Contractor of Record (CoR)
A third-party entity that officially hires and pays international contractors on your behalf.
What is Contractor of Record (CoR)?
A Contractor of Record (CoR) is a third-party entity that officially hires and pays international contractors on your behalf - ensuring legal classification, compliant contracts, and tax reporting in the contractor's country. Unlike an Employer of Record (EOR), which is used for full-time employees, a CoR is designed for independent contractors. It reduces your legal exposure while streamlining onboarding and global payouts.
How it works
- When hiring contractors across borders, labor and tax laws vary widely. A CoR steps in as the legal counterparty to:
- Issue contracts tailored to the local law
- Manage payments in USD, stablecoins, or local currency
- Classify the worker correctly to avoid misclassification risk
- Generate required tax documents (e.g., W-8BEN, invoices)
- From a compliance standpoint, CoR shields you from legal and financial penalties by absorbing classification liability.
Why it matters
- For global teams scaling fast with freelancers or part-time workers, a CoR enables:
- Compliant hiring without a legal entity
- Faster onboarding in 180+ countries
- Fewer risks of contractor misclassification
- Streamlined payments and documentation
- Local law alignment without internal legal ops
- Sigma offers Contractor of Record services for teams hiring in LATAM, Africa, Southeast Asia, and beyond.
Example
A U.S. design agency wants to pay contractors in Brazil, Kenya, and Vietnam. Instead of managing legal contracts in each country, they partner with Sigma's CoR. Sigma issues compliant agreements, processes USD payments via wallets, and ensures no misclassification risk.
