Employer of Record (EOR)- Global Employment Solution for Modern Businesses
Global hiring has shifted from an optional growth strategy to a core business requirement. Companies expanding internationally aim to access specialized talent, control operational costs, and enter new markets faster. However, cross-border hiring introduces complex challenges, including local employment laws, payroll compliance, taxation, and regulatory requirements.
Establishing a legal entity in every country is often expensive, time-consuming, and operationally inefficient—particularly for startups, SMEs, and rapidly growing businesses. These barriers can delay expansion and increase compliance risks.
An Employer of Record (EOR) provides a practical and compliant alternative. Under the EOR model, businesses can hire employees in foreign countries without setting up a local entity. The EOR becomes the legal employer, managing payroll, tax filings, employment contracts, statutory benefits, and labor law compliance, while the client retains full control over daily operations and performance management.
Eicra BD’s Employer of Record services offer end-to-end global employment support. We help businesses onboard international employees quickly, remain fully compliant with local regulations, and scale their workforce with confidence. Our EOR solutions are designed to reduce administrative burden, minimize legal risks, and enable seamless global expansion—allowing companies to focus on growth, not bureaucracy.
What Is an Employer of Record (EOR)?
An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of another company. While the client company maintains full control over the employee’s daily tasks, performance management, and business direction, the EOR assumes responsibility for all legal and administrative employment obligations. This includes employment contracts, payroll processing, income tax withholding, statutory benefits, social security contributions, and compliance with local labor laws. By acting as the legal employer, the EOR shields the client company from regulatory risk while enabling rapid and compliant international hiring.
Recent global employment insights show that:
1. Over 65% of multinational companies now use EOR or similar models for cross-border hiring
2. Global remote hiring increased by over 150% in the past five years
3. Companies using EOR reduce international hiring timelines by up to 70%
Who Should Use an EOR in Bangladesh?
An Employer of Record (EOR) in Bangladesh is ideal for organizations that want to hire or manage employees locally without establishing a legal entity. Below are the key groups that benefit most from using an EOR in Bangladesh:
1. Foreign Companies Entering the Bangladesh Market
International businesses testing or entering the Bangladesh market can hire employees legally and compliantly through an EOR without registering a local company.
2. Startups and Scale-Ups
Startups looking to expand quickly can avoid the high costs, legal complexity, and time required for entity setup while still accessing skilled local talent.
3. SMEs Expanding Internationally
Small and medium-sized enterprises can build teams in Bangladesh while keeping operations lean and compliant with local labor laws and tax regulations.
4. Companies Hiring Remote or Distributed Teams
Businesses employing remote workers, developers, engineers, or support teams in Bangladesh can rely on an EOR to handle payroll, contracts, benefits, and statutory compliance.
5. Project-Based or Short-Term Hiring Needs
Organizations running temporary projects, pilots, or market research initiatives can hire locally for a defined period without long-term entity commitments.
6. Businesses Seeking Compliance Risk Reduction
Companies unfamiliar with Bangladesh’s labor laws, payroll rules, and tax obligations can minimize legal and compliance risks through an experienced EOR provider.
7. Companies Transitioning from Contractors to Employees
Firms converting independent contractors into full-time employees in Bangladesh can use an EOR to ensure proper classification and compliance.
An EOR in Bangladesh is best suited for businesses that want fast, compliant, and flexible hiring—without the cost and complexity of setting up a local entity.
How the Employer of Record Works
Understanding how the EOR model functions is essential to appreciating its value. The model is built on a clear separation between legal employment responsibility and operational control, allowing businesses to focus on growth while the EOR manages compliance. Before listing the core elements, it is important to note that this structure ensures both flexibility and legal protection across jurisdictions.
Key Functional Elements of the EOR Model:
- The EOR is the legal employer on record
- The client company manages daily work and performance
- Employment contracts comply with local labor laws
- Payroll and statutory payments are handled locally
- Compliance responsibility rests with the EOR
Why Businesses Choose Employer of Record Services
As companies expand internationally, they encounter unfamiliar employment regulations, complex tax systems, and administrative burdens that can slow down growth. EOR services address these challenges by providing a compliant employment framework without requiring local entity setup.
Before outlining the benefits, it is important to understand that EOR adoption is driven not only by convenience, but also by risk management, speed to market, and cost predictability.
Key Benefits of Employer of Record Services:
- No requirement to establish a local legal entity
- Faster international hiring and onboarding
- Reduced legal and compliance exposure
- Centralized payroll and HR administration
- Predictable and transparent employment costs
Easy scalability across multiple countries
Global Hiring Challenges Without an EOR
Hiring employees internationally without an EOR exposes businesses to multiple operational and regulatory risks. Each country has unique labor laws, tax requirements, and employment standards that must be followed precisely.
Before listing the challenges, it is important to recognize that even minor compliance errors can result in penalties, audits, or reputational damage.
Common Global Hiring Challenges:
- Lengthy and costly entity incorporation
- Complex labor law compliance
- Payroll tax miscalculations
- Mandatory social security obligations
- Termination and severance risks
Permanent establishment exposure
What are the Legal Risks?
When hiring employees in Bangladesh—especially without local expertise—companies may face several legal risks. Using an Employer of Record (EOR) helps reduce these risks, but it’s important to understand them clearly:
1. Non-Compliance With Labor Laws
Bangladesh has specific rules under the Bangladesh Labour Act, including working hours, leave, termination, and employee benefits. Misunderstanding or ignoring these laws can result in penalties or legal disputes.
2. Employee Misclassification
Hiring workers as independent contractors instead of employees can lead to fines, back payments of benefits, and legal claims if authorities determine misclassification.
3. Payroll and Tax Errors
Incorrect salary calculations, late tax deductions, or failure to deposit income tax and social contributions can trigger audits, penalties, and reputational damage.
4. Improper Employment Contracts
Non-compliant or unclear employment agreements may be legally unenforceable and expose businesses to disputes related to termination, notice periods, or benefits.
5. Termination and Severance Risks
Bangladesh has strict rules around employee termination, notice, and severance pay. Non-compliance can lead to wrongful termination claims and financial liabilities.
The main legal risks involve labor law compliance, taxation, contracts, and employment classification. An experienced EOR in Bangladesh helps mitigate these risks by ensuring compliant hiring, payroll, and employment management from day one.
Employer of Record vs PEO: Understanding the Difference
Many businesses confuse Employer of Record services with Professional Employer Organizations (PEOs). While both provide HR support, their legal roles differ significantly. Before reviewing the differences, it is important to note that a PEO requires the client company to have a local entity, whereas an EOR does not.
Aspect | EOR | PEO |
Legal Employer | EOR | Client company |
Entity Required | No | Yes |
Compliance Risk | Managed by EOR | Shared |
Ideal Use Case | Global hiring | Domestic HR outsourcing |
Employer of Record Compliance Responsibilities
Compliance is the core value proposition of an Employer of Record. Employment laws vary significantly by country, and failure to comply can lead to serious legal consequences. Before detailing responsibilities, it is important to understand that EOR compliance is jurisdiction-specific and continuously updated.
Key Compliance Areas Covered by an EOR
- Local labor-law-compliant employment contracts
- Payroll processing and tax withholding
- Social security and statutory contributions
- Employee benefits administration
- Leave, termination, and severance compliance
Reporting to labor and tax authorities
Employer of Record Services Offered by Eicra BD
| Year | Market Growth Trend | Key Drivers |
|---|---|---|
| 2015 | Low to Moderate Growth | Early adoption by multinational companies |
| 2017 | Steady Growth | Expansion of global hiring needs |
| 2019 | Consistent Upward Trend | Compliance and payroll complexity |
| 2020 | Sharp Increase | Remote work acceleration & border restrictions |
| 2022 | High Growth | Cross-border hiring and regulatory challenges |
| 2024 | Mainstream Adoption | EOR as a global employment strategy |
Risks of Choosing the Wrong EOR Provider
While EOR services offer significant advantages, selecting an inexperienced or non-compliant provider can expose businesses to serious risks. Before listing risks, it is important to understand that EOR quality directly impacts legal exposure.
Potential Risks of a Poor EOR Choice:
- Non-compliant employment contracts
- Payroll tax errors and penalties
- Delayed statutory filings
- Poor employee experience
Why Choose Eicra BD as Your Employer of Record Partner
Choosing the right EOR partner is a strategic business decision. Eicra BD combines local expertise, global understanding, and compliance-driven execution to deliver reliable EOR solutions. Before listing differentiators, it is important to recognize that EOR success depends on trust, accuracy, and responsiveness.
Key Differentiators of Eicra BD:
- Deep expertise in Bangladesh labor laws
- Strong global partner network
- Transparent and predictable pricing
- Dedicated client support team
Compliance-first service delivery
Why Employer of Record Is a Strategic Growth Enabler
Employer of Record (EOR) services have fundamentally transformed how businesses approach global hiring. By eliminating the need for local entity setup, reducing compliance risk, and accelerating market entry, EOR enables companies to focus on growth rather than administrative complexity.
At Eicra BD, we go beyond basic EOR administration. We act as a long-term compliance and workforce partner, supporting our clients throughout the entire employee lifecycle—from hiring and onboarding to payroll, compliance, and exit management. Our deep understanding of Bangladesh’s regulatory landscape, combined with global employment capabilities, allows businesses to expand confidently without legal uncertainty.
FAQs
An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of another company. The EOR manages employment contracts, payroll, taxes, statutory benefits, and labor law compliance, while the client company controls daily work, responsibilities, and performance management.
EOR services are ideal for foreign companies, startups, SMEs, and global enterprises hiring in Bangladesh. They are especially useful for businesses testing the market, hiring remote teams, managing short-term projects, or expanding without long-term legal commitments.
An EOR manages employment contracts, payroll processing, income tax withholding, social security contributions, statutory benefits, leave management, termination compliance, and reporting to labor and tax authorities, ensuring full regulatory compliance.
Yes. EOR services are widely used for hiring remote employees, developers, engineers, and support teams in Bangladesh. The EOR ensures compliant employment while the client manages remote work arrangements and performance.
An EOR becomes the legal employer and does not require a local entity. A PEO provides HR support under a co-employment model but requires the client to have a registered local entity. EOR is ideal for international expansion, while PEO suits domestic HR outsourcing.
Sorry, the comment form is closed at this time.