No legal entity needed

Alcor’s Employer of Record solution allows you to expand to new markets without establishing a local legal presence and dealing with the bureaucratic hassle of complying with local laws and regulations. Each employment aspect will be under the control of your EOR provider while you can focus on your business growth.

Compliant expansion

Each offshoring location comes with its own legal intricacies that need to be managed and addressed for smooth business operations. This is what Alcor EOR covers. Labor laws, tax regulations, employment contracts or SLAs, NDAs, IP rights protection—you get a 100% legal shield from lawyers with IT Law qualifications and experience in Mexico, Colombia, Poland, Romania, and Ukraine.

Accurate & timely HR payroll

Managing payroll abroad requires the assistance of experts in local payroll processing rules, laws, regulations, tax systems, etc. With Alcor EOR, you can leave these worries behind. We ensure error-free and multi-currency payroll processing and timely paychecks for your software developers.

Cost-efficiency

Unlike global EOR providers, Alcor’s EOR solution eliminates the need for cooperating with multiple vendors when expanding abroad. Manage everything in one place with flexible and transparent pricing—pay for only those services that you use. Plus, with our EOR solution, you’ll avoid hefty buyout fees that occur in outsourcing, as developers belong to you from day one.

Dedicated account manager

We assign one key account manager to assist you through the entire business expansion journey. From handling legal complexities to providing round-the-clock operational support, we ensure you stay shielded from any inconveniences. Our experts are very responsive, fostering clear communication and meeting your needs with great attention to detail so that your expansion is seamless and smooth.

Some tech companies planning to expand their teams abroad choose to establish a legal entity to employ new developers with full compliance. The establishment of the entity varies from country to country based on the local laws of business incorporation. Generally, you would have to do this:

• type of entity choosing (subsidiary, branch office, representative office),
• name reservation,
• notary inscription,
• incorporation before authorities,
• registration with tax authorities,
• bank account opening,
• fully operating bank account,
• registration with Social Security,
• other mandatory registrations.

This process might take several months, depending on the country. Looks like an arduous and time-consuming process, doesn’t it? What’s more, this endeavor is super costly and risky. For compliant business incorporation, you would have to spend tens of thousands of dollars just to pay all the fees (legal, professional, registration, insurance, etc.). If you fail to comply with local laws and practices, you may face hefty fines or even legal action against your company.

The EOR model, on the other hand, presupposes your developers are employed through a readily established legal entity of your provider in the location of your expansion. It’s an easier, safer, and more cost-effective option that allows tech businesses to enter new markets hassle-free and scale their development teams quickly.

A Professional Employer Organization (PEO) is a third-party company that offers a comprehensive HR solution for small and medium-sized businesses to focus on core operations. The most common PEO services include HR administration, payroll processing, tax filing, and employee benefits management.

Unlike EOR, the PEO partnership is based on the co-employment agreement, where the client-company and PEO provider share employer responsibilities and legal liabilities.

Another distinction between PEO vs EOR companies is the need for a legal entity abroad. While an EOR company employs developers via their legal entity, with a PEO vendor, you’ll have to open your own. This translates into extra time and expenses to study the laws and regulations of the country of expansion for compliant business incorporation. For this reason, most PEO companies provide their services locally, which is not an option for tech businesses seeking to expand abroad.

However, businesses, especially medium and large tech companies, aiming for aggressive team scaling can benefit from PEO. Why? Because building a development team in one location with aligned time zones and cultural proximity fosters smoother team cooperation and accelerates product development than dispersing developers worldwide.

One more point for consideration is the payment structure. PEO’s costs can vary more widely based on the range of services used, with fees tied to the total payroll and administrative functions. EOR’s costs, on the other hand, are often more predictable, with flat fees per employee and percentage-based charges related to payroll.

A staffing agency is a company that assists tech businesses in hiring software developers, covering the entire talent acquisition process—from candidate sourcing and interviewing to offer management and onboarding.

The main difference between an EOR provider and a staffing agency lies in the scope of services. While the former doesn’t provide tech recruitment, the latter doesn’t cover payroll processing, tax management, and legal compliance. In addition, staffing agencies don’t engage in the actual employment of developers since they don’t have a legal presence abroad.

If you don’t have an internal recruitment team or you need to quickly bridge the skill gaps, then opting for a staffing agency is your best bet. But if you are able to manage hiring on your own and need help with compliant employment and administrative assistance, EOR is the way to go.

One more aspect that differentiates a staffing agency from an EOR company is the pricing model. Staffing agencies charge a percentage fee from an annual developer’s salary. It can vary depending on the level of the position, its complexity, and the country where you want to hire tech talents. At the same time, most EOR providers have a fixed fee per one contractor or employee per month.

Expanding into new markets

Companies that want to test the waters of new tech markets can find it overwhelming to navigate the maze of local labor laws, regulations, and admin complexities. Just setting up your own entity requires a lot of time to manage business incorporation, employment and labor laws, taxation and social contributions, allocating hefty upfront investments. Opening a legal entity is just a fraction of the things you need to do to expand abroad.

Here, the international Employer of Record services come in handy. Your trusted provider will remove all the roadblocks of business incorporation with their own legal presence in multiple locations, saving you precious time and money. They will also act as your legal shield, ensuring complete compliance with local laws and providing comprehensive in-country navigation. Plus, an international EOR company can assist you with hiring local top talent, filling key roles fast without the burden of back-office operations.

Switching from tech outsourcing

Tech companies that have been burnt by outsourcing—hidden costs, buyouts, high talent turnover, and IP protection headaches—know that building their own development team is the best option. But how can they hire tech talent compliantly?

EOR services solve this issue along with payroll, legal compliance, taxes, HR, and benefits management. If you cooperate with a local EOR provider like Alcor, you’ll get 1-2 tier higher talent for the same budget as with outsourcing and benefit from the absence of buyout fees. Plus, you can enjoy full IP protection and back-office support.

Choosing another EOR provider

Generic EOR solutions often fall short for tech companies expanding abroad. Global EOR providers typically lack market-specific and tech industry expertise, leaving critical gaps, especially in tech recruitment and operational functions. For this reason, tech companies are forced to juggle multiple vendors, leading to overspending and potential data risks.

Instead, a specialized EOR solution like the one provided by Alcor offers a tailored approach devised specifically for tech product companies. Our legal team ensures full compliance and mitigates risks tied to social security and tax obligations. Our 40 tech recruiters fill senior, lead, and C-level tech roles in 2-6 weeks, building you a team of elite developers in Latin America or Eastern Europe. Plus, you can manage all the operational hurdles in one place with our dedicated account manager at your service.

• Tech specialization: Go with an EOR provider who specializes in hiring software developers and managing compliance for tech product companies in the location of your expansion.
• Legal entity availability: Before opting for any Employer of Record company, check if they have a legal presence in the country of your expansion.
• Compliance shield. Check if your ideal EOR partner has a solid legal team to keep your business fully compliant and risk-free abroad. They should be able to mitigate risks related to worker misclassification, social security, and tax obligations while providing GDPR and CCPA solutions.
• Transparent pricing model: Make sure your EOR partner provides clear invoices that outline what you’re paying for, with no hidden fees, buyout costs, and additional charges. Typically, EOR providers work on a flat fee per employee and a percentage-based model.
• Proven track record & client reviews: Solid proof of the EOR provider’s expertise and performance is the availability of case studies. They demonstrate the vendor’s capability to handle projects like yours. Client reviews on independent platforms are another testament to the provider’s professionalism and reliability.
• Account manager support: It’s essential for you, as a client, to get on-spot support with any arising issue. Thus, make sure your remote EOR provider offers dedicated account managers to assist you 24/7.

There are dozens of international EOR companies that provide services in 100+ countries with appealing offers. But what most of those EOR providers lack is tech specialization. You would probably agree that eating sushi at an authentic omakase restaurant is worlds apart from grabbing it at a local supermarket. The same goes for hiring developers. A global EOR provider naturally lacks the depth of knowledge concerning the tech talent’s employment, like choosing the beneficial type of contract, offering appealing benefits, or consulting on tech-related tax incentives and business perks.

Another concern is the price. Most EOR providers charge a fixed fee of about $599 per employee monthly, with extra costs for compliance, HR, equity compensation, visa, and work permit management. On top of all those costs, you need to also add a deposit fund and tech recruitment expenses, as traditional EOR platforms don’t cover this service, as well as operational expenses that may arise during your expansion.

Switching the EOR provider is not always an uphill battle. Alcor offers comprehensive assistance on your transition, including employee data transfer, cost estimation, operational handover, legal settlement, etc.

Why limit yourself to EOR services when there is Alcor’s turnkey solution specifically devised for tech companies like yours? Tech recruitment, EOR, and operational support—all as a part of a software R&D center solution.

How does it work? It all starts with you sharing with us your preferred locations for expansion and staffing needs. Next, we’ll jump on a kick-off call to guide you on nearshoring/offshoring options. After we’ve discussed your scaling needs and go-to locations, we’ll provide you with insightful tech talent market intelligence and salary benchmarking to help you make the best choice.

Once we’ve negotiated the best cooperation terms and signed the agreement, Alcor’s full-cycle tech recruitment service comes into play. Our team of 40 experienced tech recruiters handles everything from EVP creation and applicant sourcing to prescreening, job interviews, and offer preparation. With our hiring services, you’ll:

• be presented with the best candidates—our clients approve 80%;
• get Engineering Manager support to assess candidates’ tech skills;
• enjoy a senior tech vacancy closing every 2-6 weeks, several at a time;
• stop wasting your time on low-quality hires—98.6% pass probation;
• retain 90% of hired talent for 2.5+ years.

When the development team is assembled, Alcor takes care of Employer of Record operations. Our EOR for tech handles developers’ employment, onboarding, legal navigation, IP protection, payroll, and benefits administration. All of this is backed by our dedicated account managers to make your tech expansion a hassle-free experience.

And the cherry on top? Alcor’s got you covered with legal entities in key LATAM and EE locations—no need to set up your own!

In case you need operational support, Alcor has your back! We can find and lease a perfect office for your software engineers, buy necessary equipment, set up IT infrastructure, provide insurance, and carry out an employer branding campaign.