As companies look beyond borders to find top talent, many turn to international employment services to simplify the process. Two of the most common options are Professional Employer Organizations (PEOs) and Employers of Record (EORs). Both can help you expand without opening local entities, but they operate very differently. Choosing the right model can impact your compliance, hiring speed and global payroll strategy. At Suna Solutions, we work with clients navigating complex workforce needs across multiple countries.
What Are International Employment Services?
International employment services allow businesses to hire and pay workers in foreign countries without establishing a legal entity. These services include payroll, tax compliance, onboarding, benefits and labor law guidance.
- A PEO operates in a co-employment model. Your company shares employer responsibilities with the PEO, but you must already have a legal entity in the country where the employee works.
- An EOR becomes the full legal employer on paper. The EOR handles employment contracts, payroll, taxes and compliance on your behalf, no entity required.
PEO vs EOR: Key Differences
The biggest difference between PEO vs EOR lies in legal employment responsibility. A PEO supports HR functions but requires your company to have a registered business in the country. An EOR takes on all local employment responsibilities and allows you to hire globally without an entity.
This distinction is especially important for companies testing new markets or managing short-term international projects.
Pros of Using a PEO
- Streamlined HR administration: A PEO manages payroll, benefits and risk mitigation, freeing up internal resources.
- Access to better benefits: PEOs often offer competitive insurance plans by pooling multiple clients.
- Cost savings for domestic scaling: When operating in-country with your own entity, a PEO can reduce HR overhead.
Cons of Using a PEO
- Legal entity required: You can’t use a PEO unless you’ve already established a business in that country.
- Shared liability: You’re still legally responsible for compliance errors or employee misclassification.
- Limited global reach: PEOs are not a great fit for rapid international expansion.
Pros of Using an EOR
- No entity required: An EOR allows you to legally hire in countries where your company isn’t registered.
- Full compliance support: EORs handle contracts, benefits, taxes and local labor law adherence.
- Faster hiring: You can onboard talent in new countries within days rather than months.
Cons of Using an EOR
- Higher service fees: EORs charge per employee or as a percentage of payroll, which may be costly at scale.
- Less policy customization: Some internal policies may need to align with the EOR’s systems and procedures.
- Temporary solution: Companies planning long-term operations may eventually need to establish an entity and transition away from the EOR model.
Which Model Is Right for You?
Use a PEO if:
- You have an entity in the country
- You plan to stay in-market long-term
- You want to scale HR operations but retain legal responsibility
Use an EOR if:
- You don’t have a local entity
- You want to test a new market before committing
- You need fast, low-risk hiring options
A 2024 Velocity Global report found companies using EORs reduced global onboarding times by 56% and cut legal risk exposure by 42%. Those gains dramatically improve efficiency and compliance confidence.
Why It Matters for Global Payroll
Both PEOs and EORs offer global payroll support, but how they handle it differs. With a PEO, your company may still need to manage certain tax filings and local payments. An EOR, however, provides a fully outsourced payroll model, handling everything from salary disbursement to statutory benefits and deductions. For businesses managing teams in multiple countries, having a single partner that provides international employment services and centralized payroll visibility can reduce administrative burden and improve accuracy.
How Suna Solutions Supports International Hiring
Suna Solutions offers flexible support for companies looking to grow their global teams. We help organizations navigate PEO and EOR options based on your unique goals, timelines and budget. Whether you’re entering a new region or scaling in an existing market, our international employment services can help you stay compliant, move faster and stay focused on what matters most, your people. Our solutions also include workforce management, talent curation and contract staffing, making us a partner you can rely on at every stage of growth.