Are you building a remote tech team in Central Asia? With lower employment costs and a deep, untapped pool of talent, emerging markets like Central Asia are an incredible option for tech startups and tech companies that hope to grow their team — but how do you find and hire these talented individuals?
There are four primary methods to hire remote global workers — partnering with an Employer of Record, establishing your own local entity, hiring independent contractors, or using a global hiring platform. U.S.-based tech companies interested in long-term growth will find that working with an employer of record or creating a local entity are the most effective and viable options — but which is the right choice for your company?
Tech companies that are debating EOR vs. local entity in Central Asia and asking which model is the right choice may find the answers in this quick comparison created by Truss that outlines the pros and cons of each method.
Contact Truss today for more information on our global hiring platform!
READ MORE: The True ROI of Hiring Remote Global Talent
EOR vs. Local Entity: Find the Right Fit
The first step when you decide to hire remote talent is to determine how you will accomplish your goals and build your remote workforce. An employer of record is a third-party partner that makes it easier to hire remote employees and will take on the legal implications of hiring in a foreign country. A local entity is a subsidiary or branch office of your tech company in a foreign country that allows you to hire and conduct business in that country.
Here is a closer look at the differences between an employer of record and a local entity:
Key Differences Between an EOR and Local Entity
| Characteristic | Employer of Record | Local Entity |
|---|---|---|
| Speed to Hire | Fast. The time to hire with an employer of record is efficient and can take as little as 2 – 5 days or a few weeks. | Slow. It takes an average of 40 – 50 days to hire remote employees with a local entity set up. |
| Setup Time | Fast. Setup time for an EOR is 2 – 5 days on average with no registration required. | Slow. Setup time for a local entity requires months of paperwork, bank setups, and legal filings. |
| Setup Costs | Low. The setup costs for an EOR are low and typically only require monthly fees per employee. | High. A local entity requires significant setup costs with investment capital, registration, and legal fees. |
| Risk | Low. When you hire with an EOR, the employer of record takes on all legal liability and risk. | High. With a local entity, your company is liable for all legal issues and assumes all risk. |
| Control | Shared. Partnering with an EOR provides you with shared control over daily tasks, payroll, and more. | Full. When you own a local entity, you have complete control over all aspects of the business. |
| Scalability | High. An employer of record makes it easy to hire just a few employees in a country or build a whole workforce. | Medium. Establishing a local entity is best suited for larger companies that want to create a large (20+) workforce in a different country. |
| Administration | Minimal. The employer of record will handle the bulk of administrative tasks including payroll, taxes, and benefits. | High. With a local entity, your company is responsible for all administrative work and may require HR, legal, and accounting teams. |
| Intellectual Property | Medium. The ownership of intellectual property will vary based on the country and may require additional legal oversight. | Full. When you establish a local entity, you maintain full control and ownership over all intellectual property. |
When To Choose an Employer of Record in Central Asia
In many cases — partnering with an employer of record in Central Asia is the right choice for U.S.-based tech companies. It provides tech companies with a versatile platform to help businesses find the perfect fit and find it fast.
Here is a better look at when an employer of record is the right choice:
- Test a Hiring Market: Not sure if an emerging market is the right choice? An employer of record allows you to test a market, hire a few remote employees, and see if you can find the right fit without a major investment.
- Faster Hiring: Do you need to find and hire a developer fast to get your project across the finish line? An employer of record is a faster hiring option than other methods and can help you find the perfect candidate quickly.
- Smaller Workforce: Tech companies that want to build and hire a small remote workforce will find that working with an employer of record provider is ideal for managing 1–15 employees in a different country.
- Less Compliance Risk: When you partner with an EOR, your company receives the benefits of hiring talented workers around the world without the legal risk of tax and compliance errors.
- Return on Investment (ROI): Tech companies that partner with an EOR will find that it is a more cost-effective option up to a certain point. When you hire more than 20-30 employees via an employer of record, the monthly fees can become more costly than maintaining a local entity.
READ MORE: The Hidden Costs of Compliance and Why Tech Startups Need an EOR
Why Choose Truss as Your Employer of Record
Are you ready to build a remote workforce? You may have questions about how to accomplish that goal — and Truss has the answers.
When you compare an EOR vs. a local entity, you may ask which model is the right choice for your tech startup. Truss is the answer.
Truss has years of experience in Central Asia as an end-to-end global hiring solution, and an employer of record provider for tech companies. When you make the decision to build a remote team, Truss will put our knowledge and experience to work for you to help you find, recruit, hire, onboard, and manage remote employees in different parts of the world. With Truss as your employer of record, you can trust that you will remain compliant with local labor laws and continue to succeed.
Contact Truss today for more information on our global hiring solution!
