Back to BlogEverything you need to know about EOR companies: The key to global expansion
As regional and global competition intensifies, companies are no longer waiting to establish a local presence before tapping into international talent. Cross-border hiring has now become a critical part of growth strategy. In fact, nearly half of employers (47%) identify access to diverse talent pools as one of the best practices to increase talent availability.
But building global teams comes with legal complexity and compliance risks. On top of that, the traditional route of setting up an entity and navigating unfamiliar labour regulations can be costly and time-consuming.
This is why many growing companies are leveraging the support of an Employer of Record (EOR) company. A trusted global EOR company like CXC enables businesses to legally employ talent in other countries without establishing a local entity. These employer of record companies manage everything from employment contracts and payroll to tax compliance and benefits, making sure operations remain agile while meeting local legal standards.
In this guide, we’ll take a closer look at what an EOR company is, how it functions, and why it’s a strategic solution for your global expansion journey in 2025 and beyond.
What is an EOR company and how does it work?
Managing employment across multiple countries is complex, from adhering to local tax laws to administering benefits and drafting compliant contracts. The entire process can quickly become overwhelming, especially without in-country expertise.
Working with an EOR company like CXC helps eliminate much of this complexity by taking on the legal and administrative responsibilities. However, not all employer of record companies operate the same way. Understanding their structure, how they manage compliance, and the processes they follow is important to choosing the right partner and making informed decisions about your global workforce strategy.
Defining the Role of an Employer of Record (EOR)
Let’s start defining what is an EOR for companies looking to leverage this model. An Employer of Record (EOR) is a third-party organisation that takes on the legal responsibilities of employing someone in a specific country on behalf of another business. While the company retains full control over the employee’s day-to-day responsibilities, the EOR company becomes the official, legal employer for regulatory and tax purposes. This means the EOR company is responsible for:
- Drafting and executing local employment contracts.
- Managing payroll and tax contributions.
- Administering benefits in line with local labour laws.
- Ensuring proper onboarding and termination procedures.
- Complying with ongoing reporting and labour requirements.
Importantly, the EOR structure separates legal employment from operational control. The client company directs the work; the EOR handles legal and administrative risk.
How EOR companies simplify international employment
The traditional route of international hiring typically requires a company to register a legal entity, set up a local payroll, open a bank account and comply with local employment regulations. This process can take months and require substantial legal, HR, and financial investment.
An EOR simplifies this by using its existing legal entity to onboard and employ the worker. The EOR company handles legal and administrative tasks that come with hiring international talent such as local labour compliance, employment documentation, country-specific tax withholdings, benefits administrations, currency exchange, and more.
For example, GitLab, a global tech company, was looking for a scalable solution that would allow them to access and engage talent in markets where they do not have a legal entity. They partnered with CXC, as their reliable global EOR company, to help them hire talent quickly and compliantly. By leveraging CXC’s EOR solution, they managed to hire highly skilled talent in Romania, Poland, Portugal and more.
Legal and compliance benefits of using an EOR
Every country has its own set of employment laws covering everything from working hours and tax contributions to mandatory benefits and termination rules. For companies expanding internationally, keeping up with these requirements (and their constant changes) can quickly overwhelm internal HR and legal teams.
Consider the U.K., where IR35 legislation defines strict rules around contractor classification. Or Brazil, where employers must provide a 13th-month salary, vacation bonuses, and contributions to the FGTS severance fund. Missing any of these obligations can lead to fines or disputes.
This is where using a global EOR company like CXC adds real value. They have in-country experts who ensure that every employment contract, payroll process, and benefit align with local labour laws and collective agreements. By partnering with an EOR company, companies can avoid worker misclassification, inaccurate tax filings, missed statutory benefits, wrongful termination, and more.
With an EOR, you have peace of mind knowing that employment is handled compliantly.
Why your business needs a global EOR company for international hiring
Hiring across borders opens the door to many opportunities: new markets, specialised talent, and competitive advantage. But it also introduces layers of legal and operational complexities that many businesses aren’t equipped to handle on their own. A global EOR company like CXC offers a practical way to manage international hiring without the delays and overhead that usually come with expanding into new countries.
Here are the top three reasons why more companies are choosing this approach.
Easily expand your business anywhere
Establishing a local legal entity in another country is often expensive and time-consuming. It can involve registration with government agencies, opening local bank accounts, finding legal advisors, and understanding unfamiliar employment laws. For many businesses, particularly small and mid-sized ones, this level of commitment just to hire a few employees isn’t strategic and realistic.
A global EOR company like CXC provides an established legal structure that allows you to onboard employees in new markets quickly. You don’t need to register a local branch or navigate government paperwork. The EOR acts as the legal employer and handles the required documentation while you focus on managing the team and operations.
With this setup, you can easily test new markets, support remote teams, or scale operations globally—without committing to permanent infrastructure right away.
Minimise risk with global EOR solutions
Misclassifying a worker, missing a required benefit, or using an incorrect contract template can put your company at risk.
Employer of record companies help reduce that risk by ensuring that all employment activities follow local laws. From mandatory benefits and tax reporting to termination procedures and contract terms, they keep things in line with local requirements.
If you don’t have the internal bandwidth to keep up with legal updates, an EOR company can help navigate with these changes even in complex markets.
Cost-effective global hiring strategy with EOR companies
The traditional way of international expansion often comes with high upfront costs: setting up entities, hiring legal and accounting teams, and running local payroll systems. Even for businesses with long-term plans, the return on that investment can take time.
An EOR company offer a more cost-effective alternative solution. You pay for the employees you need, when you need them without the fixed overhead of maintaining an entity. The EOR model is especially useful for companies that want to:
- Hire globally distributed remote teams.
- Launch temporary or project-based roles in new regions.
- Pilot a market before making a full commitment.
It’s a flexible, scalable way to manage global hiring that helps you use your resources more efficiently.
The benefits of partnering with Employer of Record companies for global workforce management
Managing a global workforce involves far more than hiring the right people. Every country adds its own rules, systems, and expectations, which makes even basic tasks like onboarding or payroll more complex. Partnering with an EOR company like CXC simplifies this process, helping you stay focused on your business while ensuring that your international operations run smoothly and stay compliant.
Here’s how working with a global EOR company can improve workforce management across borders:
Seamless onboarding and employee administration
Onboarding employees in a new country often means dealing with unfamiliar employment laws, mandatory documentation, and local systems for tax and social contributions. Without in-country experience, this can lead to costly errors or a poor experience for the new hire.
Employer of record companies streamline this process by handling everything from employment contracts to tax registration and benefits enrollment. They already understand the local procedures and ensure each employee is onboarded correctly, using compliant documentation and timelines.
Having a seamless onboarding gives employees a head start and a consistent experience, no matter where they are located.
Ensuring compliance with local labour laws
Labour laws vary significantly by country and even by region. One country may require mandatory pension contributions and overtime pay like the Philippines; another may enforce strict rules on termination or working hours like France. Understanding these laws is critical—and getting them wrong can lead to fines, disputes, or legal issues.
That’s where a global EOR company adds real value. Their teams stay up to date on labour regulations and make sure your employment practices follow the rules. From drafting contracts that meet legal standards to handling payroll taxes and social insurance contributions, the EOR company ensures that each worker is managed in accordance with local requirements.
If you’ve ever asked, “What is an EOR and how does it help with compliance?” this is a key answer: it acts as a local expert on your behalf, reducing your legal risk while maintaining a strong foundation for employee relationships.
Reducing operational complexity in new markets
Hiring international talent often involves setting up new processes for payroll, benefits, contracts, and reporting—each tailored to a specific country. For businesses entering multiple markets or managing small teams globally, that can quickly become overwhelming.
An EOR company removes much of this complexity by centralising employment operations under one service provider. You don’t have to build separate HR and legal processes for each country; instead, you rely on the EOR company to handle the administrative side of employment while your internal team stays focused on strategy and performance.
For businesses growing across several countries at once, employer of record companies offer a consistent way to manage employment—without losing visibility or control.
What to look for in a trusted EOR company
Choosing the right EOR company is a strategic decision that can influence how smoothly your business grows across borders. While most employer of record companies offer similar core services such as payroll processing and contract management, their reach, approach, and reliability can vary significantly.
Here are the important aspects you need to look for in a trusted EOR company:
Global presence and expertise
When expanding into new markets, you need more than a service provider; you need a partner with real on-the-ground understanding. A global EOR company should have legal entities or strong partnerships in the countries where you plan to hire, along with teams who understand the nuances of local labour laws, tax systems, and cultural norms.
As a trusted EOR company, CXC operates in over 100+ countries, with regionally based teams that bring deep knowledge of local compliance requirements. Whether you’re hiring in Australia, Europe, LATAM, or Asia, CXC ensures employment practices are adapted to each market—not just copied and pasted from one region to another.
This way, you can easily scale internationally while staying aligned with legal and cultural expectations in each location.
Comprehensive employee benefits and payroll management
A reliable EOR company doesn’t just process payroll, it ensures your team receives competitive, compliant benefits that meet local standards. This includes healthcare, pension contributions, paid leave, and statutory bonuses, all tailored to the laws of each country you’re hiring in. Employer of record companies that provide surface-level support often leave gaps that can affect retention or even result in non-compliance.
At CXC, we understand the importance of paying your teams on time accurately and compliantly. Our system is built to manage complexity across multiple jurisdictions, paying workers on time in their local currency and with all required deductions and contributions applied.
Scalability and flexibility for your business needs
Every business evolves and a reliable EOR company should be able to adapt as your hiring needs change. Whether you’re testing a single market or planning long-term multi-country expansion, the EOR company should offer flexible service levels and contract types that support that growth.
CXC’s EOR solution supports businesses at different stages of international expansion. From short-term projects and contract hires to long-term workforce planning, we offer scalable solutions without locking companies into rigid structures. Our service flexibility also makes it easier to transition from EOR to direct employment if and when your business decides to establish its own legal entity.
How CXC’s EOR services can help your business succeed globally
Building a global team requires both structure and adaptability. It takes the right systems and support to succeed. CXC’s EOR services help simplify this process by taking on the administrative and legal responsibilities, so your business can focus on growth while we manage the details behind the scenes.
Simplifying global employment compliance with CXC
Navigating employment laws in different countries is one of the biggest challenges for companies expanding internationally. Tax rules, mandatory benefits, working hours, and termination laws all vary—sometimes significantly—from one jurisdiction to another. Keeping up with these changes is difficult, especially without in-country legal expertise.
As a global EOR company, CXC helps reduce this burden. With a presence in over 100 countries, CXC supports clients by handling employment contracts, tax withholdings, social contributions, and compliance with national labour laws. Its local teams stay up to date with country-specific regulations, so you can operate confidently without the risk of penalties or legal complications.
Tailored EOR solutions for your business needs
No two businesses expand the same way. Some need to hire a few remote employees across several regions; others are rolling out market-entry teams or working with local contractors. A reliable EOR company like CXC should be able to adapt to different structures, timelines, and industries.
CXC offers flexible service models to fit your hiring strategy. Whether you’re scaling quickly or testing a new market, CXC works with you to design solutions that match your operational goals.
Unlike one-size-fits-all employer of record companies, CXC works closely with businesses to align its services with local conditions, internal workflows, and long-term plans.
Learn how CXC’s EOR services can accelerate your international growth
Speed matters in global hiring. Long setup times for local entities can slow down a company’s ability to enter new markets or onboard critical talent. A global EOR company like CXC helps eliminate those delays by using its own in-country infrastructure to hire on your behalf quickly and compliantly.
CXC supports onboarding in days, not months. That means you can start operating in a new country without waiting for legal registrations or administrative clearances. This is especially helpful for project-based hiring, rapid scaling, or entering competitive markets where timing is crucial.
Ready to start building your global teams? Speak to our team today.
