Startup Expansion: How Australian Founders Can Grow Globally

Australia’s startup ecosystem has matured into a vibrant hub of innovation, attracting impressive funding rounds and producing world-class companies. But with a population of just over 27 million, the domestic market alone often isn’t enough to sustain high-growth ambitions. For Australian founders, expanding globally into competitive markets like the United States is no longer a luxury; it’s a strategic necessity.

The opportunity to access larger customer bases, deeper capital pools, and more diverse talent is immense. Yet, international expansion is not without its challenges. From navigating complex foreign labor laws to managing remote teams and complying with unfamiliar tax regimes, many startups struggle to scale across borders.

This blog explores how startup founders in Australia can simplify that journey. We'll unpack the key differences between setting up your own legal entity abroad versus partnering with an employer of record (EOR), how an EOR can help reduce risk while accelerating expansion, and what to look for when choosing the right EOR partner to support your business goals.

Owned entities vs. employer of record

When expanding internationally, Australian startups are typically faced with two options: setting up their own foreign legal entity or working with an employer of record (EOR). Each path enables hiring in overseas markets, but they differ dramatically in cost, complexity, compliance risk, and time to market.

What is an owned entity?

An owned entity refers to a wholly owned subsidiary or registered branch of your Australian startup that’s legally incorporated in the target country. This setup gives you full control over local operations, bank accounts, tax filings, and employment contracts.

However, establishing an entity is costly, time-consuming, and resource-heavy, especially in markets like the US, where state-by-state tax obligations and employment laws vary widely. For early-stage startups or those testing new markets, this level of commitment may be premature.

What is an employer of record (EOR)?

An employer of record is a third-party organization that legally employs workers on your behalf in a foreign country. While your startup continues to manage overall business strategy and your employees’ daily tasks, the EOR handles local compliance by drafting compliant contracts, running payroll, administering benefits, remitting taxes, and ensuring adherence to local labor laws.

This model enables startups to hire and operate in new markets quickly and legally without setting up a local entity. It’s ideal for early expansion and hiring specialized talent abroad before making a full-scale commitment.

Key differences between owned entities and an EOR

How an EOR supports startup expansion

For Australian startups, expanding beyond local borders can unlock immense opportunity, but it also introduces complex hurdles around compliance, cost, and culture.

Partnering with an EOR helps founders overcome these barriers by handling the heavy operational and legal lifting of hiring abroad. Here are five key ways an EOR supports startup expansion.

1. Achieve cost-efficient business growth

Expanding globally doesn’t have to drain your startup’s capital runway. Establishing and maintaining a foreign entity comes with high fixed costs: registration, accounting, insurance, and ongoing compliance.

With an EOR, founders can scale internationally quickly without upfront setup costs. To partner with an EOR, businesses pay a simple monthly fee per employee, converting expansion costs from fixed to variable. This allows early-stage founders to test new markets, build diverse and specialized global teams, and validate demand before committing to permanent infrastructure.

2. Access top talent worldwide

Australia’s tight labor market and smaller talent pool often make hiring specialized roles, such as experienced engineers or US-based sales leaders, challenging. An EOR removes geographic barriers by enabling compliant hiring anywhere in the world.

By partnering with an EOR, startups can attract top global talent and offer competitive, locally compliant compensation packages without needing in-house HR or legal expertise in each country. This levels the playing field for Australian companies competing globally for the best people.

3. Protect your startup by reducing compliance risk

Every market has its own web of labor laws, tax regulations, and reporting obligations. For example, US employment operates on “at-will” terms and state-specific rules that differ dramatically from Australia’s national Fair Work system.

An EOR mitigates these risks by acting as the legal employer of record, managing local compliance, statutory benefits, and payroll filings. This means the startup isn’t exposed to penalties for misclassification or non-compliance, two of the biggest risks when hiring abroad independently.

4. Gain strategic flexibility and scalability

Startups thrive on agility, but international operations can make that agility hard to maintain. Setting up owned entities locks founders into long-term commitments that are expensive to reverse if market conditions change.

An EOR provides built-in flexibility, allowing startups to scale up or down quickly as they test new markets. If a team or product line doesn’t gain traction, the company can exit that market without the cost or complexity of winding down a legal entity. Conversely, if a new region shows promise, your startup can easily expand your workforce under the same EOR framework. This flexibility gives Australian founders the freedom to experiment globally, learn fast, and adapt their strategy, a critical edge in competitive global markets.

5. Streamline operations and focus on growth

Running international payroll, benefits, and compliance internally can consume valuable time and resources that startups should spend on growth initiatives.

An EOR streamlines expansion by handling the administrative and regulatory complexity, from onboarding to offboarding. Founders maintain full operational control over their team’s work, while the EOR takes care of the paperwork behind the scenes. This allows startups to stay lean, agile, and focused on building products, attracting customers, and generating revenue without being slowed down by red tape and administrative tasks.

How to choose the right employer of record

Choosing the right employer of record is one of the most important decisions a startup can make when expanding globally. A strong EOR partner not only ensures compliance but also acts as an extension of your team, helping you attract top global talent, manage complexity, and scale efficiently.

Here are the key steps Australian startups should take when selecting the right EOR provider for their business.

1. Evaluate the provider’s global coverage and local expertise

Start by confirming that your EOR can support hiring in the countries and regions you plan to enter. Beyond the number of countries, it’s important to also look for local expertise, a strong understanding of regional employment laws, tax systems, and cultural nuances.

Pay attention to whether the EOR has a team of in-house experts or whether they outsource to in-country partners. An EOR built on in-house experts often means that processes are more standardized and support is easier to reach, whereas in-country experts often have varying processes that can make scalability difficult in the long run.

2. Assess the level of compliance and risk management

Your EOR should be a compliance powerhouse. That means managing employment contracts, worker classification, payroll taxes, benefits, and statutory filings according to local laws. Ask potential partners how they stay current with regulatory changes and whether they act as the legal employer of record (not through third-party intermediaries).

This is especially important for startups who are unfamiliar with international labor frameworks. Deel, for example, owns its local entities in most major markets, reducing the risk of misclassification and ensuring you maintain full legal protection.

3. Compare pricing across providers

While EOR pricing models are generally predictable (often a flat fee per employee per month), not all are equal. Some providers add hidden charges for contract changes, terminations, or benefits administration. Founders should look for clear, transparent pricing that scales as the team grows without surprise fees.

Additionally, consider the total cost of ownership. The right EOR saves you not only money but time and internal resources by handling compliance and payroll end to end.

4. Review employee experience and benefits options

An often-overlooked factor in choosing an EOR is the experience it provides to your employees. A seamless onboarding process, reliable payroll, and quality benefits all contribute to retention and satisfaction. The best EORs offer benefits like equity that help startups stay competitive with larger global employers.

5. Look for scalable technology and partnership

The right EOR isn’t just a service provider. It’s a partner with a scalable platform that grows with your business. Take time to evaluate the technology behind the service. Does it integrate with your HR, payroll, and accounting tools? Can you onboard, pay, and manage workers globally from a single dashboard? Ideally, the EOR partner you hire today will also be able to support your business as it grows and evolves in the future.

You should choose an EOR that is a strategic partner, not just an administrative vendor. Your provider should be responsive, proactive, and capable of advising you through evolving compliance or HR challenges. For Australian startups entering new markets, local customer success support and real-time guidance can make all the difference.

Expand your Australian startup with Deel EOR

Global growth is within reach for every Australian startup, but success depends on expanding strategically. From navigating complex employment laws and compliance risks to managing payroll, benefits, and cultural nuances, scaling internationally comes with challenges that can slow momentum and stretch resources.

Deel empowers startups to expand into new markets by providing EOR services in 150+ countries. We’ll hire and onboard employees on your behalf, taking care of payroll, tax, and compliance in a unified, easy-to-use platform.

Request a 30-minute demo to learn more about how Deel EOR can help your Australian startup expand into new markets.