Hiring employees in another country without forming a local entity is one of the fastest ways to scale internationally — and an Employer-of-Record (EOR) like Deel makes that possible by legally employing the worker on your behalf while you manage day-to-day work. This guide walks you through the whole process: when to use an EOR, how to set up an EOR hire in Deel, cost and timeline expectations, compliance traps to avoid, and how to transition to your own entity later if you decide to. I’ll keep it practical and checklist-ready so you can follow it action by action.
Quick snapshot: why use Deel’s EOR
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Speed to hire: Hire in countries where you don’t have a legal entity and get people working quickly.
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Compliance offload: Deel handles local payroll, tax withholding, mandatory benefits, payslips and statutory filings.
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Wide coverage: Deel provides EOR services across a large number of countries globally
When to pick EOR vs building your own entity
Use an EOR when you need to:
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Hire quickly to test a market or onboard a single key hire.
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Avoid the months and cost of entity setup and local administration.
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Keep legal risk low while you learn local employment law.
Consider setting up your own entity when:
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You plan to hire many employees in that country long-term.
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You need greater control over compensation structures, benefits provisioning, or want to reduce per-employee fees over time. Deel offers guidance on when it’s time to transition to an owned entity.
Step-by-step: setting up an EOR hire in Deel
Step 1 — Get internal approvals & estimate the all-in cost
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Confirm headcount, grade, location, and whether the role must be an employee (not contractor) under local law.
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Estimate the total on-cost: salary + employer payroll taxes + mandatory benefits + Deel’s EOR fee. Deel publishes pricing starting figures for EOR services, which you should use for budgeting.
Checklist
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Finance sign-off on OPEX vs. entity capex
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Budget line for monthly EOR fee per employee
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Timeline for hire and payroll alignment
Step 2 — Choose the right engagement model in Deel
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In the Deel dashboard choose “Add person” → Employee → EOR Employee to designate Deel as the legal employer for that hire. Deel’s help articles walk through this exact flow and the fields you’ll need to complete.
What you’ll need to enter
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Personal info (name, email, country)
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Job details (title, hours, manager, start date)
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Compensation (local currency, pay schedule)
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Benefits selection and any company-paid allowances
Step 3 — Draft and send the local contract
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Use Deel’s locally-compliant EOR contract templates as the base — they’re pre-localized for legal requirements in the hire’s jurisdiction. Customize only the company-specific clauses (bonuses, equity, IP, role specifics).
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Attach your job description, probation terms, and any contingency conditions (e.g., background checks).
Step 4 — Candidate signs, uploads documents, Deel verifies
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The candidate e-signs the contract in the Deel flow and uploads required ID, tax IDs, and bank details. Deel captures acceptance timestamps and stores documents securely.
Checklist
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Contract signed
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ID and tax documentation uploaded
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Local bank details provided (to avoid payroll delay)
Step 5 — Benefits, tax, and payroll setup
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Deel configures payroll withholding, statutory contributions and enrolls the employee in mandatory benefits where required. Confirm with your finance team the payroll cycle, gross-to-net calculations, and funding method (e.g., you fund a centralized account or Deel pays on your behalf and invoices).
Key questions to align with finance
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When will the first payroll run relative to the hire date? (pro-rata pay for mid-cycle starts)
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In which currency will the employee be paid?
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Who covers employer contributions and optional benefits?
Step 6 — IT, security, and first-day logistics (your side)
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Ship equipment if needed, set up logins/SSO, and schedule orientation sessions. Deel handles paperwork and payroll, but you must integrate the hire into your team and systems.
Step 7 — Ongoing management & record keeping
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Use Deel’s dashboard to access payslips and compliance records. Track probation reviews, performance goals, and confirm recurring payroll runs.
Timeline expectations
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Offer → signed contract: typically 1–7 days depending on candidate responsiveness.
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Signed → first payroll: depends on local payroll cutoffs — could be same month (pro-rata) or next payroll cycle. Confirm cutoff dates in Deel when you set up the hire.
Cost factors to watch
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Local mandatory benefits and employer taxes (vary widely)
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Optional private benefits you choose to provide (health, pension top-ups)
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One-time setup fees for specific countries with complex regulation
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Currency conversion and payment transfer costs
Compliance and legal pitfalls (and how to avoid them)
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Misclassification risk: Don’t classify workers as contractors if the role implies employee-style control; local law will govern and fines apply. Use Deel’s guidance on classification.
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Incomplete documentation: Missing tax IDs or bank details delays payroll — collect docs at offer stage.
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Local mandatory benefits: Some benefits are non-negotiable; ensure these are budgeted and enabled in Deel’s configuration.
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Visa & immigration: If the hire needs a work permit, start early — immigration timelines are country-specific and may be outside Deel’s standard EOR onboarding window. Deel offers immigration support in several markets but timelines vary.
When and how to transition from EOR to your own entity
If you plan to scale in a country, forming a legal entity may become more cost-effective. Steps to transition:
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Plan ahead: Decide thresholds (e.g., number of hires, three years of operation) that trigger entity setup analysis.
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Engage legal & payroll partners: Deel provides services and guides to set up a local entity and can support transition planning.
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Synchronize payroll & contracts: Coordinate the final payroll as EOR and the first payroll run as your entity to avoid gaps. Ensure employment contracts and statutory registrations are transferred in compliance with local law.
Practical onboarding checklist for an EOR hire via Deel
Before offer
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Confirm EOR is allowed in target country
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Finance approves budget for salary + on-costs
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Determine pay currency and payroll schedule
At offer
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Create EOR Employee in Deel dashboard.
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Send offer and explain Deel’s role
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Request ID, tax ID, and bank details
After acceptance
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Confirm payroll cutoffs and funding
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Enroll employee in mandatory benefits
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Provision IT and schedule orientation
First 90 days
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Conduct 30/60/90 reviews and probation check
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Monitor payslips and compliance docs in Deel
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Decide on entity vs EOR longer term
Final thoughts
Deel’s EOR product is designed to remove the heavy compliance and payroll burden of international hiring so you can focus on people and growth. It’s fast, scalable, and—when used with clear internal processes—reduces legal risk. But it isn’t “set it and forget it”: align finance, legal, and hiring managers on budget, payroll timing, and local benefits from day zero, and keep a clear migration plan if you expect to build a long-term presence in a country.
Affiliate disclosure: Some links in this article to Deel are affiliate links. If you sign up through those links, we may earn a small commission at no extra cost to you, learn more in our ftc disclosure here.
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