How to build a global team without a local entity

Building a global team is one of the most powerful ways to scale your business. But the old way is broken. The costs and complexity of setting up local legal entities in every new country are a major barrier to growth. There’s a smarter way. An Employer of Record (EOR) lets you hire top talent anywhere in the world, without the administrative nightmare.

This streamlined approach gives you the flexibility and efficiency to build your dream team, no matter where they live. Forget the old rules. It’s time to access a global talent pool and drive your business forward.

The challenge with direct international hiring

Before we explore the benefits of a no-entity approach, it’s crucial to understand the challenges of hiring talent directly in another country, even on a temporary basis. For growing businesses, these hurdles can halt expansion before it even begins.

• Complex entity registration: Setting up a legal entity in a new country is a minefield of bureaucracy and delays. The process can take months, drain resources, and distract you from your core business goals.
• Navigating foreign laws: Employment laws vary drastically between countries. From contracts and termination rules to working hours and leave entitlements, staying compliant is a full-time job. A single misstep can lead to significant legal and financial penalties.
• Payroll and benefits headaches: Managing payroll and benefits in a country where you have no expertise is a high-risk game. Different tax systems, social security contributions, and mandatory benefits create a complex web that is easy to get wrong.

These challenges aren’t just inconvenient; they’re significant risks that can expose your business to unforeseen costs and legal disputes, stifling your ability to scale with confidence.

How an Employer of Record (EOR) simplifies global expansion

An Employer of Record service can help with these expansion roadblocks. An EOR acts as the legal employer for your international team members, handling all HR and payroll duties on your behalf. This allows you to tap into global talent pools quickly and efficiently.

Here’s how an EOR transforms your approach to building a global team:

Compliance

An EOR gives you immediate access to local expertise. Instead of spending months researching labour laws, your EOR partner figures that out for you. They manage:

• Employment contracts: Creating contracts that can protect both your business and your employees.
• Labour laws: Understanding all aspects of local regulations, from minimum wage and overtime to termination procedures.
• Risk mitigation: Minimising your exposure to legal disputes and penalties by handling employment for you.

Streamlined and accurate payroll

Payroll errors are costly. The risk of mistakes multiplies when operating in an unfamiliar country. An EOR processes payroll with that local knowledge in mind, based on your instructions. This includes calculating correct tax withholdings, managing social security contributions and considering local payment laws. You get the peace of mind that your team is paid when you need it.

A unified employee experience

You want your entire team to feel connected, regardless of their location. Using different systems for international employees creates confusion and a disconnected culture. An all-in-one platform that integrates with an EOR service allows you to manage everyone under one roof. With a solution like Employment Hero, you can handle leave, documents, expenses, and performance for your entire global workforce from a single interface. This creates a consistent and inclusive experience for all team members.

Significant cost and admin savings

Establishing and maintaining legal entities is expensive. The no-entity model, made possible by an EOR, drastically cuts overhead costs. You avoid the high fees associated with entity setup, legal consultations, and ongoing administrative burdens. An EOR centralises tasks like payroll, benefits administration and HR management, freeing up your team to focus on strategic growth initiatives instead of manual paperwork.

Access to unrestricted talent pools

Why limit your talent search to one city or country? By partnering with an EOR, you can hire the best person for the job, wherever they are. This access to diverse skills, experiences, and perspectives enhances innovation and makes your business more adaptable. You can respond faster to market changes and customer needs, giving you a powerful competitive advantage.

When do you still need to set up a local entity?

While the EOR model is a game-changer for many businesses, it’s not a universal solution for every situation. Certain business activities may still require you to establish a physical and legal presence.

For example, companies involved in industries like manufacturing, physical retail or certain regulated professional services often need local facilities, storefronts or specific licenses to operate. If your business model requires a physical footprint to produce goods or serve customers directly, setting up a formal corporate entity may be unavoidable. It’s essential to evaluate your long-term strategic goals and operational needs to determine the right path for your expansion.

Hire top talent anywhere with HeroForce 

In an era of digital connectivity, relying on an Employer of Record offers a compelling and powerful alternative to traditional methods of building a global team. It empowers you to grow faster, smarter, and with greater confidence.

HeroForce is Employment Hero’s Employer of Record service. We enable you to hire talent in over 180 countries, simplifying your expansion while ensuring everything is done legally and ethically.

Whether you’re expanding into new markets or struggling to fill critical roles, we connect the best talent with the best employers.