The All-in-One Guide for Global Hiring

Legal entity requirements

For businesses that want to expand across borders but don’t have a legal entity established in the target country, EOR would be a better choice. EOR providers maintain legal entities in multiple countries, alleviating businesses from the complexities of establishing their own.

Legal employer status

In a PEO arrangement, the PEO becomes a co-employer of the client's employees and shares responsibility with the client for various employment-related matters. On the other hand, the EOR assumes the role of a legal employer for every step of the hiring process.

Risk and liability

Since both the PEO and the client share the employment responsibilities, they also share the risks and liabilities, offering risk mitigation benefits for both parties. The EOR assumes primary responsibility for all risks, including compliance with local labour laws.

Scope of services

EOR services focus on managing the administrative aspects of employment, such as payroll processing, tax withholding, benefits administration, and compliance. PEOs offer a broader range of HR services beyond basic payroll and benefits administration, including performance management and employee relations.