How to Hire an Employee in Serbia Without Opening a Company? A Guide to EOR Services
Expanding into a new market often involves much more than finding the right employee. A company needs to understand local regulations, organize employment, manage administration, process payroll, and meet all obligations towards employees and relevant authorities.
But what if you want to hire an employee in Serbia without having a registered legal entity in Serbia?
This is exactly where the Employer of Record (EOR) model can help.
EOR enables companies to hire employees in another country without immediately establishing their own company or legal entity. The EOR partner takes on the formal role of the employer and handles the legal and administrative aspects of the employment relationship, while the client retains control over the employee's day-to-day work.
What Is an Employer of Record (EOR)?
Employer of Record, or EOR, is an employment model in which the EOR partner becomes the employee's formal employer from a legal perspective.
This means that a company does not have to establish a local legal entity simply to hire an employee in that country.
Under the EOR model, MG Group HR assumes the formal role of the employer, while the client retains full control over the employee's tasks, responsibilities, and day-to-day management.
This allows a company to hire the right professional in Serbia while local employment-related obligations are managed through the EOR partner.
How Does EOR Work in Practice?
Imagine that a company from Germany, the United Kingdom, the USA, or another country has found an excellent candidate in Serbia.
The candidate is a good fit for the position, and the company wants to hire them, but it does not have a company in Serbia.
Instead of going through the process of establishing a local legal entity, the company can use an EOR service.
The process is straightforward:
Company finds a candidate → EOR partner formally employs the employee → Company manages the employee's day-to-day work → EOR manages local legal and administrative obligations.
The employee receives formal employment and statutory rights, while the company can focus on business tasks and the performance of its new team member.
What Does an EOR Partner Handle?
An EOR service involves much more than simply signing an employment contract.
As an EOR partner, MG Group HR can take care of key employment-related obligations, including:
- preparing and administering employment contracts
- registering the employee with the relevant authorities
- payroll processing and salary payments
- calculation of taxes and social contributions
- maintaining employee records and HR documentation
- ensuring compliance with local employment legislation
- administration of annual leave and other employment-related obligations
- employee onboarding
- administration of benefits, in accordance with local regulations and employment terms
- ongoing HR and administrative support
- monitoring compliance with local regulations
The goal is simple: the client gets an employee without having to independently establish and manage an entire local HR and administrative structure.
Does the Employee Work for the EOR Company?
Not in an operational sense.
The EOR partner is the formal employer from a legal perspective, but the company engaging the employee still determines their tasks, objectives, responsibilities, and day-to-day work.
This is one of the key characteristics of the EOR model.
In other words, a company does not lose control over its employee by using an EOR service. Instead, it gains local support for the obligations that it would otherwise have to manage independently.
Who Can Benefit from EOR Services?
The EOR model can be useful for different types of companies.
Foreign Companies Looking to Hire in Serbia
A company can find a candidate in Serbia and start an employment relationship without first establishing a local company.
This is particularly useful for companies that want to expand their team but do not yet have sufficient reason to establish their own organization in Serbia.
IT and Technology Companies
IT companies often work with international teams and hire professionals regardless of their location.
EOR enables companies to hire talent in Serbia while receiving local support for employment and HR administration.
Startups and Scale-Ups
Rapid growth often requires rapid hiring.
Instead of waiting to establish a local legal structure, companies can use the EOR model to expand their team more quickly.
Companies Looking to Test a New Market
EOR can be a practical solution for companies that want to evaluate the potential of a new market before investing in establishing their own legal entity.
This allows companies to start with a smaller team and assess business results before deciding on further expansion.
Companies Whose Employees Relocate to Another Country
EOR can also help companies retain key employees after they relocate to another country, when the employment arrangement needs to be adapted to local regulations.
EOR and the Risk of Worker Misclassification
International workforce arrangements can also raise questions about the correct classification of an employment relationship.
If a person is effectively working as an employee but is engaged under an inappropriate contractual model, the company may face legal and financial risks.
An EOR model can help companies structure the employment relationship through an appropriate local employment framework and reduce the risk of worker misclassification.
This makes EOR particularly useful for companies that want to hire international talent but do not have a local HR and legal team to manage all aspects of the employment relationship.
EOR or Setting Up a Company in Serbia?
EOR does not mean that a company will never need its own legal entity.
Depending on the business plan, number of employees, and long-term objectives, establishing a local company may eventually be the right choice.
However, when a company wants to quickly hire one or several employees, test the market, or is just beginning operations in Serbia, EOR can provide a simpler and more flexible solution.
EOR Model
- no need to immediately establish a local company
- faster start to the hiring process
- local HR and administrative support
- payroll, tax, and social contribution management
- support with local employment legislation
- the company retains control over the employee's day-to-day work
Own Legal Entity
- the company establishes its own local structure
- takes direct responsibility for local administration
- organizes its own HR and other functions
- may be more suitable for companies with a long-term and larger presence in the market
The right choice depends on the specific situation, but EOR allows companies to avoid taking on the entire structure of local operations immediately.
How Quickly Can Employment Start?
One of the main advantages of the EOR model is speed.
Establishing a legal entity, organizing administration, and setting up local processes can take significant time.
With an EOR partner, the hiring process can begin much faster because a local structure is already in place to handle the formal employment obligations.
The exact timeline depends on the country, candidate, required documentation, and other circumstances, but the goal of the EOR model is to enable a company to hire an employee significantly faster than through the traditional process of establishing a local business structure.
What Does the EOR Process Look Like?
The process can be divided into several basic steps.
1. Consultation
First, the company's needs, position, candidate, and country of employment are assessed.
2. Offer and Agreement
The employment terms and EOR service fees are defined.
3. Onboarding
The necessary documentation and employment contract are prepared in accordance with local legislation.
4. Employment
The employee formally enters into an employment relationship through the EOR partner and begins working for the company that hired them.
5. Ongoing Support
Throughout the employment relationship, the EOR partner manages payroll, administrative obligations, benefits where applicable, and compliance with local regulations.
Why Do Companies Choose EOR?
EOR is not simply a way to avoid opening a company.
For many companies, its greatest value lies in enabling faster hiring, less administration, and access to local HR expertise.
Instead of having their internal team spend time researching local employment legislation, organizing administration, and monitoring ongoing obligations, companies can focus on their core business.
At the same time, employees receive formal employment and the rights they are entitled to under local regulations.
EOR in Serbia – Local Knowledge with an International Approach
Serbia is becoming an increasingly attractive market for companies looking for skilled professionals and seeking to expand their teams.
However, hiring in another country requires knowledge of local employment legislation and administrative procedures.
That is why choosing a reliable EOR partner is important.
MG Group HR provides EOR support to companies that want to hire employees in Serbia or organize international employment without having to immediately establish their own legal entity.
Our team takes on the formal employer obligations, while you retain control over the day-to-day work of your employees.
Hire an Employee in Serbia Without Opening a Company
If you have found the right candidate in Serbia but do not have a registered legal entity in the country, EOR can be a solution that allows you to start the employment relationship without unnecessary delays.
MG Group HR can take care of the formal employment process, payroll, taxes and social contributions, contracts, employee documentation, and other administrative obligations, while providing support in ensuring that the employment relationship complies with local regulations.
You can focus on your business and managing your team.
Want to learn how EOR services can work for your company? Contact MG Group HR and speak with our team about your hiring needs in Serbia or abroad.
The right talent at the right time – Your trusted recruitment partner.