Employer of Record: Work internationally, live in Berlin
Berlin is a great place to live when compared to other global metropolises such as London, Paris or New York. The city offers amazing infrastructure and an excellent quality of life. In Berlin you have access to public health care, outstanding public transport and fantastic schools for your children. There is also a wonderful range of cultural events on offer, and the joy, unique in Germany, of living in a city with citizens from 198 nations. So it’s no surprise that more and more qualified professionals are moving to Berlin.
For all those who want to live in the German capital but are employed by a foreign company with no German presence, there is a solution: the Employer of Record (EOR) model. An Employer of Record allows you to enjoy steady employment for foreign companies while living in Berlin, all thanks to an EOR partner, such as the Berlin start-up Lano. As remote jobs become more common, the service is growing in popularity in German-speaking DACH countries and across Europe, but also overseas. We interviewed the founders of Lano, Aurel Albrecht and Markus Schünemann, to find out how the EOR model works.
What does Lano do, exactly?
Our platform offers professionals and companies the opportunity to work together across borders. Our services are directed at both employers and employees. As an employee, you can work for companies from over 150 different countries, regardless of where you live. For example, you could live in Berlin but work for a company with headquarters in the USA, China or Brazil. Even though you are employed by a foreign company, Lano allows you to profit from all the advantages of a German employment contract. You have insurance, are paid in euros, etc. And as an employee, you don’t pay anything for our services. Your employer is responsible for all costs.
What is an Employer of Record (EOR)?
The current competition to find the best professionals on the job market, combined with the shortage of qualified workers, is forcing companies around the world to rethink their strategies. They often can no longer find qualified employees in their city, region or even country. They can, however, often quickly find the right employee in a foreign country. But it is usually quite difficult for employees to work for a foreign company that does not have an office in the country they live in. Our Employer of Record service (EOR) makes it possible.
An EOR allows companies to hire employees around the world, including in countries in which they have no offices. The EOR always has headquarters in the countries in which the employees are to be employed, and takes on the legal role of the employer on behalf of the hiring company. For example, if you want to work for a foreign company while living in Berlin, you can use an EOR and be employed under normal German employment conditions. You will have a German employment contract and be subject to German employment law (protection against dismissal, social security, salary, taxes, paid leave, etc.)
The EOR model should not be confused with personnel leasing (Arbeitnehmerüberlassung, AUG). EOR employees are employed by foreign companies, while those employed under personnel leasing work for a German company and are ‘on loan’ to another German company. And while personnel leasing contracts may not legally exceed 18 months, there is no legal limit to employment contracts using the EOR model, and working relationships are generally permanent.
What are the benefits to employees?
They can work wherever they want to. They are not bound to a specific location when searching for an employer. They can apply anywhere in the world. And of course, the best part is that they can still live in Berlin, without having to move abroad. If the work goes well, they often do decide to move, but they are not taking a huge risk right from the start. It’s a great way to test for synergies.
That’s true. It is more common than ever for people to work remotely, and this is also true in the hunt for skilled employees. What role does an EOR service like yours play in this trend?
On the one hand, we offer opportunities for companies and specialists around the world to find one another, but on the other hand our model also allows people to continue their employment. For example, an employee might move countries for personal reasons; an EOR contract allows them to keep working for their employer without any legal hassles.
And from a corporate point of view, we make it easier for companies to join the German market. Companies can employ the first few German workers on site without immediately having to open a German office, which everyone knows requires dealing with a lot of bureaucracy.
What can skilled employees do if they discover a foreign company they would love to work for, but they want to keep living here in Berlin?
Talk to the company! Ask if they would be willing to consider an EOR solution! If the company is open to the idea, and you have come to an agreement about a potential employment contract, you can recommend they get in touch with Lano. And if the company is interested, we will work with them to organise everything they need to employ you.
How does Lano support employees during this process?
Once the employee and the company have agreed on the job, scope of employment, salary, and other benefits, we take over. We provide an employment contract in conformance with German law that complies with the conditions that employer and employee agree upon, and make sure that the contract is legally valid. The employee doesn’t have to keep going back and forth with the company, or deal with the bureaucracy that requires a lot of expertise no matter where you are. And it’s free for employees, because the company assumes 100% of the costs.
And how do freelancers benefit from Lano?
Well, they get all the same benefits as employees. Plus, Lano offers freelancers a free tool for managing customers, recording their hours and generating invoices that fulfil legal requirements around the world. Lano allows freelancers to manage all their administrative tasks on a single platform.
And if working for a company turns out to be especially lucrative, we make it easy to switch from freelancing to employment.
What is it about Berlin that makes it such a great place to live?
Berlin is easily the most international city in Germany – it’s a truly cosmopolitan place. The city is really diverse. Life is never boring. It offers lots of entertainment and so many family activities – plus, childcare is free and the school system is great. We are very happy here, particularly since the tech sector is growing, which is good for our business. Berlin has an exciting future to look forward to.
