Expanding beyond borders: How UK companies can seamlessly enter international markets

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Gino Peters

Written By:

Gino Peters

Reviewed By: Belinda E.

June 3, 2026 7:26 pm

Category Tag: News

The rise of remote work made international expansion much easier in recent years, but hiring abroad still comes with legal and administrative complexity, as every country has its own labour laws and payroll rules that must be followed. In addition, not many companies can open a new entity in every new market that they are expanding into. That is when the Employer of Record (EOR) solution comes in handy.

The EOR serves as the legal employer on paper, while the client company manages important activities related to the employees responsibilities and performance.

In this guide we will cover what an employer of record is, how it works in detail, how much it can cost and which business should consider an EOR solution.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third party service provider that legally employs a person on behalf of another company in the country where the employee officially resides. As an official employer the responsibilities of EOR include issuance of an employment contract, processing payroll and withholding taxes and necessary social security contributions, as well as preparation of offboarding documents or any documentation that need to be signed by the employer. In addition, EOR ensures the compliance with local labour laws and serves as a first point of contact for any legal disputes.

The client company that hired the employee through an EOR also has a list of responsibilities. As an Employer of Record does not have the visibility on operational activities behind the scenes a client company needs to provide direction and ensure proper team integration.

In simple terms, the EOR provider acts as a legal employer in the country of the employee’s residence, while the client company takes on day-to-day manager work.

Responsibility	Employer of Record (EOR)	Client Company
Employment contracts & any other official documentation
Payroll processing
Income tax & social security contributions
Compliance with local labour laws
Statutory benefits administration
Managing daily work and projects
Setting goals and performance expectations
Providing equipment and tools
Leading the employee’s team and workflow

Employer of Record solutions gain more and more popularity in the field of global expansion as they allow businesses to hire best candidates fast and easy while staying compliant with local employment regulations. More information about EOR service are available if you would like to understand more.

EOR Meaning

The term “EOR” is the abbreviation for Employer of Record.

Employer in this instance stands for the company that hires the employee and takes on duties related to it, such as onboarding and offboarding process, payment of wages and compliance with other legal requirements.

“Record” from the EOR perspective refers to official registration with government authorities. The name of the EOR provider is stated in all payslips and tax filings, and should also be listed by the employee in any documents where employer must be stated, such as mortgage or loan applications.

One might ask a question of why this legal structure exists. As it is not possible to provide an employment contract directly to a person that legally resides in another country, the business expanding abroad typically needs to establish a local entity. That involves legal registration, arrangement of local bank accounts and organisation of payroll structure, as well as compliance with local law.

EOR allows to simplify the global hiring and reduce administrative burden through their existing legal entity.

There are some other hiring models that can be confused with EOR.

EOR and PEO

Many sources online refer to EOR as “international PEO”, which may create confusion as these models have 1 important difference.

A Professional Employer Organisation (PEO) serves as a co-employer of a client company. In other words, a business must already have an established entity in the country. The hiring tasks are, therefore, shared between 2 companies, while legal liability stays only with the client company. In the EOR model all legal risks are being taken by the official employer. Read more about the difference between PEO and EOR here.

EOR and staffing agency

Staffing companies mainly provide assistance for short-term projects by providing temporary workers. If the client wishes to employ a person for a longer time, EOR approach must be chosen.

EOR and contractor model

Contractor agreements assume the involvement of independent workers rather than employees. This model is also often used for temporary, project-based assignments. It is important to remember that there is a big misclassification risk between a contractor and an employee in the company which can lead to potential legal issues. An EOR ensures that employment is legally compliant with local labour law.

How does an Employer of Record work?

While it may sound complicated at first, a process behind the employer of record model is relatively straightforward.

The operating company selects a candidate

The client company recruits the employee they want to hire in another country

The EOR becomes the legal employer & local employment contract is issued

The Employer of Record uses its local legal entity to prepare and issue an employment contract that complies with labour law of the country where the employee is based. Depending on case-by- case situation, the work visa might need to be secured beforehand. Our company provides immigration services, more details can be found here.

Payroll and taxes are managed

The EOR takes on recurring responsibilities related to a payroll and ensures correct processing of income tax, social security contributions etc

Benefits are administered

Paid leave, sick leave, pension contributions and any other statutory benefits are being managed by the EOR.

Ongoing compliance and HR support

It is the responsibility of the EOR to monitor changes in local labour law and ensure ongoing compliance.

Example:

Imagine a UK-based tech company found a perfect candidate in Germany for a position of a software developer.

Instead of going through the administrative burden of opening a legal entity in Germany, the company chooses to work with an Employer of Record. The EOR hires the developer under a German employment contract and manages payroll and taxes. At the same time the UK company welcomes the new employee in the team and manages the daily work of a developer.

What services does an Employer of Record provide?

The Employer of Record does more than just providing an employment contract to the employee. Typically a wide range of HR and compliance services is included in the EOR offer. For example, read about the services included in our EOR package here.

Employment and HR administration

Locally compliant employment contracts and support with other documents requested by authorities
Employee onboarding
Employee record management. For example, control over PTO

Payroll and tax management

Regular payroll processing
Tax withholding and reporting of social security contributions with authorities
Payslip generation and creation of annual wage tax certificates

Benefits administration

Management of statutory benefits
Pension contributions (where required)
Support with benefits such as maternity leave allowance, sick leave allowance etc

Compliance and risk management

Insuring compliance with local labour law
Management of onboarding and offboarding processes
Representation in difficult legal and court cases

Additional services:

Some EOR providers ( such as ThisWorks EOR Services) provide additional services such as:

Work permit and dependent visa support
Background checks
Relocation support
Value added services: support with housing, company car, banking, etc ( depending on the country).

This vast list of services allows businesses to manage international teams, while staying compliant and avoiding complex local employment administration.

Benefits of using an EOR service

There are multiple advantages the businesses can get from working with an Employer of Record provider.

Faster global hiring

Setting up a new entity can take up to several months. With an EOR the hiring process can take several days.

Reduced compliance risk

A trustworthy EOR provider ensures the compliance with all local regulations. As the labour law varies greatly between countries, having a knowledgeable party to rely on can make a big difference.

Lower expansion costs

Establishment of a new entity is not only a time-consuming process, but also costly. With EOR services these costs can be avoided.

Access to global talent

The location of a remote candidate is not a problem if the company uses Employer of Record services. In other words, the best candidate for specific business purposes can be chosen.

Scalable hiring model

EOR services are ideal for organisations that want to scale international hiring quickly. They are particularly useful in the following situations:

Remote-first teams and organisations
Companies testing new markets abroad
Startups expanding internationally

How to choose the right Employer of Record

Choosing between several EOR providers is important, as it influences not only compliance, but also employee experience for new hires and how your company is perceived on the job market.

Here are some important things to keep in mind when deciding on your EOR partner:

Geographic coverage

Make sure that EOR provider can cover the country where you want to expand globally. Read about our EOR coverage here.

Pricing transparency

Check that EOR provider does not have any hidden costs and the pricing is clearly outlined in your MSA.

Compliance expertise

A strong EOR provider should have a team of experienced local HR specialists who understands all in and outs of a national labour law.

In-house vs partner model

Some EOR providers rely on their third-party partners, while others manage employment directly through their own local entities.

Customer support

It is important to find a EOR partner that helps with any questions or concerns in a quick and professional manner. That can be crucial when dealing with employee offboarding or any legal disputes.

Warning signs

Understanding the importance of choosing a right party, your company should be cautious of providers that lack local expertise and cannot give clear answers to your labour law questions. In addition, companies with slow response times can prove to be unreliable in critical situations. Furthermore, providers with complex pricing models with many hidden fees can create a lack of cost transparency and result in unforeseen expenses.

By selecting a provider with strong expertise in local labour law and reliable support from dedicated teams, your company can ensure a smooth international growth. Learn why companies choose ThisWorks as their EOR partner.

How much does an employer of record cost

The vast coverage of services the employer of record provides makes many businesses ask how much an EOR costs.

Pricing models vary greatly on the provider and the country of coverage, but most EORs use one or more of the following structures.

Flat monthly fee per employee.

The EOR provider charges a fixed monthly fee for each employee they have on the payroll from the client.

Percentage of salary

While not being a popular approach, some EOR providers charge a percentage of the employee’s salary, typically ranging between 5%-15%.

Setup fees

Some providers charge onboarding or offboarding fee for each employee.

The fee that the business needs to pay to an EOR provider also depend on the location of a service. Local labour law complexity of some countries can influence the fee. In addition, some countries have specific statutory benefits and payroll administration requirements. Furthermore, employee headcount in the specific location can influence the fee.

EOR vs setting up a legal entity

To establish a new entity the organisations needs to go through legal and tax registration. In addition, accounting support and ongoing compliance costs such as the fees for local labour lawyers can make setting up a legal entity significantly more expensive.

An EOR allows companies to expand globally without these upfront investments.

EOR vs hiring contractors

Some businesses decide to hire international workers as contractors. However, this approach can often lead to a misclassification risk, which can cause legal and tax liabilities.

A professional EOR provider ensures that the new starters are compliantly onboarded under local employment regulations.

EOR FAQs

Is an EOR the same as a PEO?

No. PEO model assumes co-employment and requires the business to already have established local entity, while EOR employs new talents through its own entity only.

Can an EOR hire contractors?

While some EOR providers can support hiring contractors, it is important to remember that main function of EOR is the employment of full-time workers legally in a country. A risk of misclassification between EOR and contractor should be also considered carefully.

Is an employer of record legal?

Yes, when established and structured properly, Employer of Record entities are legal and widely used for international expansion by many companies.

When should you use an EOR?

The most common reason for using EOR include:

Hiring employees located in another countries remotely
Testing new markets before establishing an entity
Expanding internationally

Can you switch from EOR to your own entity?

Yes. Many companies initially hire through an EOR for the ease and speed of expansion and later transition employees to own legal entities upon their establishment. It is important to remember that some countries require specific procedure to be followed in such a scenario.

Get in touch with ThisWorks

Expanding your team globally does not need to be long and administratively complex.

With the use of Employer of Record the businesses can have access to the best talent from around the world while ensuring full compliance with local labour laws.

ThisWorks can support your global expansion with our compliant Employer of Record services.

Contact our team to find our how we can help your international team glow fast and compliantly!

Can you grow your business operations in the United Kingdom by 2025? The answer is yes! The Brexit controversy, alongside the entire EU issue, has not deterred the U.K. from developing new business opportunities for success. Various business sectors demonstrate rapid growth, which results in substantial profits for investors. Business expansion in banking and green power sectors has become simpler due to regulatory changes in the U.K.

The pace of technological development continues to increase as business procedures transform. To compete and seize new market opportunities organizations need to monitor current U.K. industry patterns leading up to 2025. Businesses demonstrate significant dedication to digital advancements and sustainable practices according to these market trends.

The following guide will show you the way to select an industry for expanding your business operations to the U.K.

Understanding the U.K. Market Landscape

Understanding the U.K. industry trends for 2025 allows companies to anticipate market shifts and capitalize on emerging opportunities. The guide presents essential information about investment locations and business rules and shows you ways to expand your business in the U.K. The major development areas, including high-tech locations and money understanding, enable businesses to secure substantial success. Companies can succeed in the U.K. business sector through strategic market monitoring and regulatory compliance.

Economic Overview

Post-Brexit, the U.K. stands among the wealthiest European nations, where new business activities continue to thrive. During the past few years, the nation established powerful economic relationships with non-EU countries that enabled businesses to distribute their goods worldwide. The financial sector has achieved remarkable success because of advancements in finance technology and the health sectors.

Post-Brexit Growth and Investment

Businesses in the U.K. receive multiple advantages through the country’s relaxed policies, which include tax breaks and financial incentives, together with simplified regulations. Post-Brexit business opportunities in the U.K. are emerging in new trade agreements. Organizations can expand their operations through investigation of these emerging markets. Companies seeking post-Brexit business opportunities in the U.K. should focus on sectors that are adapting to the evolving trade landscape. The government maintains its commitment to investing resources into technology development, together with research projects and environmental initiatives. The U.K.’s focus on innovation drives numerous international companies to invest there thus creating an attractive market for expansion.

Expanding Trade and Emerging Sectors

Companies operating in the U.K. have boosted their exports to markets outside the EU by searching for new business opportunities. Foreign investment has grown substantially because companies are establishing facilities to produce high-tech manufacturing goods and green energy systems, together with digital products. Companies that track market developments will gain advantages from the UK’s expanding trade paths and financial support initiatives during its economic stabilization.

Regulatory Environment

The requirements for firms in the U.K. are very clear and consistent. These regulations ensure people’s safety and fairness while assisting businesses in expanding. The government has, for example, relaxed regulations to promote economic expansion. There aren’t as many obstacles now, so businesses can operate more freely. This equilibrium helps the U.K. maintain its high standards and continue to win.

Financial Regulations and Compliance

Money has experienced major advancements among its most significant changes during the recent period. Under the Financial Conduct Authority (FCA) regulations, banks and money firms, and fintech companies must operate. This system requires companies to follow rules, yet supports them in developing fresh business ideas. The United Kingdom leads global economic standards because it supports corporate innovation through regulatory oversight. Financial services regulations in the U.K. are designed to maintain stability and encourage innovation. Legal operation of businesses depends on their adherence to these regulations. Navigating financial services regulations in the U.K. requires a thorough understanding of the FCA’s guidelines and compliance requirements. Any business operating in this sector must comply with current rules to prevent legal consequences.

Workforce and Data Protection Policies

The United Kingdom implemented new policies to streamline business recruitment of talented international workforce members. The new immigration legislation enables businesses to obtain visas quickly for recruiting skilled personnel. Through these measures, businesses can establish highly effective teams that comprise multiple skill sets. Data security regulations have undergone strict enforcement to defend both computer safety and privacy. Organizations need to follow these guidelines because customer trust depends on it and their property requires protection.

Priority Sectors for Investment

The United Kingdom government backs organizations that drive innovative practices and environmental sustainability. Businesses searching for successful strategies need to focus on developing new locations as their main strategy. Business success over extended periods depends on proper market analysis with strategy development based on identified critical factors. Knowing the best industries for investment in the U.K. can lead to significant profits. Investors need to study technological fields and renewable power industries. The U.K. offers a variety of promising sectors; identifying the best industries for investment in the U.K. is essential for maximizing returns.

A. Technology and Digital Innovation

Technology capabilities place the United Kingdom among the leading nations worldwide. Major Information Technology hubs located in Cambridge, Manchester, and London attract both startups and investors. Technology hubs in the U.K., such as London and Cambridge, attract global talent. The innovation and technological advancement activities take place as primary functions in these hubs. The concentration of talent and resources in technology hubs in the U.K. fosters a dynamic environment for startups and established companies alike. These cities function as worldwide leaders in digital payment systems and Artificial Intelligence development and computer security protection.

The government supports firm expansion through research and development funding, together with tax relief programs. The United Kingdom dedicates significant resources to developing future technologies, which include cloud computing and blockchain, and quantum computing. The country maintains a dominant position in digital currency markets because of its investments. Companies that wish to expand in the U.K. might do so by collaborating with research institutions and utilizing government initiatives. According to experts, digital new products will continue to be one of the main drivers of growth in 2025.

B. Financial Services

London maintains its position as an extremely costly metropolitan region among the world’s cities. Banks, together with fintech startups and money firms, can grow more easily because the government has changed financial regulations. Fintech entrepreneurs bring about industry transformation through their development of new payment systems and digital banking solutions, which streamline operations. Businesses can utilize a U.K.-established sandbox to safely conduct tests of innovative funding approaches. Global investors show increasing interest in financial innovations because of the environment that the U.K. provides. The United Kingdom remains at the forefront of digital money advancement while developing AI systems for risk assessment purposes. The opening of new funding opportunities will drive additional industry growth through increased company participation.

C. Healthcare and Life Sciences

The health sector of the United Kingdom is experiencing rapid expansion. The target market for business expansion in this region includes sectors of biotechnology combined with medical research, alongside digital healthcare applications. A partnership with the NHS proves essential for business expansion within the healthcare sector of the U.K. Knowing all applicable regulations constitutes a fundamental part of business expansion. Knowing how to expand a healthcare business in the U.K. involves navigating specific regulations and leveraging opportunities within the national health system.

The National Health Service (NHS) works with commercial enterprises to enhance health outcomes. The health improvement sector attracts investors who fund new medical technology and therapies. Company growth alongside personal benefits is promoted through this strategy. The U.K. health investment creates multiple prospects for medical research and AI-assisted discovery tools and wearable health technology devices. The experts predict that health professionals, together with technology companies, will expand their joint efforts across the healthcare sector during 2025. The location will achieve additional rapid expansion with this approach. The government’s triumphs, along with its support, have made health care investments emerge as one of the leading opportunities for investment.

D. Green Technology and Renewable Energy

The U.K. directs its efforts toward clean energy to fight against climate change. Companies conducting business in energy storage, together with wind farms and solar power operations, generate substantial profits. The government helps these companies grow through monetary support and tax reduction programs. The global zero-harm movement has transformed the UK into an outstanding market for renewable energy businesses to grow. The nation intends to reach zero negative outcomes by the year 2050.

The green energy installation will persistently grow as its location expands. Experts project that carbon grab technology and hydrogen electricity will experience substantial developments during the next five years. This location serves as an excellent investment destination for seeking innovative opportunities because it contains top U.K. IT companies dedicated to developing energy-saving solutions.

Regional Growth Opportunities

Different parts of the United Kingdom present substantial business prospects for investors. Manufacturing dominates in the Midlands, whereas Cambridge excels in technology, and London remains the center for money. The government established Enterprise Zones, which provide businesses with supplemental support, together with tax relief benefits. Business expansion becomes faster because technology hubs and business-friendly governmental regulations exist in selected regions.

Enterprise Zones

The United Kingdom provides different regions that grant firms exclusive advantages through tax exemptions and streamlined new initiative approval processes. These specific regions enable businesses to grow rapidly and establish additional employment opportunities. Many of these fields concentrate on green energy, technology, and money. Businesses that grow in the U.K. can access reduced costs through these designated zones, which also supply increased governmental help packages.

Technology Corridors

Several parts of the United Kingdom have developed into key locations for technological development. The development of new technology occurs through collaborative efforts between companies and specialists, and investors at both the Oxford-Cambridge Arc and the Northern Powerhouse regions. Companies that aim to engage in the upcoming major innovation allocate substantial funds for operating within these areas.

Final Thoughts

Following Brexit, the U.K.’s financial sector continues to expand, making it an extremely attractive location for businesses to expand. Businesses benefit from strong government support, tax breaks, and new trade routes in sectors including technology, finance, and green energy. Companies that prioritize digital innovations, eco-friendly products, and international partnerships will likely have the highest prospects for sustained success.

FAQ – Frequently Asked Questions

1. What are the key industries for business expansion in the U.K.?

Financial services, healthcare, advanced manufacturing, renewable energy, and technology are all expanding quickly and drawing in investors.

2. Why is the U.K. a preferred location for global businesses?

With a business-friendly climate, robust financial markets, world-class infrastructure, and global trade connections, the U.K. remains a top commercial center.

3. What challenges should businesses expect when expanding to the U.K.?

Businesses face post-Brexit trade complexity, tight compliance rules, high operating expenses in big cities, and competitive market circumstances.

4. How does the U.K. tax system impact foreign companies?

The U.K. provides attractive corporation tax rates with R&D incentives, but enterprises must comply with VAT, payroll taxes, and sector-specific rules.

5. What are enterprise zones, and how do they benefit businesses?

Enterprise zones give tax advantages, business rate discounts and relaxations, and infrastructural assistance, making them suitable for startups and growing firms.

6. How does the multicultural population impact business operations in the U.K.?

The U.K.âs diverse workforce increases innovation, extends global market reach, and promotes consumer engagement while necessitating inclusive recruiting and marketing methods.

7. Is the U.K. labor market facing shortages, and why?

Yes, important areas such as technology, healthcare, and engineering deal with talent shortages owing to increased demand, immigration laws, and changing employment demands.

8. What is an employer of record, and how can it help with U.K. expansion?

An Employer of Record (EOR) controls employment, payroll, and compliance, allowing international corporations to operate in the U.K. without forming a local company.

9. How do infrastructure improvements in the U.K. support business growth?

Investments in transit, digital networks, and smart cities boost logistics, streamline supply chains, and entice enterprises to emerging urban centers.