Top 5 reasons companies choose an Employer of Record (EOR) in Eastern Europe
- Gegidze • გეგიძე | Marketing
- Aug 20
- 7 min read
Table of contents:
Introduction
Eastern Europe is no longer just the “nearshore” choice for big corporations looking to cut costs.
Let me just say, it’s one of the world’s most reliable hiring markets, a place where companies are finding senior engineers in Poland, fintech specialists in Romania, product managers in Bulgaria, and remote-ready teams in Ukraine that can rival Silicon Valley in both quality and output.
The attraction is obvious: salaries are still 40–60% lower than in Western Europe or the US, while the talent pool is experienced, multilingual, and comfortable working in international teams. In other words, it’s the best of both worlds: high standards at competitive rates.
But here’s the catch. Setting up a legal entity in Eastern Europe is rarely straightforward. Each country comes with its own corporate, tax, and labor laws. That means multiple months of paperwork, compliance headaches, and ongoing costs, before you’ve even made your first hire. For global companies that need to move fast, this complexity can kill expansion momentum.
That’s where an Employer of Record (EOR) changes the game. Instead of waiting 4–6 months to establish an entity, an EOR in Eastern Europe lets you onboard your first employee in days. Payroll, taxes, benefits, and contracts are all managed locally and in full compliance, so you focus on building your team, not navigating bureaucracy.
Reason 1 – Skilled, cost-competitive talent pool
When people talk about Eastern Europe, the conversation usually turns to two things: world-class skills and surprising affordability. And that’s not a coincidence. The region has spent the past two decades investing heavily in STEM education, digital infrastructure, and English proficiency. The result? A workforce that punches well above its weight in tech, engineering, finance, and customer support.
A closer look at the region’s strengths
Poland is now one of the EU’s largest exporters of IT services, with over 400,000 software developers.
Romania has earned a reputation for its deep pool of developers, particularly in fintech and enterprise IT.
Ukraine, despite ongoing challenges, remains a global leader in freelance tech and creative services, with platforms like Upwork ranking Ukrainian specialists among the top worldwide.
Bulgaria has carved out a strong outsourcing sector, attracting multinational companies for customer support, finance, and shared service centers.
The cost advantage of changing hiring math
Hiring from Eastern Europe isn’t just about quality; it’s also about efficiency. Salaries for skilled professionals are 40–60% lower compared to Western Europe or the United States. That means companies can scale teams faster, reinvest savings into growth, and remain competitive without sacrificing expertise.
For instance:
A senior software developer in the US might cost $110,000+ annually.
The same role in Germany averages around $75,000.
In Eastern Europe, you’ll find equivalent talent at $35,000–$45,000.
Multiply those savings across an entire team, and the case for building in the region becomes impossible to ignore.
Why EOR is the smarter entry point
The opportunity is clear, but getting access to this talent pool often gets blocked by the complexity of setting up a local entity. With an Employer of Record (EOR), you sidestep those hurdles. Instead of months of legal work, you can hire vetted mid- to senior-level professionals in days, with employee Benefits, insurance, and workspace.
Reason 2 – Strong economic growth and government reforms
One of the reasons Eastern Europe has become such a magnet for global employers is simple: the region is not standing still. While some parts of the EU wrestle with stagnation, many Eastern European economies are outpacing their Western neighbors, posting steady GDP growth between 3–5% annually (World Bank, IMF). That’s not just resilience — it’s momentum.
Governments are betting on IT and startups
From Warsaw to Bucharest, governments know where the global economy is headed, and they’re making sure local ecosystems are ready.
Poland offers R&D tax credits and startup-friendly programs to fuel tech exports.
Romania has become a hotspot for IT hubs, thanks to generous tax breaks for software developers.
Bulgaria and Hungary run Special Economic Zones (SEZs) with reduced tax burdens for international investors.
This isn’t just policy on paper — it’s a strategy that’s attracting multinational players, VC funding, and an increasing number of high-growth startups.
Digital transformation isn’t a buzzword here
Eastern Europe is modernizing fast. Countries are rolling out digital transformation strategies that expand broadband coverage, invest in innovation parks, and upskill local workforces. Romania’s IT hubs are now some of the most competitive in the EU, while Poland is turning into a serious contender for R&D outsourcing. The takeaway? Businesses can tap into not only affordable labor but also ecosystems designed for growth.
Why EOR is your fast track
Here’s the catch: accessing these benefits usually requires setting up a legal entity — a slow, bureaucratic, and expensive process. With an Employer of Record (EOR), you can plug into these incentives with the compliance checklist for Employer of Record (EOR) services in Eastern Europe.
Payroll, benefits, and taxes are handled locally, while your team is fully protected under local law.
Reason 3 – Strategic location for European and global expansion
Eastern Europe isn’t just a hiring market, it’s a launchpad. Positioned at the crossroads of Western Europe, the Balkans, Russia, and Central Asia, the region gives companies access to some of the world’s most important trade and business corridors.
A logistics and trade powerhouse
Eastern Europe benefits from:
Road and rail networks that integrate seamlessly into the EU’s transport system.
Access to the EU single market means smoother trade and business flows across borders.
Expanding air cargo and port infrastructure is making it easier to move goods, services, and talent across continents.
For global teams, this isn’t just geography; it’s operational efficiency.
Time zones that actually work for you
Teams based in Eastern Europe are uniquely positioned to bridge EU and global time zones. A developer in Poland can collaborate with colleagues in London in the morning and still jump on a late-afternoon call with San Francisco without working overnight. This flexibility is one of the region’s underappreciated competitive advantages for distributed teams.
Why EOR makes expansion smarter
There are two paths: EOR vs setting up an entity in Eastern Europe
Normally, setting up entities across multiple countries just to test markets would drain both budget and time.
With an Employer of Record (EOR), you can hire employees in Eastern Europe within days, not months. That means you can test expansion strategies, build regional hubs, and scale into new markets without being locked into the bureaucracy of entity setup.
Reason 4 – Established remote work culture & outsourcing expertise
Eastern Europe isn’t new to the global talent game. For decades, the region has been a trusted partner for outsourcing, nearshoring, and global service delivery. From IT development centers in Poland to multilingual BPO hubs in Romania and finance back offices in Bulgaria, Eastern Europe has built a reputation as one of the most reliable regions for distributed work.
Remote-first isn’t a buzzword here; it’s a standard
Because so much of the region’s workforce already operates with international clients, professionals are well-versed in remote-first tools, agile methodologies, and cross-border collaboration. Add to that strong English proficiency (and often German, French, or Russian as second languages), and you get teams that can slot seamlessly into global operations.
Lower attrition, stronger retention
Unlike many Western tech hubs, Eastern Europe tends to see lower workforce turnover. That means companies don’t face the same hiring churn or sky-high salary bidding wars you see in Silicon Valley or London. The result? Stable, long-term teams that are motivated to grow with your projects rather than constantly scanning for the next job.
Reason 5 – Cost-efficient, flexible market entry with EOR
Expanding into Eastern Europe sounds exciting until you hit the paperwork. Setting up a legal entity in just one country can take 4–6 months. Now multiply that by three or four markets, and suddenly your “quick expansion plan” is buried under legal fees, incorporation costs, and months of delay.
EOR: Up and running in days
An Employer of Record (EOR) flips this script. Instead of waiting half a year, you can hire employees in days. Contracts, payroll, taxes, and employee benefits are all handled by a local provider who already knows the rules of the game. You get compliance from day one without building the infrastructure yourself.
Scale without the baggage
Markets shift. Teams need to grow, or sometimes shrink. With a traditional entity, that means costly restructuring, winding down offices, or paying lawyers to shut everything properly. With an EOR, you keep it simple: add or reduce headcount as needed, without sunk costs or exit headaches.
Why this matters for global teams
For companies testing Eastern Europe for the first time, an EOR is not just cost-saving, it’s risk-saving. You can explore talent pools in Poland, Romania, or Bulgaria, validate your team’s performance, and then decide whether to go deeper with a permanent entity later. Until then, your hiring model remains fast, compliant, and flexible.
Conclusion
Eastern Europe is no longer a “back office” destination; it’s a frontline growth market.
You’ve got the ingredients every scaling company looks for:
A skilled, cost-competitive talent pool that rivals Western markets.
Strong economic growth and pro-business reforms that reward investment.
A strategic location at the crossroads of Europe and global markets.
An established remote work culture with proven outsourcing expertise.
And most importantly, cost-efficient entry with EOR, giving you speed and flexibility without legal headaches.
For global decision-makers, the choice is clear. An Employer of Record in Eastern Europe is the fastest, safest, and most cost-effective hiring model.
