Enterprise risk guide
An EOR tells you who employs the worker. It does not tell you where your business is operating.
Permanent establishment is the gap enterprise legal teams find late, usually after the programme is running. It is manageable, and it is mostly a question of how the role is scoped rather than which vendor you picked. Here is how the four risk layers separate, and the controls we put in writing before anyone is engaged.
Planning guidance from an operating partner, not legal or tax advice. We work alongside your counsel and will put our position in writing for them to review.
Four risk layers, only one of which an EOR solves
Employment risk
Who is the legal employer?
Resolved by an EOR or a compliant staffing structure.
A local employer signs the contract, runs payroll, remits contributions and carries statutory benefits and severance. This is the layer the category sells, and it is genuinely solved.
Permanent establishment risk
Where is your business deemed to be operating?
Not resolved by employment alone.
PE turns on what the worker does, not who pays them. A worker who negotiates or habitually concludes contracts, or who operates a fixed place of business on your behalf, can create a taxable presence for your company regardless of who the legal employer is.
Intellectual property
Who owns what the worker creates?
Not automatic, and not uniform across the region.
Work-for-hire assumptions imported from US practice do not transfer cleanly to every LATAM jurisdiction. Assignment has to be drafted deliberately, in the employment contract and in a direct assignment to your entity.
Classification
Is this person genuinely a contractor?
Resolved only by facts, never by the paperwork.
Fixed hours, direction and control, exclusivity and duration determine the answer. Mexico, Brazil, Colombia and Argentina all enforce reclassification, and exposure lands on the company benefiting from the work.
Activity patterns that raise exposure
Exposure follows what the person does. Review the role definition against this list before you review vendors.
- A worker in-country negotiates or habitually concludes contracts in your name
- You hold a fixed place of business, office, warehouse or leased space, used for your core activity
- Local staff act with apparent authority to bind your company commercially
- Revenue is invoiced from the country, or local customers contract with the local presence
- The activity performed in-country is your core business rather than preparatory or auxiliary support
- A dependent agent operates exclusively or almost exclusively for your company
Thresholds and treaty positions vary by country and by your own tax residency. Treat this as a screening list to run with your tax advisor, not a determination.
The controls we put in your agreement
Scope the role before you paper it
We define, in writing, what the worker may and may not do in-country: no contract negotiation or conclusion on your behalf, no signing authority, no client-facing commercial commitments unless the structure is built to carry that.
Name the legal employer per country
Direct local delivery in our core markets, a named governed partner elsewhere. You know which entity signs the employment contract in each country before signature, not after an incident.
Assign IP twice
Local-law employment assignment plus a direct assignment and confidentiality instrument enforceable under US law, so ownership does not depend on a single jurisdiction's default rule.
Write the classification view down
A documented position on employment versus contractor before anyone is engaged, and conversion of long-running contractors to compliant employment without resetting the team.
Escalate to the right structure
When the activity genuinely creates exposure, employment is the wrong tool. We will tell you that and recommend a local entity, a SOW with delivery risk on us, or a different market, and we build and transfer the entity if that is the answer.
Keep the file audit-ready
Contracts, contribution filings, benefit accruals, screening records and offboarding evidence retained per country, so a procurement or tax review is a document request rather than a project.
Frequently asked questions
Send us the role definition. We will send back the structure.
Tell us the countries, the roles and what those people will actually do day to day. You get a written view of the legal employer per country, the classification position, the activity restrictions we recommend and the landed cost per seat. Your counsel gets something concrete to review instead of a brochure.
Build my LATAM hiring plan
Three steps, about 40 seconds. You get a role-level shortlist plan, salary benchmark and landed cost per seat.
Takes about 40 seconds. You see the recommended model first, the email comes last.
Market, model, landed cost and a 90-day sequence, free and without an email.