Employer of Record (EOR) services are becoming an essential tool for businesses that want to hire internationally without setting up local entities. Still, many decision-makers hesitate because of common myths and misconceptions about how EORs work.
In this guide, we bust those myths and explain what EOR services really mean for businesses of all sizes – and how they fit alongside solutions like PEO, HR Support and International Payroll.
Is EOR just for big multinational companies?
Not at all. While global corporations do use Employer of Record services, they’re often a lifeline for small and medium-sized businesses.
An EOR lets you hire in new markets without the cost or complexity of setting up your own legal entity. For a start-up or scaling business, that means you can tap into talent quickly without getting bogged down in local HR and compliance admin.
Learn more about Leap29’s EOR services for small businesses.
Is EOR only a stopgap solution?
They can be, but they don’t have to be. Some companies work with an EOR for a short project or until they’re ready to set up locally. Others keep the EOR model for years, especially if they value reduced overheads and long-term flexibility.
The only limits are set by local employment laws, and a good EOR provider will help you navigate those.
If the EOR is the legal employer, do I lose control over my team?
No. You still manage your team day to day – setting goals, giving feedback and making strategic decisions.
The EOR simply takes on the official employer responsibilities: payroll, tax, benefits and compliance. Think of them as your back-office HR department, not your replacement.
Wouldn’t it be cheaper to run my own overseas entity?
In theory, yes. But in reality, setting up a local entity comes with high registration fees and ongoing accounting and legal costs – not to mention the risk of making a compliance mistake in a new market.
For many businesses, EORs are the more cost-effective option, especially in the early stages of international expansion.
Do EORs work the same way everywhere?
No. Each country has its own employment laws and EOR rules vary widely. In some markets, they can operate indefinitely; in others, there are time limits or restrictions.
That’s why having an EOR provider with strong local expertise is essential – they’ll know what’s possible and what’s not before you commit.
This is where an experienced partner like Leap29 can help, combining local compliance knowledge with global reach.
You can find out more about country-specific employment laws on the Leap29 website.
If I already have a local entity, can I still use an EOR?
Often, yes. Some companies run core roles through their own entity and use an EOR for specialist hires, remote staff, or markets where they don’t yet have a presence.
However, a few countries restrict this setup, so it’s worth checking local laws before making the call. Leap29 can advise whether an EOR model is the best fit for your structure or if other expansion solutions are better suited for your needs.
Is there a big data security risk with EORs?
A reputable EOR will take security seriously. Look for providers with robust encryption, restricted data access and compliance with GDPR or equivalent privacy laws.
It’s always worth asking for their security certifications before signing a contract.
Can EORs handle specialist or senior roles?
Absolutely. EORs aren’t just for junior positions – they can onboard and manage everything from niche technical talent to senior executives, ensuring your offer is competitive and compliant with local law.
Pairing EOR with services like Executive Search means you can secure top leadership talent and place them compliantly in new markets.
Are EORs just for international hiring?
No. While they’re most commonly used for cross-border recruitment, EORs can also help domestically.
If your workforce is spread across regions with different employment laws, an EOR can simplify HR operations while keeping you compliant.
Leap29 EOR Services
Many of the myths around Employer of Record services come from misunderstanding how flexible and scalable the model is. EOR can be a strategic partner for businesses expanding overseas, hiring remotely or needing extra compliance support – not just a temporary fix.
If you’d like to explore how an EOR could work for your business, or how it could complement services like HR Support and International Payroll, get in touch with Leap29 today.
