Debunking 05 Employer-Of-Record (EOR) Myths

myths and misconceptions

Planning your business expansion in Vietnam is a challenging task. From setting up your entity to hiring qualified professionals, managing payroll, and ensuring compliance: the tasks and processes you need to complete and manage are as crucial as they are time-consuming. To solve this concern, Employer of Record (EoR) is becoming an increasingly popular option for organizations seeking compliant employment and administration of workers – particularly overseas. 

However, misconceptions and myths regarding EOR services often obscure understanding of their legality and benefits. In this article, we will be debunking some of the most common myths and misconceptions associated with EOR services and providing insight into whether it is the right service for you. 

Myth 01: Outsourcing and EOR Services Are The Same

It is not true. There is the fact that EOR and Outsourcing are both third-party service providers. However, outsourcing is mainly used for competencies that are typically outside of your company’s scope. This could be on an ad-hoc basis, or a 6-month contractual basis, for example, and require the company effort to maintain the quality standards of outcome. On the other hand, an Employer of Record is a worry-free solution that requires less input from you to operate.

Moreover, there is a fundamental difference between EOR and outsourcing services, in that EOR ensures adherence to all applicable regulations, and handles payroll, taxes, and benefits on behalf of the client company. 


Myth 02: An EOR is more expensive than setting up a business entity

Registering a new company seems a money-saving process at the beginning, however, operation from time to time is not only a cost center but also requires an investment of time and resources. The company will have to manage several associated costs, such as

  • Salary payment
  • Employment contributions (insurance, pension, social security, etc.)
  • Business Insurance
  • Corporate taxes
  • Onboarding & Offboarding: employment agreement, compliance review, redlines, registration of the employee with local authorities

On the contrary, an EOR service is a more affordable option when you only pay a consolidated monthly margin, while the EOR provider is the one who takes care of all employment duties in-country and has its local company infrastructure in place.  As the client company, it simplifies budgeting and expense forecasting and lightens your team’s workload of managing your offshore entity.

myths and misconceptions

Myth 03: An EoR is only suitable for big multi-nationals

Instead, it is quite the opposite. The EOR solution suits SMEs pretty well as the client does not have to deal with huge administrative burdens such as payroll, benefits, employee contracts, offboarding an employee, etc. Metasource’s EOR solutions do not have minimum headcounts – clients can secure our services for one worker, or as many as they need. This can be advantageous for both large companies looking to streamline operations and small businesses seeking to focus more on their core business.


Myth 04: Managing EOR employees is challenging

It is not entirely true. The client has 100% authority over the supervision and management of the employees including the work performance, compensation, performance reviews, and other similar aspects. As an EOR provider, like Metasoure, we work closely with the client to carry out the administration of the worker’s employment, allowing the client to manage their day-to-day tasks as normal. One important thing to note is that the EOR provider should always be involved in situations such as terminations and disciplinaries to ensure local compliance.  

How Metasource can help you during your expansion in Vietnam? Get in touch with our team of experts. We’re here to help you make your business in Vietnam a success.

Read more: Navigating the Complexities of Obtaining a Working Permit in Vietnam

Read more: How To Register A Limited Liability Company In Vietnam A Quick Guide

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