Exploring business opportunities overseas opens up new horizons with access to new markets and a broader talent pool, all at a lower cost. However, businesses need to consider all the extra paperwork and responsibility that comes with this kind of expansion. Or… Hire an Employer of Record (EOR)! In 2022, the remote working continues to be a dominating trend across the globe in several industries. Since 2020, searches for remote work have increased by more than 500%. With more and more organizations transitioning to a remote-first culture, the future of work is evolving at a very rapid pace.

While this shift allows for greater flexibility and work/life balance, it adds complexity for both the employer and employee. In this article, we’ll guide you through understanding the concept of an EOR, what they are, how they work and if they’re right for you. You will also find out how our expert team can assist foreign people living in Malta and Maltese working with foreign businesses. Let’s dive in.

What is an employer of record?

An Employer of Record is a third-party global employment services provider. What can it assist you with? Well, this type of employment can help with employing people in other countries and taking care of responsibilities such as payroll, benefits, taxes, stock options, and compliance without getting involved in the day-to-day management of the employee. The EOR acts as a local ‘go-between’ for the employer and employee to ensure all regulatory requirements of immigration and employment are seamlessly met. While businesses focus on expanding their operations abroad, they can rely on an Employer of Record to help them hire employees in multiple countries.

Getting an Employer of Record

The EOR is the registered employer for the worker. The biggest responsibility is acting as the local employer on paper. In this way, an Employer of Record shields your business from liability and compliance risks by legally employing workers in another country on your behalf.  An Employer of Record typically performs critical tasks such as:

  • Arranging visa-related documents and work permits for the employee if necessary
  • Providing a registered entity for running a local, compliant payroll within that country
  • Ensuring compliance with local labour laws pertaining to local contracts and worker protections
  • Advising the client on best practices for an employee on and offboarding.
  • Acting as the interface between employee and government authorities
  • Managing payroll, tax deductions, social security contributions, and benefits administration

When to use an employer of record?

If your company is looking to venture abroad without establishing a physical entity in that region, or if you are hiring employees based in Malta and they would like to pay taxes in Malta,  then you need to look into hiring an EOR. This solution allows your business to be efficient and cost-effective in your new project.  As outlined throughout this article, an EOR vendor takes on the responsibility of the more tedious and laborious tasks on behalf of your company. Appearing as the legal employer to manage local payroll, employment tasks, and immigration clears your time, budget, and resources to focus on core business objectives.

What is an employer of record?

5 Main benefits of using employer of record services

Expanding your workforce can be challenging and time-consuming. Hiring abroad often presents several hurdles, such as dealing with different tax residencies. There are key benefits to partnering with an EOR vendor. It’s important to reiterate that the business where the employee works still retains control in the daily business operations and workplace safety. Furthermore, the Employer of Record assumes liability for employment issues, including payroll management compliance and tax laws. 

Registering a business entity abroad comes with a host of challenges. The high level of bureaucracy and waiting time for approval could take several months. Since an Employer of Record is an officially registered company, a vendor such as Payroll Malta can step in to hire and pay employees right away.
Each country has its own employment, payroll, and work permit requirements. The team at Payroll Malta takes on the arduous and costly work to ensure that all banking, insurance, tax, human resources, facilities, and contract requirements are met.
Probably one of the biggest outsourcing benefits of an EOR is that it saves your business time. There is always the option to take the ‘DIY’ approach, but that requires committing time and resources that could be better used elsewhere. Payroll Malta has already set up an entity in Malta in order to hire, onboard, manage salaries, taxes, and benefits, and legally comply with local laws on another company’s behalf. 
The EOR takes on the burden of complicated HR tasks involved in the hiring and onboarding of new staff. Since Payroll Malta would be present on official documentation, a business owner doesn’t need to be preoccupied with tax documentation negligence, non-compliance with local labour laws and common payroll mistakes.
A lot of costs are associated with setting up a global office. Hiring an EOR vendor, such as Payroll Malta, bypasses a lot of these costs, with added flexibility. Collaborating with Payroll Malta allows you to use the saved costs to explore new markets instead of building teams abroad from scratch. 

What to look for in employer of record services in Malta

When considering using an EOR in Malta, there are a number of factors you may want to consider to ensure you are picking the right solution for your business. Here is what to look out for in your future Employer of Record here in Malta:

It is key that the EOR has years of experience managing businesses in the desired region. Payroll Malta has a comprehensive understanding of the Maltese labour market, laws, and regulations through 10 years of experience.
The EOR will represent your business in the country, and you’ll want to ensure that the reputation that precedes them is a positive one. Your representative will need to assess the kind of client base, activity in the market, and compliance records. Our testimonials can be found here.
The kind of technology an EOR uses is reflective of its ability to scale. Pay attention to whether they use large-scale tools to handle documentation and integrate it into your own in-house tools and tech stack. We use the software Talexio, an award-winning all-inclusive HR platform that has the potential to scale up with our clients.
It’s ideal to choose a vendor that can offer a broad benefits pack. This should include free training and onboarding, vacation days and sick day policies.  Our team specializes in Maltese employment law. We offer 10 years of expertise gained from working in the local industry.    
The EOR you choose should be easy to collaborate and align with. To ensure cooperation and transparency, a designated consultant should manage communication between the vendor and client. At Payroll Malta, we commit to a 24-48hr turnaround time to issue contracts to our EOR clients.
The Employer of Record should have well-defined protocols for protecting a business's intellectual property. Investigate how the vendor will protect sensitive data and related procedures. The Talexio interface, integrated into our processes, ensures accuracy and security for employee databases.
What is an employer of record?



How Payroll Malta seamlessly helps foreign employees and local contractors in 5 steps

Payroll Malta is Malta’s leading payroll specialist, committed to providing companies with compliant payroll services, with 10 years of experience. Our expert team has the resources to assist foreign people living in Malta and Maltese employees working for foreign businesses. 

  1. We ensure your company is compliant - we take care of the hiring, contracts, employee benefits, and payroll.
  2. We seamlessly onboard new hires - our team handles the administrative tasks and paperwork.
  3. We offer expert support throughout the process - our payroll experts are available to answer any questions and provide support at every point.
  4. We enable quick market entry - by using our entity as a vehicle you save time and resources. 
  5. We provide an affordable solution - we offer cost-effective rates with no hidden costs.

Whether you are a small business owner looking for new horizons or a recruiter seeking remote candidates, you must ensure that all employment issues are handled correctly and legally. Luckily for you, Payroll Malta has the expertise, infrastructure, and experience to give you the peace of mind you need.  Get in touch with one of our experts today and learn more about how we can help. 

FAQ: Employer of record companies

In short, any industry could potentially benefit from EOR solutions. This service started out in the US for administrative and temporary staff. But with the evolution of remote work, it is now a popular business solution across all industries.
When you entrust an EOR to manage payroll, you provide the funds and the EOR handles the distribution of salaries, together with tax deductions, social security, and retirement contributions. All within local regulation and compliance laws. 
Payroll Malta is an entity established in Malta, this means we are set up to legally hire your selected employees within days, and appear as the legal employers on the documentation required. Our HR contracts are fully compliant with Maltese labour laws.
Yes, it is legal to employ staff in other countries through an EOR. Only EORs that own a local entity can guarantee their region's maximum level of compliance.