Global Hiring Options for Employers
Hiring employees in foreign countries is one of the biggest challenges companies face when expanding globally. Setting up local legal entities is costly and time-consuming, and navigating varied labor laws, tax codes, and benefits can quickly become overwhelming.
Fortunately, International Professional Employer Organizations (PEOs), Employers of Record (EORs), and Global Employment Organizations (GEOs) offer streamlined solutions. These providers enable companies to legally hire and manage international workers without establishing subsidiaries or branches, saving time, reducing costs, and minimizing risk.
Learn what international PEOs, EORs, and GEOs do, how they differ, when to use them, and how to choose the right partner for your business.
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What Is an International PEO?
An international PEO (also called a global PEO) is a company that helps businesses hire and manage employees abroad without needing to establish a local branch or subsidiary.
How Do PEOs Help Businesses Expand Internationally?
International PEOs handle essential HR functions that make global expansion simpler and less risky, including:
- Hiring, onboarding, and offboarding employees
- Processing payroll and managing tax administration
- Managing employee benefits and local compliance
- Ensuring adherence to labor laws and tax regulations
- Converting contractors to full-time employees when needed
- Supporting global employee mobility and relocation
By outsourcing these responsibilities to an international PEO, businesses can quickly access global talent and enter new markets without the administrative burden or legal risks of setting up a local entity.
These services are especially valuable for small and mid-sized companies looking to expand internationally.
What Is an Employer of Record (EOR)?
An Employer of Record (EOR) is a similar service that allows a third party to employ your international workers on your behalf in a legally compliant manner.
While the employees work for your business, the EOR assumes full legal responsibility for:
- Employment contracts
- Local tax withholdings
- Benefits and insurance administration
- Regulatory compliance with labor and employment laws
This arrangement enables your business to concentrate on managing employees’ work and performance, without having to deal with local employment complexities or legal risks.
What Is a Global Employment Organization (GEO)?
A Global Employment Organization (GEO) is a term often used interchangeably with international PEOs and EORs.
All three provide the core service of legally employing international workers and managing compliance, payroll, and benefits.
What sets a GEO apart is that it directly hires and employs personnel in each country. However, in practice, GEOs, international PEOs, and global EORs usually refer to the same type of arrangement.
Choosing the Right Partner
With so many similar terms, it’s easy to get confused. That’s why it’s best to focus on who will be the official legal employer of your overseas hires and who will be responsible for managing compliance in each country, rather than getting caught up in labels.
It’s also essential to confirm that your chosen partner handles employment compliance for both contractors and employees to fully protect your business.
Global PEO vs. EOR: What’s the Difference?
Although the terms PEO and EOR are often used interchangeably, there are important distinctions to know.
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Handles HR and Compliance | | |
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Global PEOs may sometimes operate under a co-employment model, particularly in domestic settings, where legal responsibility is shared between the PEO and your company.
In contrast, EORs typically assume full legal responsibility without co-employment.
In international hiring, “international PEO” and “global EOR” are often considered synonymous, as both legally employ your workers and handle compliance on your behalf.
Who Is the Legal Employer With an International EOR or PEO?
International EORs and PEOs act as the official legal employer for your overseas hires. They manage onboarding, payroll, benefits, and ensure compliance with local laws.
However, employees remain fully integrated with your company. Your management directs their daily work and projects, and they participate in your team just like any other employee.
This setup reduces your legal risks and administrative burden when hiring internationally.
It’s important to note that while domestic PEOs often operate under a co-employment model, where both the PEO and your company share legal responsibility, this arrangement is less common in international hiring.
When Should You Use an International PEO or EOR?
Expanding your business globally presents numerous challenges, including navigating local laws and managing a diverse workforce. Partnering with an international PEO or EOR can simplify this process and help you grow with confidence.
Consider working with an international PEO if your business:
- Wants to test new markets with minimal upfront investment.
- Needs to hire international talent while staying compliant with varying local regulations.
- Faces language or cultural barriers in managing a global workforce.
- Wishes to retain employees who relocate abroad.
- Wants to avoid the legal risks of misclassifying international contractors.
Should You Hire International Contractors or Use a PEO or EOR?
Hiring international contractors might seem cheaper and more flexible, but it carries significant risk.
If you misclassify a contractor who functions as an employee, your business could face:
- Government fines
- Back taxes and penalties
- Reputational damage
To avoid these risks, many companies partner with a global PEO or EOR. These organizations act as the official legal employer on your behalf, handling contracts, payroll, taxes, and compliance with local labor laws. At the same time, you retain day-to-day management of the employees’ work.
Whether called a PEO, EOR, or GEO, these services eliminate legal gray areas and provide protection and stability for your business and workforce.
Key Benefits of Partnering With an International PEO or EOR
Expanding your business internationally doesn’t have to mean navigating foreign labor laws or setting up legal entities in every country.
An international PEO or EOR offers a fast, compliant, cost-effective way to hire and manage talent across borders.
- Faster Market Entry: Launch operations and onboard employees quickly, without the delays and expenses of establishing a local subsidiary.
- Legal Compliance: Staying aligned with local labor laws, tax regulations, and employee classification rules reduces your risk of fines and penalties.
- Cost Savings: Avoid the high cost and complexity of setting up and maintaining foreign entities by outsourcing HR, payroll, and benefits administration.
- Access to Global Talent: Expand your reach and hire top-tier candidates worldwide, unrestricted by local infrastructure or presence.
- Employee Retention: Attract and retain valuable team members who relocate abroad by offering compliant employment, local benefits, and long-term stability.
- Simplified Management: Streamline onboarding, payroll, benefits, offboarding, and compliance through a single, trusted partner.
- End-to-End HR Support: The best global PEOs and EORs handle everything from background checks and onboarding to benefits, tax withholdings, and labor law compliance for both employees and contractors.
- Cultural Integration: These providers also help you navigate cultural expectations, workplace norms, and local employment practices to support smooth team integration and long-term success abroad.
- Shared Responsibilities: While the PEO or EOR serves as the legal employer, your business retains complete control over the employee’s role, responsibilities, and day-to-day work.
Streamlined Access to Group Insurance Plans
Another key advantage of partnering with an international PEO or EOR is access to compliant and competitive employee benefits packages across multiple countries.
These providers often facilitate group insurance plans, such as international health insurance, life and disability insurance, workers’ compensation equivalents, and travel medical insurance, that meet local legal requirements and protect your global workforce.
While the EOR or PEO does not act as the insurer, they contract with reputable insurance carriers to offer tailored coverage.
They handle all the administration, including enrollment, premium payments, and claims management. This makes it simple for your company to provide consistent benefits without needing to negotiate separate policies in each country.
In many cases, providers also offer access to optional add-ons like dental and vision insurance, global employee assistance programs (EAPs), and telemedicine services, which are especially valuable for remote teams or employees in rural areas.
Offering robust group insurance not only helps you attract and retain top international talent but also ensures your employees are protected wherever they work or travel.
How to Find the Best Global PEO For Your Business
Selecting the right international PEO partner is crucial for achieving global success.
To maximize benefits and ensure a good fit with your company’s unique culture and plans, it’s essential to carefully vet providers and ask the right questions to gauge compatibility.
Keep these key factors in mind when selecting the best international PEO for your business:
- Transparency in Pricing: Choose a provider that is upfront about fees, which are typically based either on a percentage of employee compensation plus taxes or a flat fee per employee. Select the pricing model that best aligns with your company’s budget and growth plans.
- Transition Support: Ask if the PEO can facilitate a smooth transition of employees to your own local payroll and benefits when you establish a legal entity, so you won’t need to restart the hiring process.
- Global Reach: If your company plans to expand into multiple countries, choose a PEO with a trusted network and presence across several markets. This simplifies compliance, reduces the complexity of managing multiple providers, and streamlines your global hiring and workforce management.
- Management Control: Although the international PEO is the official employer, your company should retain direct control over employee work assignments and daily management. Confirm with prospective providers that no intermediary management layers will delay or complicate operations.
- Customization: Ensure the PEO can tailor their services to fit your unique operational needs and future growth plans. Discuss with potential partners to confirm they understand your requirements and have the capacity to deliver what you need.
Grow Globally With Confidence
Hiring internationally doesn’t have to involve complex legal setups or risky workarounds.
Partnering with a reputable PEO, EOR, or GEO enables your business to quickly enter new markets, access top global talent, and stay fully compliant with local laws without the need to establish a regional entity.
These employment partners provide the infrastructure, expertise, and flexibility to support your global expansion, whether you’re testing new markets, retaining top employees abroad, or converting contractors into full-time hires.
Additionally, these partners often provide access to comprehensive group insurance plans that ensure your employees are protected regardless of their work location, making benefits management straightforward and hassle-free.
With the right global employment partner, you can focus on scaling operations and growing your international team, while leaving the complexities of legal, administrative, and benefits matters to the experts.
Connect with a Global Benefits Advisor
- Experts in sourcing and implementing global insurance plans
- We’ve built steadfast partnerships with carriers worldwide
- Licensed in Health, Life, Accident, and more
Andrew Blomberg is the Vice President of Global Benefits at ICI, leading innovative insurance strategies for organizations worldwide. An MBA-educated, multi-licensed expert, he specializes in optimizing global benefits programs and guiding clients through complex challenges.
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