Employer of Record (EOR): How to Hire Internationally Without Opening an Office

Your company has found the ideal candidate, but they live in Spain. A country where you do not have a legal entity to hire them. So, what options do you have? You can do it as it has been traditionally done, by opening a legal entity, with the time and costs that this process entails, or you can use an Employer of Record (EOR) service, which has a better understanding of the market characteristics and can advise you on employee management under legislation that is completely unfamiliar to you.

What is an Employer of Record?

An Employer of Record is a company that helps you manage employees in a country where you do not have a local office. We manage everything so you can focus on what truly matters: your expansion.
An EOR partner is responsible for:

• Local legal consulting: We help you ensure your contracts comply with Spanish legislation.
• Full management: We assist you with payroll management, Social Security, administrative procedures, and more.
• Market expertise: We advise you on culture, negotiation practices, and all those local peculiarities you may be unfamiliar with.
• Operational peace of mind: We help you focus on what matters most – your expansion and growth.

Moreover, at New Tandem we bring over 25 years of experience understanding how the market works. We are the strategic alliance with the deepest knowledge of the country and the longest track record of operations within it.

EOR vs. Opening a Subsidiary: The Real Difference

When Does It Make Sense to Use an EOR?

Not every situation requires it, but there are scenarios where it makes a clear difference:

• Testing a new market before deciding whether it’s worth opening your own office
• Hiring remote talent living in another country without losing them due to administrative complications
• Time-limited projects abroad where it’s not worth setting up a permanent structure
• Rapid expansion when speed matters more than total control over legal management.
• Acquisitions or mergers where there are employees in countries where the acquiring company does not yet operate.

You can learn more about when you should partner with an EOR and the advantages it offers in the following link

The Risks of Getting It Wrong

Hiring an economically dependent self-employed person—that is, treating someone in another country as self-employed when they actually function as an employee—is one of the most common and costliest mistakes. Many countries have tightened enforcement of false self-employment arrangements, and sanctions can include:

• Retroactive fines for unpaid contributions
• Claims from the worker themselves for unrecognized labor rights
• Legal blocks on operating in that country in the future

An EOR eliminates that risk entirely, because the contract complies with local labor regulations from day one.

📊 Data: According to the Union of Professionals and Self-Employed Workers (UPTA), by the end of 2024 Spain had over 350,000 false self-employed workers, costing Social Security approximately €592 million.

How to Choose a Good EOR Provider

Not all EOR providers offer the same level of guarantee. Before deciding, it’s worth asking:

1. Do they have their own legal entity in the country or do they subcontract to a third party? The second option adds a layer of risk and less control over service quality.
2. What country coverage do they really offer?, not just on paper.
3. How do you manage medical leave, dismissals, and severance payments? According to local legislation, which varies significantly from one country to another.
4. What transparency is there in costs? Some providers hide margins in exchange rates or unclear commissions.
5. What level of human support do you offer? More than just an automated solution.

he Advantage of Working with a Partner like New Tandem

International recruitment is not just a legal procedure – it’s a strategic decision that impacts your expansion speed and risk exposure. A good EOR service is not simply “paperwork handled”; it’s having someone who understands local employment law better than you do and who responds when questions or unexpected issues arise. Understanding the market where you operate, its legal, cultural, and business negotiation particularities, makes the difference between smooth recruitment and a process fraught with friction and unforeseen complications.

At New Tandem we help companies hire talent in other countries without needing to open an office, managing comprehensively legal compliance, payroll, and the employee’s employment relationship, so that your company can focus on what really matters: growing the project. With over 25 years of experience, at New Tandem we know the Spanish labor market inside and out, which allows us to anticipate risks and resolve swiftly any situation that arises during the employment relationship.

¿Estás valorando contratar talento en España sin abrir una entidad legal propia?

Consult our EOR Services at New Tandem and let’s discuss your specific case.