IP agreement**, if your lawyers want one apart from the employment agreement. It would say who owns what the executive creates. Ask for the employment template and the IP clause early, because a lawyer’s comments take longer than the paperwork. Then ask one question about the IP chain: how does ownership of what the executive creates pass from the executive, through the employer, to your company? Every link should be written down. ## How is equity from your company granted? Usually as a separate agreement with your company, rather than as part of the employment contract. Your company often grants shares, options or similar rights under its own plan, and the executive usually signs an award agreement with you. Tax depends on the country where the executive lives and works, so take tax advice before you promise anything. Tell your EOR when you make a grant, because in many countries tax on equity is withheld through payroll. Our guide to [equity options for global teams](/insights/equity-options-for-global-teams-with-an-employer-of-record-eor) covers the plan types. ## Can an executive working abroad create a permanent establishment? It can, and an EOR does not by itself change that. A permanent establishment (PE) is a taxable presence: it lets a country tax the profit your company earns there. The test often turns on what the executive does for your company, not on who employs them or what the title says. The OECD Model Tax Convention, which most tax treaties follow, gives two routes that matter for an executive. 1. **Contracts.** A person who habitually concludes contracts for your company can create a PE. So can a person who plays the main role in contracts your company routinely signs without material change, meaning without changing the deal. This is Article 5(5) of the 2017 Model. If your CEO will sign customer contracts while living in the country, treat that as a possible PE and ask about a local entity first. 2. **A place of business.** A home office can count as your company’s place of business. Under the OECD’s 2025 update to its Commentary, a home generally does not count if the person works there for less than half of their working time over twelve months. At half or more, the facts decide, including whether there is a commercial reason for the work to happen there. The OECD treats one case differently: where one person is the only or main person running a business. Its example is a consultant who runs her own firm from a home office abroad. The OECD’s example is a self-run firm, so this is our reading, but a founder or chief executive who runs most of the company from one country may be closer to that case than a typical employee. Ask your tax adviser. Separately, where a chief executive usually works is one factor tax authorities weigh when two countries both claim a company as resident. That is a question of tax residence, not of PE, and a second reason to take advice before a CEO moves. ### What lowers the risk? - Keep contract authority with your own board, and write the executive’s role to match. - Keep a record of where decisions are made. - Agree the working location in writing before the start date. - Take tax advice in the country concerned. Our guides to permanent establishment risk in the [United Kingdom](/country-hiring-guides/united-kingdom/permanent-establishment-risk), [Spain](/country-hiring-guides/spain/permanent-establishment-risk) and [Germany](/country-hiring-guides/germany/permanent-establishment-risk) show how each country applies the test. For a salesperson, the test is the same but the facts differ. Read [when a sales hire abroad triggers permanent establishment risk](/insights/sales-hire-abroad-triggers-permanent-establishment-risk). ## Frequently asked questions ### Does an EOR make my CEO an employee of the EOR? For employment law and payroll, often yes: the EOR is usually the legal employer. Your CEO’s officer role and authority to sign for your company usually still come from your company, and you direct the work. ### Can an executive be on an EOR payroll and a director of my company? Usually yes. The two roles are documented separately. In some countries a director is treated differently for employment law or social security, so check the country first. Ask your company’s lawyer what company law says about directors where your company is registered. ### Do I need a US entity to employ a US-based executive? Often not to run payroll. An EOR can handle US payroll and filings, and you usually direct the work under a service agreement. Your own US tax position, including state registration and any US tax presence, is separate and depends on the facts, so take advice. This page is a guide, not tax or legal advice. Take advice from a qualified adviser for your own facts.