Strategic guide
EoR Luxembourg™ — strategic decision guide.
A decision framework for companies considering an Employer of Record in Luxembourg.
Decision tree
- Do you have a stable, multi-year hiring plan? → consider a subsidiary.
- Are you testing the market with one or two roles? → EoR is the natural answer.
- Is the role a senior fractional executive? → EoR works, watch the autonomy criteria.
- Is the assignment limited in time and motive? → temporary agency work is a fit.
- Does the worker need representation powers? → direct employment is preferable.
When EoR is a good fit
- Foreign company hiring its first employee in Luxembourg
- Cross-border worker with complex tax / social security treatment
- Project missions, interim management, fractional executives
- Market test before committing to a full subsidiary
- Repatriating a long-term contractor under a compliant employment relationship
When it isn't
- Long-term employment of a stable team — a subsidiary becomes more efficient
- Roles requiring strong representation powers
- Sectors where collective agreements impose direct employment
- Public-sector procurement requiring local establishment
Pre-signature checklist
- Identify the applicable collective agreement
- Validate work and residence permits where applicable
- Document the operational direction (client) vs legal employment (EoR)
- Quantify employer cost (gross + employer contributions + EoR fee)
- Anticipate end-of-assignment costs (notice, severance, paid leave)
- Set up audit trail for ITM / CCSS / ACD
Cost structure
Total employer cost typically combines: gross salary (~100), employer social contributions (~13-15%), EoR management fee (flat per month or % of payroll). Cross-border setups may add A1 certificate handling and dual reporting where telework occurs across borders.
Exit strategy
Plan the exit on day one: termination of the EoR contract, transfer to a subsidiary if the project scales, or end-of-assignment indemnities. Document the operational direction consistently throughout the assignment to avoid requalification at exit.