Employer of Record, freelance or subsidiary: which option for hiring internationally?

You are going to recruit abroad. First of all, you should know that you are not required to create a company in the country concerned. There are several options, and the most suitable one for your situation depends on the nature of your needs, the level of control you want to exercise over the person you recruit and the size of the local team you want to build. For a one-off assignment, the simplest option is to use a freelancer. When a permanent position requires you to integrate and manage an employee, turn to the Employer of Record (EOR), which allows you to hire someone without a local entity. Finally, when the team grows and reaches between 10 and 35 employees in the same country, creating a subsidiary becomes advantageous. But again, everything depends on local costs and the rates charged by the EOR.

For a one-off assignment, choose a freelancer

Working with a freelancer is based on a service contract. The professional works independently, without being integrated into the company as an employee. This option is suitable if you need to complete a project, meet a short-term need or temporarily call upon a rare skill that the company does not have internally. In other words, it allows you to temporarily strengthen your team.

However, your company cannot manage the freelancer like one of its employees. You can set objectives, deadlines and expected results, but you must ensure that you leave them genuine autonomy in organizing and carrying out their work.

As soon as you give them orders, control how they perform their assignment and can sanction their failures, your relationship is characterized by a relationship of subordination. You then expose yourself to having the service relationship reclassified as an employment contract. In this case, the law of the country in which the freelancer carries out their activity is decisive. The consequences can be significant. In France, the Cour de cassation stated, in a ruling dated May 6, 2026, that a service provider whose relationship is reclassified must be placed in the position they would have been in if they had been hired under a permanent employment contract (CDI) from the beginning of the collaboration.

To hire an employee without creating an entity, use an Employer of Record

The Employer of Record, or EOR, allows a company to hire an employee in a country where it does not have a subsidiary. This option therefore allows you to start recruiting without waiting to create a local structure. The provider is the legal employer of the newly hired employee. It handles the employment contract, payroll and social contributions. It also fulfills the administrative obligations related to the hire. The client company retains management of the position: it defines the duties and supervises the employee’s activity on a daily basis. In other words, the EOR handles legal and administrative matters, while the company is responsible for integrating the employee into its teams and managing their work.

The option obviously has its limitations. The main one is the uncertainty surrounding the quality of the provider’s local network. Some EORs have their own entities in the countries they cover, while others rely on local partners. In the latter case, service quality, processing times and communication speed vary from one country to another. This is why it is useful to compare providers. In this regard, this English-language comparison of Deel and Multiplier, which presents a comparison of Deel and Multiplier, the two leading providers in this field, will be of great help. It illustrates this difference precisely: Deel owns most of its legal entities, which speeds up hiring and strengthens compliance control, whereas Multiplier relies more heavily on local partners in certain regions, with service that varies more depending on the country. According to this comparison, Deel has a clear advantage in terms of compliance, user experience and payroll management. Multiplier, on the other hand, stands out for its often more affordable pricing, suitable for small teams with tight budgets.

For a long-term presence, create a subsidiary

Creating a subsidiary consists of establishing a local company that is legally separate from the parent company. The subsidiary directly hires employees in the country where it is established. This solution becomes necessary when you need a large local team or plan to develop a commercial activity there. A subsidiary gives you control over your recruitment.

The trade-off is heavy administrative management. You are required to comply with the country’s tax regulations, particularly the rules applicable to transactions between the parent company and the subsidiary. You must also maintain local accounting records and comply with the reporting obligations provided for by national legislation. In some countries outside the European Union, the presence of a resident director or shareholder is essential.

Freelance, EOR or subsidiary: the comparison at a glance

Each row compares the three solutions according to the same criterion: setup time, cost, level of control or legal risk. In practice, timelines, costs and requirements vary depending on the country and the provider.