PEO Employer of Record in the EU: Simplifying Expansion & Compliance

If you are thinking about international expansion into Europe, you have probably heard of an international PEO. An international Professional Employer Organization is a way to employ people without having your own entity in that specific country. But what differentiates PEO from Employer of Record?

In this blog, insights are given on how an international PEO can add value to your European expansion as we cover all the important topics concerning PEOs in Europe.

What is a PEO? 

The acronym PEO stands for Professional Employer Organization. A PEO is an HR outsourcing company that provides comprehensive HR services for businesses, allowing them to grow their organization by focusing on their core business.

PEOs work with businesses to assist them with:

• Payroll,
• Benefits,
• HR consulting,
• Regulatory compliance.
  
  

What is European PEO? 

It is important to know that if you use a PEO outside the United States or Canada – in Europe, for example – you are required to have or set up a legal entity in the European country where the employee would be located. This can be complex and costly.

EuroDev provides alternative methods for this.

A European PEO, also known as International PEO or Global PEO, is a mechanism to employ people without having your own entity in that specific country. As a central part of PEO service, European Employer of Record (EOR) provides the simplest way for businesses to grow and manage their international presence.

Why use a PEO? 

There are several reasons for businesses to use international PEOs. First of all, a PEO provides assistance with payroll, benefits, and compliance issues under local/national laws. By taking care of the paperwork and providing regulatory compliance assistance, PEOs allow businesses to improve productivity and profitability during their expansion.

In other words, working with a PEO allows you to grow your organization by focusing on your core business. Also, a PEO could potentially reduce legal liabilities or obligations to employees that it would have otherwise.  

According to a recent study by economists, small businesses that use PEOs grow 7% to 9% faster, have 10% to 14% lower employee turnover and are 50% less likely to go out of business. ⁽¹⁾  

At EuroDev, there is a focus on great employment practices. For many small–medium enterprises (SMEs), it is difficult to arrange these employment practices well, especially in an unfamiliar country with unique and specific employment laws. Choosing a PEO can also help bridge the gap between cultures, especially in multi-cultural Europe.

Who uses a PEO? 

Any business can find value in a PEO relationship. Mostly, SMEs are using a PEO. Sometimes, larger businesses are also finding value in a PEO relationship because PEOs offer advanced HR technologies and expertise in HR management. PEOs can add value for businesses in any industry, ranging from accounting firms to high-tech companies and small manufacturers.

Guidelines for Choosing a PEO

• Meet the people who will be serving you and make sure the PEO is capable of
  meeting your goals.
•   Ask for client and professional references.
•   Check whether the PEO has experience with similar cases. 

Most popular European PEO destinations among our clients

•   The United Kingdom
•   The Netherlands
•   Germany
•   France

FAQs

Do business owners lose control of their business when they work with a PEO?

• No, the business owner retains ownership of the company and control over
  its operations. PEO only has an administrative role and will not interfere with
  the daily work or management of staff.
  

What is the difference between PEO and Employer of Record Europe?

• An Employer of Record (EOR) puts a portion of your business and
  employees on its payroll. A PEO takes on all your employees and provides all
  HR-related functions.

More information

In case you would like to have more information concerning PEO/Employer of Record or our HR Outsourcing services in general, do not hesitate to connect with Monique Ramondt-Sanders – VP of Human Resource Outsourcing at EuroDev.