What makes Germany an attractive country to live in for expats?

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Gino Peters

Written By:

Gino Peters

Reviewed By: Belinda E.

June 3, 2026 8:46 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!

Key Factors that Make Germany Attractive to Expats

Do you want to live in another country? Germany could be the best place for you to go! Germany is a great place to live for people from all over the world to move to because it has a strong economy, great healthcare, and lots of cultural activities. This detailed guide will explain why living in Germany is so appealing and give useful information to people who are thinking about moving there.

Exploring Expat Life in Germany

When you live in Germany as a foreigner, you can enjoy a lot of different things. There is something for everyone in this big, changing country, whether you like busy towns or quiet countryside. There are many beautiful places to visit and live in Germany, from the historic streets of Berlin to the beautiful scenery of Bavaria.

Job Opportunities

Germany’s strong job market attracts people looking for chances to move up in their careers and work in a wide range of fields. Germany has the biggest economy in Europe, so there are lots of job opportunities in many areas, from business and technology to engineering and health care. Big towns like Berlin, Munich, and Frankfurt are centers for business and new ideas, which brings in expats who want to advance their jobs. Germany has a wide range of jobs for ambitious workers who want to do well in a fast-paced economy. These jobs are in both new, cutting-edge businesses and well-known international corporations.

Best Cities for Expats in Germany

The people who don’t live in Germany can choose from a lot of different living options. Berlin is the capital of Germany and is famous for its lively arts scene as well as its friendly and varied atmosphere. On the other hand, the city of Munich has a high standard of living because it has great public transportation and beautiful parks. A lot of people from other countries also like living in Hamburg, Cologne, and Stuttgart. Each one is different and has its chances and appeal.

Cost of Living Insights

Germany has a lot to offer expats, but it’s important to think about how much it costs to live there. Many things cost more in big towns like Munich and Frankfurt, especially when it comes to housing. But compared to other European countries, Germany’s public transportation, healthcare, and schooling aren’t too expensive. They can also enjoy a high standard of living without going broke because the country has a strong social support system. If you want to know more about the costs of living in Germany, visit this site.

German Healthcare System for Foreigners

The world-class healthcare system in Germany is one of the best things about living there. People who live outside of Germany are usually expected to have health insurance, which can be provided by the government or a private company. The public health insurance system covers everything at a price that most people can pay. On the other hand, private insurance has extra benefits for people who want more personalized care. Expats can be sure they’re in good hands in Germany, where medical facilities are state-of-the-art and doctors and nurses are highly skilled.

German Language Learning Tips for Expats

Even though a lot of Germans speak English very well, learning the language can make your time as a foreigner much better. German is important for getting a job and fitting in with the community, but it’s also useful for everyday conversations. There are a lot of ways for expats to learn German, such as through language classes, online lessons, and language exchange programs. Immersing yourself in the culture and language will not only help you talk to people more clearly, but it will also help you make real bonds with them.

Oktoberfest 2024 Dates

If you want to know how to live in Germany, you can’t leave out Oktoberfest. Millions of people from all over the world come to Munich every year to see this famous beer fair. Oktoberfest is a must-see event for both locals and expats. It has traditional Bavarian music and dances, delicious food, and, of course, lots of beer. It`s from the 21st of September to the 6th of October. Write down the times of Oktoberfest 2024 on your calendar and get ready for an amazing time!

Tips for Networking in Germany as an Expat

As an expat in Germany, building a strong business network is crucial for professional success and integration into the community. Attending events within your industry, joining business groups, and engaging in social activities are effective ways to meet like-minded individuals and expand your network.
To begin, actively seek out networking events and conferences related to your field of expertise. These gatherings provide opportunities to connect with professionals, exchange ideas, and stay updated on industry trends. Additionally, joining business associations or clubs tailored to your interests can facilitate meaningful connections and potential collaborations.
Beyond professional gatherings, engaging in social activities is equally important for networking as an expat. Participating in community events, sports clubs, or cultural activities allows you to meet people from diverse backgrounds and establish genuine relationships outside of the workplace.
Building a network takes time and effort, so it’s essential to approach interactions with boldness, politeness, and honesty. Be proactive in initiating conversations, listening attentively to others, and following up with contacts to nurture relationships over time.
By actively participating in networking opportunities and fostering genuine connections, expats in Germany can enhance their professional opportunities, form valuable business relationships, and integrate more seamlessly into their new community.

Quality of Education

Germany is known for having a world-class school system, which makes it a great place for families to move to. Germany has many great educational options for students of all ages, from top-ranked universities to well-known study centers. The country’s tuition-free or low-cost higher education system is very appealing to families who live outside the country and want to do well in school without spending a lot of money. In addition, Germany’s vocational schools and education programs stress real, hands-on learning, which helps people get ready for work by giving them useful skills and training.

Environmental Sustainability

Germany is a star in sustainable living because it is dedicated to clean energy and protecting the environment. People who live abroad in Germany can enjoy clean air, good public transportation, and a strong focus on recycling and other eco-friendly actions. Germany is committed to sustainability, with green spaces, bike-friendly cities, and renewable energy programs. This makes it a popular place for eco-friendly expats who want to live in harmony with nature and lower their carbon footprint.

Work-Life Balance

People in Germany are known for having a great work-life balance. They have long vacations, flexible work hours, and a society that values fun and relaxation. People who live and work in Germany have a lot of free time to enjoy the country’s rich cultural history, visit nearby European countries, or just relax with family and friends. With a strong focus on work-life balance, expats in Germany can put their health first and live a satisfying life both at work and outside of work.

Safety and Security

Germany is always rated as one of the safest places in the world, which gives expats peace of mind and a feeling of security. Germany is a safe place for both people and families because it has low crime rates, good law enforcement, and strict gun control laws. Foreigners can walk the streets at night, use public transportation, and visit the country’s many sites without worrying about crime or violence. This makes the country a great place to live for people who want to feel safe and stable.

Cultural Diversity and Inclusivity

People from all over the world are welcome in Germany, which is a mix of different cultures, languages, and customs. German expats can enjoy a wide range of cultural experiences, from foreign food and festivals to multicultural neighbourhoods and expat communities. Germany is very committed to being open and tolerant, so they welcome people from all countries and value the contributions they make. People who live outside of Germany can meet people from all over the world, learn about new cultures, and enjoy the beauty of cultural exchange.

Additional Key Factors Making Germany Attractive to Expats

Advanced Technology and Innovation

Germany is at the cutting edge of new technology and progress, which makes it a desirable place for people to move to, especially those working in STEM areas (Science, Technology, Engineering, and Mathematics.) Germany has a lot to offer workers who want to push the limits of innovation, from cutting-edge research institutions to thriving startup ecosystems. Expats can live in a place where creativity and entrepreneurship are valued, work with top experts in their fields, and be a part of groundbreaking projects that shape the future of fields from biotechnology to automobile engineering.

Accessible Transportation Infrastructure

Germany has a large and well-run transportation system that makes getting around the country and beyond easy for expats. Expats can easily get from one city to another and see everything Germany has to offer thanks to its well-connected train systems (known as Deutsche Bahn), roads, and airports. Sustainability is important to the country, and this shows in its transportation system. In big cities, eco-friendly choices like high-speed trains and bike lanes are available. Expats in Germany have easy access to a variety of transportation choices that make getting to work, seeing cultural sites, and weekend getaways possible.

Rich Cultural Heritage and Arts Scene

People from other countries who live in Germany can immerse themselves in a rich culture tapestry that spans hundreds of years of history and art. Germany has a lot of cultural things for expats to see and do, from world-famous museums and theaters to historic buildings and UNESCO World Heritage sites. Expats can immerse themselves in Germany’s rich cultural heritage and arts scene by going to classical concerts in Berlin, visiting medieval castles in Bavaria, or trying local food in Cologne. These activities will enrich their lives with unforgettable memories and experiences.

Outdoor Recreation and Nature

Expats who love the outdoors will love living in Germany because it has beautiful nature scenery and lots of outdoor activities. From the beautiful Alps in the south to the Black Forest’s woods and lakes, Germany has a lot of different outdoor activities for people who love nature. People who live outside of the country can go hiking, skiing, cycling, or just relax in one of the many parks and green areas. With so many beautiful trails, nature areas, and outdoor activities to choose from, Germany encourages expats to live a healthy, active life in the great outdoors.

Culinary Delights and Gastronomic Experiences

The food scene in Germany is a feast for the senses, with a wide range of tastes and culinary delights for expats to enjoy. From hearty Bavarian classics like schnitzel, pretzels, and sausages to regional specialties like currywurst in Berlin and seafood in Hamburg, Germany has a wide range of foods that show its rich cultural history and regional differences. For a taste of the best German food and hospitality, expats can visit busy food markets, eat at restaurants with Michelin stars, and enjoy traditional beer gardens and wine events.

Strong Social Support Systems

Germany puts a lot of effort into social aid and has strong support systems for all of its citizens, including those who live outside of Germany. People who live outside of Germany can be sure that their health is taken care of there, thanks to policies that are good for families and social services. A strong social safety net in the country makes sure that all residents can get good healthcare, education, and housing. This gives expats a feeling of security and stability that makes their time there more enjoyable.

Conclusion

Germany has many draws and benefits that make it a desirable place for people to live abroad. Germany has a lot of chances for expats to grow professionally and personally. It has a strong job market, great healthcare, a rich cultural history, and strong social support systems. Germany is a great place to live for people from all walks of life, whether they want to live in the busy towns or the quiet countryside. Germany is dedicated to new ideas, environmental protection, and welcoming everyone. It really does have something for everyone who wants to start a new trip abroad.

FAQs

What is the cost of living in Germany?

Location, way of life, and decisions all have an impact on the cost of living in Germany. The cost of living is higher in big towns like Berlin, Munich, and Frankfurt than in the country. Common costs include rent, food, transportation, medical care, and fun activities. They spend between €800 and €1,500 a month, and the rates are higher in towns. But of course depending on your own living standards and the city.

How to find housing in German cities?

There are many websites that help people from other countries find apartments in German towns, which could be competitive. People like ImmobilienScout24, WG-Gesucht (for shared places), and Airbnb. There are also rental ads in neighborhood bulletin boards, local newspapers, and on social media sites. Real estate agents or moving companies can make it easier for foreigners who don’t know much about the local market to find a place to live.

Are there English-speaking jobs in Germany?

People who know English can find work in Germany in IT, banking, consulting, engineering, tourism, sales, marketing and more. Multinationals, startups, and foreign groups hire English-speaking workers to meet the needs of the global market. English is becoming more and more valuable at work, especially in cities with lots of expats. Expats can look for jobs on LinkedIn, Indeed, and Glassdoor, and they can also go to job shows and networking events.

What is the average salary in Germany?

The average German wage varies on the job, the amount of experience, the education level, and the region. Most Germans make between €45,000 and €50,000 a year as of 2022. People in big cities with tech, finance, and healthcare businesses may make more money. Before you apply for jobs in Germany, look into the average pay rates for your skills and field. This will help you get a fair offer.

How to open a German bank account as an expat?

It’s easy for expats to open a bank account once they get to Germany. Most of the time, expats need a passport or permission to live in the country, proof of where they live (like a rental agreement or energy bill), and proof of income or a job. Many banks let people who don’t speak German open accounts and use their services in English. A lot of people know about Deutsche Bank, Commerzbank, and ING-DiBa. Check out account features, fees, and services at different banks before choosing one.