What is an Employer of Record in Colombia? Here Is Everything You Need to Know
An Employer of Record in Colombia allows companies to hire full-time employees without establishing a local legal entity. Instead of registering a subsidiary and navigating Colombian labor and tax regulations independently, businesses can employ talent through a locally registered employer.
This model ensures compliance with Colombian labor law, reduces employment risk, and enables faster market entry. Companies gain access to Colombia’s skilled and bilingual workforce while maintaining operational control of their teams.
What is EOR?
An Employer of Record is a third-party company that becomes the legal employer of your workforce in Colombia.
The EOR is responsible for the formal employment relationship, including contracts, payroll, tax withholding, and statutory benefits.
Your company manages the employee’s daily responsibilities, performance expectations, and deliverables.
The EOR manages employment compliance. You manage the work.
What Are Employer of Record (EOR) Functions and Responsibilities?
In Colombia, the Employer of Record assumes responsibility for meeting all legal employment obligations under local labor regulations.
The EOR manages:
• Employment contracts compliant with Colombian labor law
• Payroll processing and income tax withholding
• Social security and mandatory benefit contributions
• Overtime and wage surcharge compliance
• Leave entitlements and statutory benefits
• Regulatory reporting and documentation
The Client Company manages:
• Job scope and role definition
• Compensation decisions
• Performance management
• Project ownership
• Team leadership
This division of responsibility protects your organization from direct labor law exposure while maintaining operational authority.
Service Scope of an Employer of Record
A Colombia EOR setup typically includes:
• Drafting and maintaining compliant employment contracts
• Payroll processing and tax remittances
• Social security, health, pension, and benefit contributions
• Administration of mandatory employee benefits
• Onboarding and offboarding documentation
• HR compliance support
• Liaison with Colombian government authorities when required
This structure allows companies to operate in Colombia without building local HR, payroll, or legal infrastructure.
What are the Benefits of Employer of Record (EOR)?
Using an Employer of Record in Colombia provides several advantages:
Reduced Employment Risk
Employment obligations are managed under Colombian law by a locally registered employer.
Compliance Monitoring
Ongoing oversight of labor regulations, wage rules, and statutory requirements reduces exposure to penalties.
Cost and Time Efficiency
Companies avoid the administrative burden and timeline associated with entity registration.
Faster Hiring
Employment can begin once a candidate is selected, without waiting for incorporation.
No Local Incorporation Required
Companies can operate compliantly without forming a subsidiary.
When to Use an Employer of Record (EOR)
An EOR in Colombia is appropriate in situations such as:
Entering the Colombian market without setting up a local entity
Testing expansion before committing to incorporation
Hiring full-time employees instead of contractors
Supporting acquisitions or post-merger integration
Building distributed LATAM teams
Requiring a compliant hiring bridge during market evaluation
This model enables structured expansion while maintaining centralized operational control.
How KMC Employer of Record (EOR) Services Work
KMC Teams employs your Colombian workforce under our registered entity.
We manage employment contracts, payroll administration, statutory contributions, HR documentation, and regulatory compliance.
You retain control over hiring decisions, compensation approvals, performance standards, and daily supervision.
Our role is to ensure the employment foundation in Colombia is compliant and properly administered, allowing your leadership team to focus on operations and business objectives.
Our EOR Process
Free Initial Consultation
We align on hiring goals, role requirements, and team structure in the Philippines or Colombia, including salary benchmarks and timelines.
Sourcing & Initial Interview
KMC leverages its employer brand and recruitment network to attract and screen qualified candidates aligned with your requirements.
Contract Signing
Once candidates are approved, KMC prepares compliant employment contracts and finalizes compensation, benefits, and start dates.
Employee Onboarding & Set Up
We provide workspaces, IT infrastructure, and operational support—whether your team works remotely or from one of our managed offices.
Continuous KMC Support and Partnership
Our HR, admin, and IT teams remain available to support both you and your employees throughout the engagement.
Frequently Asked Questions (FAQs)
We have hired 7000+ Employees for over 500+ Companies
Why Companies Choose KMC Teams
• 7,000+ professionals supported
• 500+ client companies
• 86 percent retention rate
• Registered entities in Colombia and the Philippines
• Office, hybrid, and remote work options
• Structured employment oversight across key Colombian markets