Choose an employer of record (EOR) if you want to recruit, manage, and retain developers abroad yourself, and only hand off the contract and payroll in their country. Choose a nearshore partner if you want a team that comes with its own support, replacements when someone leaves, knowledge retention, and an office. The difference is who carries the employer's work that starts after the contract is signed.
The question comes up because good developers are still hard to find. According to Eurostat, 57.5% of EU companies that recruited or tried to recruit ICT specialists in 2023 had difficulty filling those roles. In the Netherlands, where we're based, the employee insurance agency UWV found that 47% of vacancies in the information and communication sector were hard to fill in autumn 2025, down from 54% two years earlier.
An employer of record and a nearshore partner both give you access to people in another country. What you have to do yourself afterwards is very different. Below, we set out the practical differences. We leave costs and legal details aside, since those need your own adviser.
What an employer of record takes care of
An employer of record is the formal employer of someone who lives and works in another country. The EOR signs the employment contract in that country, pays the salary, and handles payroll and the local obligations that come with being an employer. You decide what the developer works on and how the work is done.
In practice, it usually goes like this:
- You find and select the candidate.
- The EOR hires the candidate on a contract under local law.
- The EOR pays the salary and keeps the records.
- You direct the work, hold the reviews, and look after development.
That makes you the employer and manager in practice, while the EOR is the employer on paper. With an employer of record, matters such as compliance and security stay with you or run through the EOR, depending on what you agree. An EOR often works well when you already know who you want to hire, for example a developer you've worked with before or someone who is moving abroad and wants to keep working for you.
What a nearshore partner provides
A nearshore partner is a software company in a nearby country, with its own engineers on staff, its own team leads, and its own office. You get engineers who join your team, or a complete team that works on your product together. Our article what is nearshoring explains how that model works and when it suits software development.
You decide what gets built, in what order, and to which quality standards. The partner looks after the people. In concrete terms, that means:
- A team that already exists and is used to working together
- Team leads and senior engineers who onboard and support new colleagues
- Replacements when someone falls ill for a long time or leaves
- Fixed agreements on documentation and knowledge sharing
- An office with workstations, equipment, and access control
A nearshore partner works in the same or an adjacent time zone. Your team can keep the same working day, meetings, and release moments as your own developers.
Employer of record or nearshore partner: the differences side by side
The table below shows who carries each task. It's a general picture, and the exact split depends on your contract with the EOR or partner.
| Topic | Employer of record | Nearshore partner |
|---|---|---|
| Legal employer | The EOR | The partner |
| Recruitment and selection | You | The partner, with your approval |
| Priorities and content of the work | You | You |
| Coaching, support, and career growth | You | The partner |
| Replacement after illness or departure | You recruit again | The partner |
| Knowledge retention within the team | You | The partner, together with you |
| Workplace and local colleagues | Usually remote, without colleagues | An office with a team |
| Contract and payroll | The EOR | The partner |
Most rows come down to one question: who has the time and the people to act as an employer in another country.
Who recruits, manages, and handles turnover
With an employer of record, you do the recruiting yourself. You write the job ad, look for candidates in a market you may not know well, run the interviews, and test technical skills remotely. Then comes onboarding, usually without colleagues in the same country to help.
Management is yours as well. That includes weekly one on one meetings, performance reviews, training plans, and attention for someone who works alone from home. For one developer, that's manageable. With five or ten people spread across several countries, it takes a large share of your managers' time. You'll also need to know and plan around each country's public holidays, working hours, and customs.
When someone leaves, recruitment starts again, and it's on you. A shortage of applicants is the biggest hurdle: Eurostat reports that for 43% of companies struggling to fill ICT specialist roles, a lack of applications was the main difficulty. With a nearshore partner, the search sits with the partner, which can often draw on an existing team or network. You meet the people it proposes and give your approval.
Keeping knowledge and continuity
Knowledge about your software lives largely in the heads of the people who work on it. With an employer of record, developers often work separately, each in their own country. If one leaves, whatever wasn't written down leaves too. In that model, you organize documentation and knowledge sharing yourself. That takes clear agreements on what gets recorded, where it's kept, and who keeps it current when the team is under pressure.
A nearshore team has more overlap. Colleagues know each other's code, review each other's work, and share one office. When a new engineer joins, they learn the product from the people who stay. The partner has a stake in keeping the team stable, because continuity is part of the service you're buying.
Organizations make this call more deliberately, one part of the work at a time. In the Deloitte Global Outsourcing Survey 2024 of more than 500 executives, 80% said they plan to maintain or increase their investment in outsourcing. At the same time, 70% had brought some previously outsourced work back in house over the past five years. Outsourcing is common in the Netherlands in particular: Eurostat found that in 2023, external suppliers performed ICT functions for 84% of Dutch companies.
When an employer of record fits, and when a nearshore partner does
An employer of record fits best in these situations:
- You have a specific person in mind who lives in another country.
- You have managers with experience recruiting and coaching remotely.
- You want people tied directly to your own organization.
- You need a few roles, spread across different countries.
A nearshore partner fits better in these situations:
- You need several developers who work together as a team.
- Your managers need their time for product and architecture.
- You want replacements and knowledge retention taken care of.
- You want people in one place, in your own time zone, that you can visit.
If you're unsure, look at how much time your own organization has for remote recruitment and support. That matters more than the headcount or the country. Many organizations combine both, for example one specialist through an EOR and a stable development team through a partner. If you go with a partner, use these nine questions for choosing a software company to compare providers.
How Isatis sets up nearshore teams in Sarajevo
Isatis is a nearshore partner with offices in Nijmegen, in the Netherlands, and Sarajevo, in Bosnia and Herzegovina. Our engineers are employed by us and work from our own office in Sarajevo. Bosnia and Herzegovina is in Central European Time, so for clients across much of Western and Central Europe, your team works the same hours you do.
With staff augmentation, we add engineers or a complete team to your organization. You keep ownership of the product, the priorities, and the code. We handle recruitment, onboarding, HR, and retention, and we make sure documentation and knowledge sharing happen within the team.
We've been building software for more than 30 years, with 30+ engineers and more than 100 projects, from maintenance, repair, and overhaul (MRO) software for aviation to a subsidy administration platform and RFID in the supply chain. Isatis is ISO 9001 and ISO 27001 certified. Read more about us or schedule a call to talk through which model fits your situation.
Frequently asked questions
What is an employer of record?
An employer of record is a company that becomes the formal employer of a worker in another country. It handles the contract, salary payments, and records under local rules. The organization that uses the worker decides on the work and manages the worker day to day.
Who is the employer with a nearshore partner?
The partner itself. The engineers are employed by the nearshore partner and work from its office. You sign an agreement with the partner covering the team's work for you.
Who manages the developers with a nearshore partner?
You set the priorities and the content of the work, usually through your product owner or lead developer. The partner looks after the people, including coaching, career growth, replacements, and the workplace.
Can you combine an employer of record and a nearshore partner?
Yes. Some organizations hire one or two specialists through an EOR and have a stable team working through a nearshore partner. If you do, be clear for each model about who recruits, who provides support, and where knowledge about your software is recorded.
