Entity Setup vs Employer of Record: Which is better for hiring overseas?

Once your company commits to recruiting and hiring remote workers overseas, you will face a decision on how to best hire the new employee. The hiring method selected will not affect the employee as much as it will your company, and depends on your overall global HR strategy.
Entity Setup vs Employer of Record: Which is better for hiring overseas?
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Is this your first time hiring employees abroad?  Do you have plans to hire employees in multiple countries?  Will you hire a locally managed team of remote employees?  The answers to these questions will guide your decision on the best hiring method for your company.

There are a number of ways to hire overseas employees, but the two that are used most frequently are incorporating an entity or using an employer of record.  This article will look at the advantages and disadvantages of each method.

Pros and Cons of Setting Up an Entity

The traditional way of hiring foreign employees (or expats) was to set up a branch or subsidiary in the host country and run payroll on your own.  Setting up an entity will require incorporation, registration and possibly meeting capitalization requirements.  There are pros and cons to this approach, that have to be weighed against other options.

Pros

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