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An EOR enables a company to hire employees in another country without first establishing its own local legal entity. The EOR provider becomes the employee’s legal employer and takes responsibility for the formal employment, including the employment agreement, payroll administration, tax withholding, employer contributions, benefits, insurance and agreed compliance obligations. The client company continues to manage the employee’s day-to-day work and remains responsible for tasks, goals and performance.

A PEO instead supports companies that already have a local legal entity or are correctly registered as an employer in the country. The client company remains the employee’s legal employer and retains ultimate employer responsibility, while the PEO provider acts as an external HR and payroll function. The service may include payroll administration, tax reporting, pensions, insurance, employee benefits, onboarding and ongoing HR administration.

The key difference is therefore who acts as the legal employer. With an EOR, the EOR provider is the legal employer. With a PEO, the client company remains the legal employer. An EOR is generally suitable for companies that want to begin hiring without their own local legal entity, while a PEO is suitable for companies that already have a local employing entity but need support with HR, payroll and local administration.

VAT rates vary depending on goods and services, but the three most common VAT rates are 6%, 12% and 25%. The output VAT must be reported to the Swedish Tax Agency. The difference, i.e. the difference between input and output VAT, must be reported to the Swedish Tax Agency. The company either gets money back or has to pay the difference to the Swedish Tax Agency.

No, not all companies in Sweden need to have an auditor. Smaller private limited companies can usually opt out of an audit provided they do not exceed certain threshold values for number of employees, balance sheet total and net turnover. If the company exceeds more than one of the threshold values for two consecutive years, it may be subject to a statutory audit requirement.

Even companies that are not required to have an auditor can voluntarily choose to have an audit. This can be valuable if the company has external investors, bank financing, international owners or specific requirements from the parent company.

An accounting consultant and an auditor have different roles. The accounting consultant usually helps with the ongoing bookkeeping, tax returns and the annual report, while the auditor independently reviews the company’s accounts and the board’s management.

Yes, a PEO in Finland can administer payroll, pensions, insurance and occupational health services for a company with a Finnish legal entity.

The monthly payroll process may include calculating gross salary, tax deductions, employer contributions, employee benefits, deductions and net salary. The PEO provider can also produce payslips and report paid wages and other compensation to the Finnish Incomes Register.

The PEO provider can administer the statutory earnings-related pension insurance, for example TyEL, as well as relevant accident and unemployment insurance. It can also help the company set up and coordinate the preventive occupational health services that employers are normally required to arrange for their employees in Finland.

The Finnish company remains the legal employer and retains ultimate responsibility. The PEO provider ensures that administration, reporting and recurring processes are carried out in accordance with the agreed allocation of responsibilities.

An Employer of Record (EOR) is a provider that becomes the legal employer of personnel working for a client company. The client company manages the employees’ day-to-day work, responsibilities, goals and performance, while the EOR manages the formal employment and agreed employer obligations.

The service enables companies to employ personnel in another country without first establishing their own local legal entity. The EOR provider employs the personnel through its local legal entity and manages employment agreements, payroll, tax withholding, employer contributions, benefits, insurance and agreed compliance obligations.

Using an EOR does not automatically eliminate every legal or tax risk. The client company’s activities and the employee’s role may still create obligations for the client company, including a potential permanent establishment risk, which should be assessed separately.

Services may include:

• Employee benefits administration
• Payroll administration
• Tax withholding and employer reporting
• Preparation and administration of local employment agreements
• General employment administration
• Acting as the legal employer
• Support and coordination relating to visas and work permits
• Communication and coordination with relevant authorities
• Guidance and administrative support regarding notice periods, terminations, severance pay and other employment-related matters