What This Area Covers

When entering a foreign market, making an informed decision about how to employ local talent is essential. This includes:

Selecting the right employment model– direct employment through a local legal entity, employment via an external provider, or using a specialized service such as an Employer of Record (EOR).
Tailored employment contracts– aligned with local labor laws, covering terms of employment, termination, and statutory contributions.
Collective agreements– where worker representation or structured labor frameworks are required or customary.
Compliance with local regulations– including employer obligations, payroll, and employee benefits.
Weighing legal, budgetary, and operational considerations– to determine the most suitable model.

Why It Matters in Global Expansion – and the Business Impact

Your employment model directly impacts costs, legal liability, time to market, management flexibility, and employee relations. It’s not merely an operational choice – it’s a strategic decision. For example:

Direct employmentrequires setting up a legal entity in the foreign market, which involves time, regulation, and costs.
Without a local entity, employing staff directly may be illegal and could expose your company to violations of labor and tax laws.
To avoid such exposure, companies can use an Employer of Record (EOR)

What Is an EOR – and Why Use One?

An EOR is a service where a local (or international) company serves as the legal employer of your staff, in full compliance with local law. It handles registration, payroll, contributions, and reporting, while your company maintains day-to-day professional oversight.

An EOR is especially useful when:

No local legal entity is yet established.
A quick, flexible entry into the market is needed.
Only a small number of employees are being hired.
Direct employment poses regulatory risks.

With an EOR, you can legally recruit and onboard employees without exposing your company to legal risk or needing to immediately establish a local entity.

Challenges & Opportunities

Challenges:

Limited awareness of the regulatory implications of different employment models.
Misunderstandings about legal liability – even in indirect models, hidden responsibilities may still apply.
Legal restrictions on using external parties – including duration of employment and related conditions.

Opportunities:

Strategic use of EOR enables immediate hiring of local staff with no delays.
Aligning the employment structure with your operational and financial needs allows for a lean, compliant, and efficient setup.
Proactive planning of the employment model reduces legal and operational risk.

How Go Global Israel Helps

Go Global Israel supports companies in selecting the most appropriate employment model through professional scoping and referrals to trusted experts, including:

Leading EOR providers– in target countries, matched by industry and role type.
Local law firms– for reviewing contracts, legal liability, and regulatory compliance.
Global employment management firms– offering payroll, reporting, and operational employment services.
Operational and strategic advisory– on choosing the optimal model: direct, indirect, or hybrid.

Each referral is made following a detailed assessment that includes the type of activity, target market, budget, and timeline – ensuring a legal, effective, and flexible solution.

Global Employment Models