29/09/2026
A company is ready to hire its first employee in Brazil.
The offer is drafted. The start date is circled on the calendar. Then the questions begin.
Legal recommends an Employer of Record (EOR). Finance asks whether engaging the individual as an independent contractor would be less expensive. The hiring manager simply wants someone to start next month.
It feels like a choice between two ways of hiring internationally. But in reality, it isn’t.
The first question is whether the role is genuinely independent work or, in substance, employment.
Get that answer wrong and the consequences extend far beyond payroll. Tax liabilities, intellectual property ownership and worker misclassification can all become expensive problems long after the person has started working.
Both an EOR and an independent contractor engaged through an Agent of Record (AOR) allow companies to hire internationally without establishing a local entity. From the outside, they can look remarkably similar.
Under each arrangement, someone is working in-market. They are onboarded quickly. The company avoids the time and cost of incorporation.
Underneath, however, the legal relationship is completely different. One creates an employment relationship. The other supports a commercial contractor relationship. That distinction shapes everything that follows.
The companies that expand successfully don’t begin by asking, “Which structure is cheaper?” They begin by asking, “What kind of working relationship are we actually creating?”
Once that answer is clear, the right engagement model usually becomes much easier to identify.
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