Question 1

Can a foreign company remain the legal employer of staff working in Germany?

Accepted Answer

Yes. A foreign company can remain the legal employer and organise German payroll through a local provider. The structure requires the relevant German employer registrations, domestic representation for social security obligations and clear ownership of recurring payroll inputs and approvals.

Question 2

Who is the legal employer when a payroll provider processes German payroll?

Accepted Answer

The company named as employer in the employment relationship remains the legal employer. The payroll provider performs the agreed calculation, reporting and payroll administration services within the defined service scope.

Question 3

When does an own German entity become the stronger operating model?

Accepted Answer

A company-owned German entity becomes particularly relevant when the group plans a durable German organisation, seeks direct local employer control and needs a corporate platform for a broader workforce or continuing business activity.

Question 4

How does an EOR affect control over the employment relationship?

Accepted Answer

The EOR holds the formal employer role. The international company manages the employee’s day-to-day contribution through the agreed structure, while employment administration and formal employer actions follow the EOR relationship and the applicable German framework.

Question 5

Which model supports a later transition to direct German payroll?

Accepted Answer

Both an EOR entry structure and direct employment can lead into a later payroll model through a company-owned German entity. Transition quality depends on early coordination of the employer change, contracts, registrations, employee communication, payroll history and effective dates.

Should an international company use an EOR, its own entity or a payroll provider in Germany?

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