EOR vs. PEO: Which Model Is Suitable for Hiring in Belarus?

International companies planning to hire specialists in Belarus increasingly consider alternative market-entry models to reduce administrative risks and accelerate the launch of operations. The most popular solutions are the EOR (Employer of Record) and PEO (Professional Employer Organization) models. Both allow companies to operate without establishing a legal entity, but they differ in liability levels, interaction structure, and the scope of employer responsibilities that remain on the client’s side.

For IT companies and tech teams, it is particularly important to onboard employees quickly, comply with local employment rules, and maintain flexibility in team management. The choice between EOR and PEO affects hiring speed, legal security, and the company’s financial obligations. In this article, we will examine the key differences between the two models, their advantages and limitations, and help determine which solution is more suitable for hiring in Belarus.

Below is an expanded section written in the style of Recruitment.by and aligned with the context of the article.

What EOR and PEO Models Represent

EOR (Employer of Record) and PEO (Professional Employer Organization) are two different approaches to onboarding employees through an external provider. They enable companies to operate in Belarus without establishing a legal entity or with minimal internal administrative effort.

The Essence of the Models and Key Differences

The EOR model assumes that the provider acts as the legal employer. The provider signs the employment contract, prepares all required documentation, calculates salaries, makes mandatory deductions, and interacts with government authorities. The client company manages employees’ tasks and performance but does not bear legal responsibility for employment compliance.

The PEO model is based on co-employment. The provider handles part of HR and administrative functions, but the client company remains the legal employer. This requires deeper involvement from the client in HR administration, hiring, termination, and compliance with local labor regulations.

The main difference between these models is the degree of legal responsibility and the level of control over hiring processes. In an EOR model, the provider assumes full responsibility; in a PEO model, responsibility is shared, and the client must fulfill a significant portion of employer obligations.

How Roles and Responsibilities Are Distributed

In the EOR model, the provider becomes the formal employer and is fully responsible for managing employment relationships: from signing contracts to payroll, leave management, maintaining personnel files, and compliance with government requirements. The client company is responsible only for operational management—setting tasks, quality control, and integrating the employee into the team.

In the PEO model, responsibilities are distributed differently. The provider acts as an HR partner but does not replace the employer. It may process payroll, assist with documentation, and ensure compliance, but legal risks and formal responsibility remain with the client company. This requires a solid understanding of local labor regulations and consistent interaction with the provider.

Why These Models Are in Demand for Hiring in Belarus

The Belarusian market is attractive to international IT teams due to the abundance of skilled specialists, strong engineering culture, and competitive hiring costs. However, for foreign companies, local market entry involves administrative requirements, operational expenses, and strict adherence to local labor procedures.

EOR and PEO allow companies to start operations quickly, avoid complexities of registration, and minimize legal risks. This is especially important when hiring remote teams, launching projects on short notice, or when the scope of operations does not justify establishing a local entity.

The EOR model is typically chosen by companies seeking a simple and secure way to hire employees in Belarus without diving into local labor processes.
PEO is suitable for companies already present in the market or willing to share legal responsibility while retaining greater control over internal HR processes.

How the EOR Model Works in Belarus

Under the EOR model, the employee is officially employed by the provider, which serves as the formal employer. The provider signs the employment contract, maintains HR documentation, manages leave, sick days, business trips, and handles all aspects of the employee’s legal status.

For the client company, this means it can hire specialists in Belarus without registering a legal entity or navigating local employment requirements. The employer manages only tasks and workflows the EOR partner handles everything else.

Tax, HR, and Insurance Responsibilities: Who Handles What

With EOR, all administrative responsibilities lie with the provider. The provider processes payroll, calculates and remits taxes, manages social contributions, submits reports, and ensures compliance with established procedures.

The client does not need to understand local requirements, maintain HR records, or communicate with government authorities. This minimizes the risk of employment-related errors and reduces the likelihood of issues during inspections.

When EOR Provides Maximum Benefit

EOR is especially effective when a company needs rapid market entry, wants to test a new direction, launch a pilot project, or hire individual specialists without investing time in creating a legal entity.

The model is particularly beneficial when:

a specialist needs to be hired immediately;
the team is small, making a local office economically unreasonable;
the company is not ready to take on full administrative responsibility;
flexibility is required to quickly scale up or down;
minimizing legal and operational risks is essential.

For international companies seeking a presence in Belarus without bureaucratic barriers, EOR is one of the most convenient and secure employment models.

How the PEO Model Works in Belarus

In the PEO model, the client company remains the official employer, while the provider acts as an outsourced HR partner. Responsibility is shared: the client retains key employer functions, while the PEO manages some administrative tasks such as payroll, leave processing, HR documentation, and compliance support.

This model is particularly useful for companies that already have a legal entity in Belarus but want to optimize HR processes and reduce the workload on internal teams.

What Responsibilities Stay with the Client

Despite the PEO provider’s active role, many obligations remain with the employer. The client independently:

hires and terminates employees;
defines employment terms and work conditions;
manages the team and oversees performance;
makes strategic HR decisions;
communicates with employees on work-related matters.

The PEO provides methodological and operational support but does not replace the employer’s core role.

Limitations of the PEO Model for Foreign Companies

For international employers, PEO may be less universal than EOR. The main reason is the requirement to have a legal entity in Belarus. Without it, PEO is impossible because the client is the legal employer.

Additionally, the client must interact with government authorities, participate in inspections, sign official documents, and remain directly responsible for HR and tax compliance. PEO reduces risks and simplifies administration but does not eliminate bureaucratic obligations entirely.

Therefore, PEO is less suitable for companies entering the market for the first time or those not planning to open a local office. Such companies more often choose EOR as a more flexible and secure option.

Comparing EOR and PEO for Hiring in Belarus

Let’s compare EOR and PEO based on several key criteria.

1. Level of Legal Risks and Responsibility

The main distinction is the distribution of responsibility.

Under EOR, the provider carries the full legal burden: it is the official employer, manages HR administration, payroll, compliance, and interactions with government authorities. The client is essentially free from legal risks associated with employment.

In the PEO model, the client company remains the employer. This means full legal responsibility for employees, compliance, and documentation lies with the client. The PEO supports and advises but does not replace the employer before government bodies. For international companies, this often makes PEO less convenient and riskier.

2. Speed of Hiring and Launching Operations

EOR allows companies to hire employees almost immediately after signing the agreement with the provider. There is no need to register a legal entity, open accounts, or obtain employer status, the provider already has the infrastructure in place. As a result, entering the market is fast and seamless.

PEO requires the client to have its own legal entity in Belarus. If the company is new to the market, time required for registration, administrative setup, and accounting procedures significantly slows down the launch. Therefore, EOR always wins in terms of speed.

3. Cost of Services and Hidden Expenses

PEO may appear cheaper based on service fees alone, but companies must also cover costs related to accounting, HR, compliance, and internal administration.

EOR offers a fixed, transparent cost that includes taxes, social contributions, HR support, and full administrative handling. There are no hidden fees. For small teams, EOR is often more cost-effective.

4. Scalability and Team Expansion

EOR provides maximum flexibility: companies can quickly expand, downsize, or build distributed teams. The provider handles all paperwork, which is particularly important during rapid growth or changing project needs.

In the PEO model, scaling requires more involvement from the client, since onboarding and administration must align with internal employer procedures. This increases the bureaucratic load and slows down expansion.

As a result, EOR is ideal for companies that value speed and flexibility, while PEO is suitable for companies already established in Belarus and seeking HR process optimization rather than accelerated growth.

How to Choose the Right Model for Your Company

The optimal hiring model depends on how the company plans to operate in Belarus and what level of administrative responsibility it is willing to assume.

If a business is entering the market for the first time, doesn’t want to establish a legal entity, or needs rapid hiring without administrative procedures, EOR is the logical choice. This model suits startups, distributed teams, companies testing the market, or developing R&D centers.

If a company already has a local presence and plans long-term operations, and if it wants to maintain direct employer status, PEO may be appropriate. It streamlines HR processes but does not replace the employer’s functions. PEO is suitable for companies ready to invest in internal infrastructure.

Typical Mistakes When Choosing EOR or PEO

Many international companies choose a hiring model without fully considering their goals and constraints.

Common mistakes include:

1. Underestimating legal responsibility. In PEO, risks remain on the employer, which is not always clear at the outset.

2. Comparing only service prices. PEO appears cheaper, but total costs are higher due to internal operations and statutory obligations.

3. Expecting “full outsourcing” from PEO. Clients often assume PEO functions like EOR, leading to misunderstandings and compliance errors.

4. Choosing PEO without registering a legal entity. Some foreign teams are unaware that PEO is impossible without local incorporation.

5. Choosing EOR when full employer control is required. EOR is not appropriate if maintaining direct employer status is essential.

These mistakes can be avoided by evaluating goals, operational scale, and legal requirements in advance, as well as consulting with local experts.

Practical Recommendations for International IT Teams

For tech companies working in distributed environments, it is crucial to choose a model that ensures fast hiring and reduces legal burden.

Recommendations:

1. Choose EOR if you need rapid access to talent, this eliminates the need to establish a legal entity and enables onboarding in days.

2. Choose PEO if you already have a local entity and want to optimize HR processes and reduce internal workload.

3. Consider growth plans. During active expansion, EOR offers more flexibility and less administrative pressure.

4. Account for remote work specifics. EOR is more adaptable to distributed teams and international workflows.

5. Conduct a responsibility audit. Understand which functions you want to retain internally and which to delegate to the provider.

For most foreign IT teams entering the Belarusian market, EOR becomes the safest and most efficient solution, as it provides maximum speed, support, and risk reduction.

Conclusion

Ultimately, the choice between EOR and PEO depends on the company’s objectives, operational scale, and the degree of control it wants to maintain. Choosing the wrong model can lead to unnecessary expenses, administrative difficulties, and increased legal risks.

Our team has extensive experience supporting international IT companies in Belarus and can help you select the optimal model for your business, whether EOR or PEO. We handle employee onboarding, payroll, tax and HR compliance, as well as full support throughout the hiring and personnel management cycles. This enables companies to focus on business development while minimizing administrative burden and risks.