Top 20 Countries Where You Definitely Need an EOR Service

Companies face numerous challenges when starting a business, especially in a new country. From HR to operations, outsourcing business requirements is a heavy need. Meeting HR needs, in particular, is an important need for companies to meet. Employer of Record (EOR) services are the most beneficial in this regard, and its need has increased significantly in the last decade.

Entering a new market always requires unmatched expertise and compliance. Numerous countries in the world have strict laws in place for labor and employment, making it extremely difficult to comply. It is where the Employer of Record services come into action. It assists companies in hiring and paying legally compliant foreign workers. It also helps to recruit and retain top talent. An efficient EOR service will relieve stress and save you time so you can concentrate on expanding your business. Here are the top 20 countries in the world where you will require EOR services.

Employer of Record Service (EORs) – What is it?

Employer of Record, or EOR, is a third-party company that handles your business’s HR- and employment-related activities. Compliance, payroll, taxes, onboarding, contract negotiations, and all other employee-related tasks can be handled by an EOR.

Companies and employers benefit highly from using an EOR. It enables you to put more time and effort into your business than you would typically be able to if you had to build the infrastructure necessary in a new country.

Companies often use EOR services when they want to hire workers in foreign marketplaces where they don’t already have a presence. Any number of employees may be hired with an EOR. Some businesses will hire EORs to supervise global employees. This hiring method is easier and more affordable than creating a legal corporation for themselves, and it ensures adherence to the applicable employment rules in each local jurisdiction.

Countries Where You Need Employer of Record Service

Based on the laws and legislation in place, every country follows its own set of compliance. In these countries, you will require someone that provides world-class EOR services. You may choose which new market is best for your business by looking at this list of the top 20 nations.

1. China 

China is a rapidly growing economy with a complex legal system and strict labor laws. As a result, foreign companies looking to expand into China often need help with compliance issues, including hiring and payroll. EOR services provide a solution for companies to navigate China’s complex labor laws while remaining compliant. 

China’s GDP is expected to reach $25.47 trillion by 2026, making it an attractive market for foreign investment. EOR services ensure compliance and mitigate risk, allowing foreign companies to focus on growth and expansion in China’s booming economy.

2. India 

Indian employers must comply with various legal requirements for minimum wage, working hours, social security, and taxes. India ranks 65 out of 190 countries in the ease of doing business index, indicating the difficulty of starting and running a business there. EOR services help companies navigate these challenges by providing legal and administrative support, such as payroll processing, compliance management, and employee benefits. 

3. Brazil 

Employment contracts in Brazil are for indefinite terms. Fixed-term employment is there in some cases apart from employment-at-will. Companies can terminate the agreement without cause. To solve this, EOR services manage the timesheets, probation, work permits, and other benefits per Brazilian laws. Consequently, you will have free time to redefine business growth and increase profits. The EOR market in Brazil is expected to grow by 60% by 2028, highlighting the increasing demand for this service.

4. Mexico 

By hiring an employer of record service, you can outsource the administrative burden of payroll, taxes, and compliance and focus on core business operations. Mexico has a high level of informality in the labor market, with an estimated 60% of workers operating in the informal sector. This can create challenges for companies trying to comply with labor laws. An employer of record can help ensure compliance with regulations and reduce the risk of penalties and fines.

5. Russia

Employers must comply with strict regulations regarding payroll, taxes, benefits, and employment contracts. There can be hefty fines and legal penalties without complying with the regulations. Russia ranks 28th out of 190 countries for ease of paying taxes, indicating the challenges businesses face in navigating the country’s tax system. Employers of record services can help businesses navigate these complex regulations and ensure compliance, reducing the risk of legal and financial penalties. 

6. Indonesia 

The Indonesian economy is the fastest growing in the world. The labor and employment laws apply to nationals and not foreign people. It is difficult to terminate employees because of different employment regulations under Indonesian law. EOR services save the hassle of understanding laws in detail per the company’s circumstances and handle staffing and payroll for record management. 

7. Turkey 

The Turkish Republic is loyal to foreign investments and attracts new economic interest. It is essential to understand Turkish labor laws and the obligations of the people. EOR services help expand the company internationally by managing HR activities with a team of professionals.

8. South Korea

South Korea has a highly competitive job market, with a low unemployment rate and a high demand for skilled workers. An employer of record service can help companies attract and retain top talent by providing comprehensive HR support and benefits packages. Using an EOR service can save companies time and money by streamlining payroll and administrative tasks.   

9. Saudi Arabia 

Saudi Arabia’s legal system is based on the Quran and Sharia laws offering punishment to offenders. It mandates all foreign employees, especially men, to work in the country’s companies. However, women must follow restrictions to work in the country. EOR services might help you better manage different sets of employees here. They help mitigate the challenges of setting up local offices and managing workers.

10. United Arab Emirates

Establishing a business in different countries requires external intervention because learning the compliances at once is impossible. Further, UAE’s employment regulations vary in all 7 federation states. Companies operate under laws of taxation, foreign ownership, and capital. Having EOR solutions is beneficial for controlling employees’ life cycles and simplifying business conduct by handling complex HR-related matters. Therefore, it improves business prospects by researching country laws in detail. 

11. Qatar 

Qatar is a rapidly growing economy, with many foreign companies establishing a presence there. Though Qatar’s employment laws do not differ much from the Asia-Pacific region, you may use EOR services for the expansion. It manages the contract laws, payroll process, and foreign tax rules without a local entity. EOR services act as the HR and manage work permits, VISA, notice periods, and termination of employees. 

12. Kuwait

The employment regulations in Kuwait can be complex and confusing, but they do not differ much from other countries. However, to mitigate the challenges arising from companies in setting up local offices, EOR services become beneficial. It makes the payroll provider aware of the labor laws and international employees. It ensures smooth and compliant employee processing and responsibilities. 

13. Oman 

Foreign nationals who intend to work in Oman need sponsorship per Omanisation policy. It gives access to employment and minimum quotas depending on the job sector. On the other hand, the Labor laws of Oman apply to all employees in the private sector and subsidiaries. The country needs staff deployment without an Omani entity, and EOR makes the process faster and easier. EOR solution companies have established companies in Oman that run payroll for the business. 

14. Bahrain 

Bahraini labor laws apply to overseas individuals and nationals. Some differences( statutory working hours, overtime, paid holidays, etc.) need careful study and analysis. Business owners must know the local traditions and regulations to establish the company. The process seems challenging, but EOR services simplify the implication of Bahrain employment laws.

15. Egypt

Egypt’s employment laws are governed by the following:

• 1978 government service laws for civil employees
• Public sector employees by law no. 48
• Employees in a public commercial by law no. 203

EOR services can help you navigate these laws and successfully expand your business in Egypt. 

16. Vietnam 

Vietnam is a hotspot for foreign investment due to its rapid economy and trade agreements. The Vietnamese labor laws are employee-friendly, but new rules seem complex by international standards. The economy constitutes 58 million people but lacks skilled labor in the current labor force. EOR companies handle end-to-end recruitment, payroll, overtime, probation, and termination, among other aspects of Vietnamese employment laws. It gives a competitive edge to expand business in Vietnam. 

17. Thailand 

Labor laws and regulations in Thailand favor both the employees and employers to address provisions and protection. Acts, Decrees, and employment regulations are passed by the Thai parliament containing detailed descriptions. Some provisions include Workmen’s Compensation Act, Occupational Safety, Health, and Environment Act, etc. 

The Thai employment laws are detail-oriented and require specifics to read, which causes obligations for companies. EOR solutions provide expertise in Thai labor laws that help businesses expedite in new Thailand domains without wasting resources.

18. Malaysia 

Employment in Malaysia comes under the Employment Act of 1955. It states the terms and conditions of employment contracts (annual leaves, maternity leave, vacations, etc.), including the Employees Provident Fund Act of 1991. On the other hand, Minimum Wages Order 2018 pays the minimum wage to everyone working in Malaysia, including retirement benefits and leave policies. 

Learning the intricacies and details of employment agreements is essential. EOR solutions facilitate HR management and act as the legal employer of the company for payroll management and contracts. 

19. Philippines 

The country has a complex employment landscape and risks of penalties to comply with the regulations. The EOR services allow all foreign companies to legally appoint Filipinos without establishing any local entity. It does not violate Filipino employment laws for the onboarding or hiring process. The Philippines needs more speed and local expertise for expansion, so EOR services are beneficial without bearing the extra cost. 

20. Singapore 

Singapore has complex legal and regulatory requirements for hiring and managing employees. The EOR services in Singapore ensure that all employment contracts and relevant documents comply with their laws and jurisdiction. It is essential for the new employees for the onboarding process after discussions on payroll services, data protection, and other regulations. 

Final Takeaways

It makes sense to rely on professionals to serve as your one-stop shop for all your worldwide employment needs as the world becomes increasingly interconnected, mainly when foreign hiring efforts are essential to your company’s survival. 
Tarmack is a full-stack Global Talent Management Platform that provides local employment, payroll, compliance management, and other talent services, designed to scale your business swiftly and efficiently in South Africa, Europe, the Middle East, to any country in the world! If you want any help regarding global talent management, visit our website.