Employer of Record (EOR) services: Hiring employees in Costa Rica

Planning to hire in Costa Rica? Here’s how an EOR can help.

Costa Rica, a Central American gem known for its political stability, economic prosperity, and stunning natural beauty, offers a favorable business environment. With a highly skilled workforce and a commitment to sustainable development, Costa Rica has become an attractive destination for employers that want or need to grow globally.

If you’re looking to expand your business into Costa Rica, an Employer of Record or EOR can help you navigate the local labor laws and streamline your hiring process. By partnering with an EOR, you can quickly and efficiently hire talent in Costa Rica without the need to establish a legal entity.

An EOR acts as the legal employer for your Costa Rican workforce, handling all HR and compliance responsibilities, while you maintain control over day-to-day operations and strategic decision-making.

Why choose an EOR for hiring in Costa Rica?

Small and medium-sized enterprises aiming for rapid global expansion into Costa Rica may lack the in-house expertise and resources to navigate local labor laws and regulations and make new hires in Costa Rica. By partnering with an EOR, businesses can streamline HR processes and focus on core competencies.

An EOR offers the following benefits:

• Quickly hire and onboard top talent in Costa Rica without the complexities of local labor laws.
• Streamline HR processes by outsourcing payroll, benefits, and compliance to the EOR.
• Ensure full compliance with Costa Rican labor laws and tax regulations, minimizing legal risks and penalties.
• Delegate HR and compliance responsibilities** to the EOR, allowing you to focus on your core business activities.

An EOR assumes the role of legal employer for your Costa Rican workforce to take care of all HR, payroll, and compliance responsibilities. This empowers you to focus on your business while the EOR sees to it that your employees are compliant with local labor laws and regulations.

Choosing between an EOR and PEO in Costa Rica

Businesses have two main choices to rapidly enter Costa Rica as employers: an EOR and a professional employer organization (PEO). Understanding the big differences between an EOR and a PEO is paramount to making an informed decision.

An EOR is the obvious option for any employer who wants to offload all compliance-related risks with regard to employment law in Costa Rica.

How to select the right EOR provider in Costa Rica

Choosing which EOR is best as a partner in Costa Rica is crucial for ensuring seamless global expansion. A poorly chosen EOR can lead to compliance issues, unnecessary costs, and a negative impact on your workforce.

It’s essential to consider the EOR’s understanding of Costa Rican labor laws, regulations, and cultural nuances. Additionally, evaluate the EOR’s ability to provide reliable customer support and dedicated account management. Transparent pricing and a clear understanding of the total cost of ownership are also essential factors.

Here’s what to look for:

• Legal compliance: The EOR must have a deep understanding of Costa Rican labor laws, regulations, and cultural nuances. Look for a provider with a proven track record of handling industry-specific compliance challenges in Costa Rica.
• Customer service: A reliable EOR should offer exceptional customer support, including dedicated account managers and timely responses to inquiries.
• Transparency pricing: Avoid hidden fees and unexpected costs. Choose an EOR with clear and transparent pricing models.
• Total cost of ownership: While initial costs are important, it’s crucial to consider the long-term value and potential hidden costs associated with an EOR provider. Avoid choosing a low-cost provider that may compromise on quality of service or compliance. Instead, invest in a reliable EOR that can deliver exceptional value and minimize risks.

How EOR services work in Costa Rica

Step 1: Send that contract over

Once you’ve found a great candidate and a good EOR, a locally compliant employment contract can be generated quickly. Multiplier’s automated HR functions can generate contracts fully compliant with Costa Rican labor law in under five minutes. You then have the opportunity to customize terms such as job responsibilities, working hours, remuneration, and termination conditions. Once everything is all set, Multiplier will securely send the contract for signature, streamlining the onboarding process.

Step 2: Enhance compensation with competitive benefits

It’s advisable to add a competitive benefits package. You don’t have to comb through a slew of local vendors yourself. The EOR will make it easy to choose from various locally available packages.

Step 3: Get all your documentation in order

Next, you’ll need the new hire’s tax and banking information in order to set up payroll. An EOR like Multiplier will automatically gather this information and enter it into the payroll system. Multiplier will then handle all required documentation directly. This helps to ensure a smooth process free from the bother of paperwork.

Onboarding employees in Costa Rica may seem like a mountain to climb. In reality, however, an EOR makes it an easy hike.

Step 4: Run payroll for employees based in Costa Rica

Payroll processing for employees based in Costa Rica can be complex. It necessitates understanding very specific tax rates and contributions. Employing peopl through an EOR like Multiplier addresses these challenges. Accurate and timely payments occur as Multiplier handles all local taxes, contributions, and withholdings. Through Multiplier’s global payroll solution, it is possible to run payroll for all global employees from one place. Gone is the need to engage with countless local vendors.

Step 5: Manage your employees and leave HR compliance to the EOR

Multiplier handles onboarding post-hire for you. New employees in Costa Rica receive their pay the first time and every time after that punctually and calculated accurately for compliance with all benefits, taxes, and social contributions. Multiplier handles all compliance, too, should an employee in Costa Rica require termination or decide to leave voluntarily.

Moving forward with Multiplier EOR in Costa Rica

To expand quickly into Costa Rica, it is highly recommended that businesses turn to an EOR to outsource HR and compliance functions. This streamlines operations and mitigates risks so that businesses can focus on their core business and strategy.

Multiplier’s Employer of Record (EOR) services are comprehensive. They empower you to expand as an employer into Costa Rica to hire top talent without establishing your own local legal entity. They ensure problem-free, rapid hiring and onboarding and greatly facilitate HR-related employee management: The results are locally compliant contracts, well-managed payroll, and a range of customizable benefits tailored to Costa Rican norms.

Book a demo today to learn how Multiplier can help you achieve your expansion into Costa Rica.