Hiring international employees doesn’t have to be costly or complicated
Diverse, global teams are more innovative and resilient. But when it comes to hiring international employees, setting up a subsidiary can be expensive. With the sometimes onerous upfront financial requirements and lengthy set-up process, it’s not always the best solution unless you’re sure you’re staying in that location for the long haul.
Still, if you’ve found excellent talent abroad, what’s the solution? We’re here to discuss our top three options for hiring international employees, along with the essential considerations for doing so compliantly and cost-effectively.
1. Employer of Record (EoR)
An Employer of Record is a third-party employment organization that bridges the gap between you and your international employee. They’re your experts in local labour laws and tax compliance. The EoR takes care of the hiring, the onboarding process, and global payroll, essentially setting up an international entity on your behalf.
This takes on much of the legal and tax risk, allowing you to focus on recruiting and hiring international employees. An EoR is the solution of choice for companies seeking to go truly global. In WorkMotion’s case, using our EOR service means accessing over 160+ countries.
Who should use an EoR?
- Companies looking to test new markets and are unwilling to commit to one location straight away.
- Companies lacking local expertise often struggle when hiring international employees.
- Companies are seeking to hire international employees quickly and compliantly.
- Companies seeking international hiring support often require assistance with onboarding and payroll.
Learn more about WorkMotion’s Employer of Record
2. Direct Employment
Another way to hire international employees is through Direct Hiring. Unlike an EoR, Direct Hiring establishes a local presence in the form of a foreign company, not a legal entity. You remain in complete control of the onboarding process. Initial start-up can take up to six weeks.
However, once set up, companies can continue hiring employees in foreign countries very quickly and cost-effectively.
There are distinct advantages to Direct Employment. First of all, you establish a direct relationship with your employees, and unlike establishing a legal entity, companies can employ numerous employees with less commitment.
Who should use Direct Employment?
- Companies that have specific international hiring plans and are not looking for true global expansion
- Companies seeking to hire multiple international employees from the same location but do not wish to establish a local entity.
Learn more about Direct Hiring
3. Freelancers or Independent Contractors
Another option is to consider hiring international freelancers legally or independent contractors. This option is especially useful in fluctuating international markets or when operating on a project-by-project basis, as the commitment is different.
Different from hiring employees in other countries, freelancers or contractors work to their own schedule and supply their own equipment — they are, in fact, self-employed and not employed by the company at all.
Risks associated with hiring international freelancers legally or independent contractors are relatively low. However, their role must be clearly defined to avoid the risk of “fake self-employment.” If you’re expecting your freelancers to operate within the bounds of regular employment, particularly for an extended period of time, then you should employ them.
Who should use Freelancers or Independent Contractors?
- Companies looking to build and scale up their business quickly
- Companies looking for expertise on a short-term or project basis
- Companies requiring flexibility
Understanding Legal and Compliance Needs
When planning to hire international employees, compliance must always come first. Each country possesses distinct labor regulations, tax codes, and reporting requirements. Noncompliance can result in penalties, back taxation, or reputation impairment.
To hire a foreign employee without a local entity, companies must be familiar with the requirements for visas, data protection laws, and social security. Hiring a global employment provider can simplify the process while keeping up with requirements in every jurisdiction.
When hiring international employees, it is essential to clearly specify job functions, salaries, and termination procedures in the contracts to prevent miscommunication. This protects both the company and the workers against legal problems.
How to Hire International Contractors
To learn how to hire international contractors, start by considering countries that allow flexible contractor arrangements. Always draft written contracts that outline project scope, deliverables, and payroll timing.
Be sure to comply with local tax laws, as other territories consider long-term contractors to be employees. Hiring with a third-party platform or an Employer of Record helps bring on staff based in another country — essentially, hiring someone in another country – without violating local labor laws.
This way, companies can stay compliant in hiring international freelancers legally. Moreover, it also helps in answering “how to hire freelancers abroad without needing a local business entity?” Not just that, it reduces time and cost and provides legal protection.
Advantages of Hiring International Employees
When hiring employees in foreign countries, you gain access to a world of diverse talent. International recruiting enables companies to operate 24/7 across different time zones, foster innovation, and enhance cultural competence within their teams.
International companies achieve a competitive advantage by leveraging local knowledge and market insights. Also, teleworking saves offices on overhead and extends brand coverage in the global markets.
Being able to hire global employees also enhances resilience by spreading your workforce geographically, insulating your company from localized interruptions.
Challenges in Hiring International Employees
While it’s easier than ever to hire international employees, it comes with challenges that demand careful management. The most common issue is compliance — every country has unique employment, tax, and social security laws. Companies that fail to understand these regulations risk fines and reputational harm.
Payment processing is another challenge. Managing multiple currencies and tax deductions can complicate payroll. Partnering with an Employer of Record can simplify these complexities when you hire global employees or hire employees abroad.
Cultural and communication barriers can also affect productivity. Organizations must invest in training and technology to bridge gaps when hiring employees in foreign countries.
For those seeking an answer to the question, “How to hire freelancers abroad without a local business entity,” the primary challenge is identifying the correct contractor classification. Misclassifying a contractor as an employee can lead to legal consequences.
To overcome these challenges, companies should work with global hiring experts or digital platforms designed for hiring international employees in compliance with relevant regulations. Understanding how to hire international employees strategically is key to building a sustainable and legally sound global workforce.
The Importance of Hiring International Employees the Right Way
Instances of non-compliance with international labor laws and taxes can be very costly. That’s why you must have a strategy about what your hiring goals are and understand the requirements.
Consider Working with an International Hiring Expert
The best way to mitigate potential risk is to relocate it to a safer location. Depending on what best suits your business, an EoR or Direct Employment provider can be that for you.
WorkMotion specializes in hiring international employees and has made it our business to understand everything there is to know about hiring in over 160 countries. Our products are designed to help companies maximize international opportunities and streamline their expansion across borders.
Final Thoughts: Building a Future-Ready Global Workforce
To hire employees abroad effectively, businesses need flexibility, compliance, and strategic foresight. Whether you choose an Employer of Record, Direct Employment, or work with freelancers, the key is to understand your long-term hiring goals.
In today’s connected world, knowing how to hire international employees or how to hire international contractors can help your company scale faster, stay agile, and remain compliant — all without the burden of setting up a physical entity.
WorkMotion continues to support companies that want to hire international employees with confidence, efficiency, and full compliance across borders.
FAQs – How to Hire International Employees
What are the best ways to hire a foreign employee without a local entity?
The best ways to hire international employees include using an EoR provider, Direct Employment solutions, or working with freelancers. These methods enable companies to hire global employees legally and efficiently, eliminating the need to establish a local presence.
How to hire international contractors?
When planning how to hire international contractors, ensure contracts are legally compliant in both countries. Define project terms clearly, and confirm your contractor’s status to avoid misclassification. This helps you answer how to hire freelancers abroad without needing a local business entity.
Is it legal to work with international freelancers or contractors?
Yes, it’s legal as long as you follow tax and labor regulations in both regions. Many companies prefer hiring international freelancers legally to manage projects quickly and cost-effectively while maintaining flexibility.
What are the benefits of hiring employees in foreign countries?
When you hire employees abroad, you gain access to a diverse, global talent pool. It enhances innovation, expands market reach, and allows continuous operations across time zones. Global hiring also helps reduce operational costs.
What’s the easiest way to hire someone in another country?
The most straightforward approach is to work with a trusted EoR or global employment provider. They handle compliance, onboarding, and payroll, allowing you to quickly and legally hire someone in another country without needing to set up a new entity.
