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Employer Of Record: Operate in Brazil without Setting There

Employer Of Record. Expand your market to Brazil by remotely controlling your operations. No direct hires. Without setting up a local company. With legal security.

By Julhi Almiron Bonespírito,
with Graziela Barreto Luchetti.
Portuguese >

Legale Overseas, No. 243
As our international legal operations, continue to expand, one of the most common questions we receive is: «What’s the simplest, safest, and most cost-effective way to expand into the Brazilian market?»
Without beating around the bush, the answer is in the title itself. And it’s not difficult to understand why.
One of the outcomes of the social isolation brought about by the pandemic (2019-2021) was undoubtedly the decline of physical borders and the disappearance of distances in work relationships.
This elimination of barriers between employers and employees around the world, due to technological advances catalyzed during that period, has broken all paradigms related to physical distance, to become this same variable rather than an objection, a possible competitive advantage.
This is the context in which the solutions and concept of the Employer of Record (EOR) have gained global prominence. EOR is an expertise through which a company takes over the local execution of its operations and assumes legal responsibilities on behalf of another company, ― its client ―, in a country where the client does not have a presence. This ensures compliance with the country’s legislation and regulations.
In simpler terms, an Employer of Record (EOR) is a solution that enables a company to expand its business globally by establishing its operational presence in a new country, ― note ―, without physically setting up a presence there or directly hiring local professionals under its own name. Instead, it establishes its presence through remote management, entrusting the local operational responsibility to a specialized EOR provider. In essence, this provider acts as the «legal» employer, assuming all legal responsibilities and obligations related to workforce and applicable taxes, while the company maintains control over the remote operations.
This has been one of the most compelling structures to establish in Brazil, particularly for small and medium-sized foreign enterprises, companies seeking to develop specific projects, and large enterprises interested in lightweight «entry formats» prior to making more substantial investments.
of EOR
There are many advantages to hiring an EOR.
While establishing legal branches (or new corporate entities) and building internal workforces in target countries for an expanding business offer substantial benefits, many companies adopt hiring an EOR as an «entry» strategy ― or even as a stable solution for medium and small-sized enterprises. This allows them to swiftly overcome local bureaucracy inertia and minimize the expenditure of time and resources devoted to in-depth understanding, for instance, of applicable legislation, agreements with local unions, and customary administrative procedures.
Conducting operations in a new country through an EOR is both rapid and evidently more cost-effective.
An EOR can surmount administrative bureaucracy hurdles, fulfill local legal obligations, save time, mitigate risks, and reduce costs more effectively than any other expansion-focused model.
This allows the Employer of Record solution to establish its presence primarily through operational control ― deep down, the only thing that really matters ― overseeing local production capacity and the performance of professionals contracted through the EOR.
an EOR
To secure a legally sound and high-performance Employer of Record solution, a solid legal framework is paramount.
In all letters: it requires an exceptionally reliable law firm with technical maturity and international experience to legally navigate the journey from research to contracting an EOR solution provider.
With the support of an experienced law firm, the selection should also consider (a) the EOR’s experience in managing technically similar operations; (b) solid knowledge of local legislation, especially regarding labor relations, which includes legislative, jurisprudential, and accounting nuances, as well as local customs and practices; (c) the EOR’s reputation, including the quality of institutional relationships with local government, unions, the judiciary, and the community; (d) the track record of the EOR’s relationships with its employees; and even (e) whether the EOR has a history of respecting and upholding the intellectual property rights of its clients.
BorderlessFor Real
Given the absence of borders in today’s world, companies providing EOR solutions with international presence frequently establish international teams as well. They compensate each employee in accordance with the legislation of their country of residence, creating interdisciplinary multicultural teams, welcoming diverse professional profiles, and blending various employment contract models.
EOR in Brazil:
People Management
The services provided by an Employer of Record typically encompass all major processes of People Management. This includes recruitment and selection, onboarding, compensation, professional development, and, of course, terminations, all in accordance with their legal implications and the specifics of local contracts and regulations. This also involves fundamental human resources administration tasks such as tracking work hours (if applicable), payroll processing, strategic management of benefit packages, and profit-sharing programs.
Brazil, renowned for its vast market size, also possesses a rather unique legal framework when it comes to labor relations, company formation, and taxation.
Therefore, engaging an EOR provider with the appropriate legal support can be an especially fitting solution.
Lower Costs
Undoubtedly, hiring an EOR provider is an agile, lightweight, and economical solution for companies expanding internationally. It can be highly advantageous and relatively secure if the selection process is supported by experienced legal counsel and takes into account the EOR’s experience, fluency in applicable laws, track record of respecting its employees, and history of honoring commitments with its clients.

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VAZ DE ALMEIDA ADVOGADOS is an independent Law Firm, dedicated exclusively to giving Legal Support for foreign companies in Brazil, as well as for Brazilian companies operating in the country and abroad. We specialize in unblocking the barriers that compromise executives' time and energy, so that they can focus on the work that really matters: exceeding their shareholders' expectations.