GTM Glossary · Market Entry
Employer of Record (EOR)
A third party that legally employs your staff in a country where you have no entity, while you direct their day-to-day work.
[01]What It Means
The EOR runs payroll, contracts, social contributions, and local employment compliance under its own registration. You keep management of the person and the commercial relationship. It is the fastest compliant way to place a first seller or engineer in a European market.
[02]Why It Matters
It removes months from an entry timeline and keeps the validation phase reversible. For a first commercial hire in DACH or France, an EOR usually beats incorporation, because it defers fixed cost until the motion is proven.
[03]Where It Goes Wrong
Assuming an EOR removes permanent-establishment risk when the person signs contracts locally.Long-term EOR use at a cost per head above running an entity.Weak IP-assignment clauses in the EOR agreement, leaving ownership ambiguous.
[04]Related Terms