Global Employment

How EORs Help You Hire International Employees Legally and Compliantly

A step-by-step guide to hiring an international employee and how employer of record services made it easier for companies with compliance guarantees.
Last updated on
June 25, 2024 8:00 AM
10
min read
how-to-hire-international-employees-legally-and-compliantly-with-eor
Wendy Ru
Wendy Ru
Content Lead for Global Hiring and EOR, FlexOS
A Global Hiring Content Lead who dedicates to technologies and practices that enable remote work excellence.

In the day and age of remote work, companies are no longer limited to hiring talent within their geographic location. Experts confirm that dynamic organizations are the future and skills-first hiring is the current way of staying ahead in the competitive business landscape.

However, hiring international employees for their unique skillsets, in addition to the need for suitable recruitment strategies and adaptive recruitment processes, also comes with logistical and legal challenges.

That’s why the more cross-border work and employment become normalized, the more essential EOR services become for businesses.

In this guide, I’ll walk you through the steps to hiring an international employee and show how an Employer of Record (EOR) can make the journey smoother and simpler.

How to Hire an International Employee: 5 Big Steps

Hiring international remote employees can significantly enhance a company’s talent pool, provide access to specialized skills, and offer a competitive edge in the global market. 

However, it ain’t an easy job to hire within the same country as your headquarters because you’re required to set up many employment-related matters from scratch. The processes and regulations that work for local hires may be completely different when you move beyond borders, necessitating a thorough understanding of international labor laws, payroll systems, and compliance requirements. 

Here are the five key steps involved in hiring an international employee:

Steps to Hire International Employees

Step 1: Identify the Type of Employment

First and foremost, it's essential to determine the type of employment you're offering. Are you looking for full-time, part-time, or contract workers? This distinction will guide many of your subsequent decisions, including legal compliance and benefits provision.

Step 2: Establish Effective Recruitment Processes

Finding the right talent is as important as properly bringing them on board. While much of the focus in this article is on the legal hurdles for officially employing international talent, let’s have a friendly reminder that the process begins with effective talent acquisition.

To optimize your global recruitment efforts, consider:

  • Explore niche remote job boards to find candidates who are already familiar with and enthusiastic about remote work.
  • Craft job descriptions and job ads that are clear and appealing to a global audience, specifying any particular requirements such as time zone availability or language proficiency.
  • Be more attentive and focused on skills-based screening, assessments, and interviews to evaluate candidates more effectively.
  • Highlight your company culture in a way that resonates across different cultures, emphasizing what makes your remote team unique and attractive to international talent.

Step 3: Research Local Employment Laws and Regulations

Every country has its own set of employment laws and regulations. It's imperative to understand these laws to avoid legal pitfalls when hiring remotely. This includes knowing about minimum wage requirements, working hours, mandatory benefits, and tax obligations.

Check out our compliance guides for some most sought-after countries for remote hiring: Hiring in Poland, Hiring in Germany, Hiring in the Philippines, Hiring in Vietnam.

There's a few options to hire foreign employees, and the choice depends on many critical factors, including your long-term global expansion plans and the working relationship nature with your remote employees.

If you hire full-time roles, typically, you have to establish a subsidiary or branch office to have the legal right to employ people there, pay local taxes, and follow required procedures with government agencies.

The other option is to hire through an employer of record. An EOR can provide invaluable assistance by signing the contract with your employees on your behalf in the target country, so you don’t have to rush to establish a legal entity while still ensuring that all local laws are adhered to. (We will discuss more later!)

Step 4: Set Up Payroll System and Benefit Plans

When hiring across borders, you’re not just dealing with different currencies and bank systems. You’re navigating a maze of diverse tax regulations, labor laws, and benefit expectations that can vary significantly from country to country. 

Getting this right is about more than just avoiding legal troubles (though that’s certainly important). It’s about building trust with your remote teams and showing them they’re valued, regardless of where they’re located. A well-managed payroll and benefits system demonstrates your commitment to your global workforce and can impact employee satisfaction and retention.

What’s standard practice in your home country might be unusual or even non-compliant elsewhere. You’ll need to consider factors such as:

  • Local tax withholding requirements
  • Mandatory social contributions
  • Currency exchange rates and international banking fees
  • Differences in pay periods and payment methods
  • Varying definitions of compensation (e.g., bonuses, overtime)
  • Local statutory benefits and common supplementary benefits

Step 5: Prepare Effective Onboarding and Integration

Onboarding and integration are key to the success of your international hires, especially when you rarely meet in person. This process not only makes sure everything’s legal but also helps new employees feel like part of the team right from the start.

First off, you need to handle the paperwork. This means making sure work permits and visas are sorted, tax forms and payroll are set up correctly, employment contracts are clear, and you’re following local laws. Getting these administrative tasks right helps your employees feel secure and legally protected.

Next, focus on making your new hire feel welcome and part of the company culture. This includes offering a thorough orientation, setting them up with a mentor, having regular check-ins, being culturally sensitive, encouraging team integration, and setting clear expectations. By covering both the legal stuff and helping them fit in, you set your international employees up for success and long-term engagement with your company.

The Pros and Cons of Hiring Globally

Cross-border hiring in the embracement of remote work opens up new possibilities but also comes with its own set of challenges. Here's a summary of global employment’s pros and cons to help you navigate this strategic move effectively.

Benefits:

  • Access to a Larger Talent Pool: You can find highly skilled professionals who might not be available locally.
  • Diverse Perspectives: Bringing in employees from different cultural backgrounds can lead to more innovative ideas and solutions.
  • Global Market Insights: International employees can provide valuable insights into their local markets, aiding in global expansion efforts.

Challenges:

  • Compliance Issues: Ensuring compliance with different employment laws and regulations can be complex and time-consuming.
  • Higher Cost-per-Hire: The initial costs of setting up international hires can be higher due to legal, administrative, and logistical expenses.
  • Integration Difficulties: Integrating international employees into the company culture and ensuring effective communication can be challenging.

Global Employment Made Easy with EOR Partner

As we discussed, hiring international employees involves not only the typical recruiting processes but also navigating complex legal requirements. EOR services are born out of the real need to streamline global hiring. 

They are designed to help companies effortlessly handle the legal and compliance aspects, making hiring from anywhere no longer impossible.

Key elements of an Employer of Record
EOR Model.

What Does EOR Stand For in Recruiting?

An Employer of Record is a third-party organization that becomes the legal employer of your international employees.

When you hire through an EOR, your international workers are legally employees of the EOR, but they work for you. This arrangement means that while the EOR handles all legal and administrative responsibilities, you retain control over their day-to-day tasks and performance. 

This setup ensures compliance and reduces administrative burden, allowing you to focus on finding and managing talent without worrying about legal complications.

For more details, check out our guides on EOR Meaning, How an Employer of Record Works, and Employer of Record Benefits.

Here’s how an EOR makes global employment easy:

EOR Helps Classify Employment Status

Worker Classification Tool Example - Oyster HR
Worker Classification Tool Example - Oyster HR

EOR companies have integrated employee classification tools in their technology platform to help you double-check the employment status before finalizing employment contracts.

This safeguards companies from worker misclassification risks and ensures proper handling of subsequent processes.

EOR Automates Payroll Setup and Management

Payroll System Example - Deel EOR
Payroll System Example - Deel EOR

Handling payroll for international employees involves navigating different tax systems, currencies, and regulations. An EOR automates this process, ensuring that payroll is set up correctly and managed efficiently.  

They also handle tax deductions and social security contributions and ensure that employees are paid on time and in compliance with local laws.

Additionally, many EORs offer contractor management software, which simplifies the process of managing and paying contractors across various regions, within the same system. 

EOR Offers Localized and Competitive Benefits

Employee Benefit Package Example - Papaya Global
Employee Benefit Package Example - Papaya Global

Providing competitive benefits is essential for attracting and retaining top talent. 

An EOR offers ready-to-choose statutory benefits tailored to local requirements, as well as competitive global employee benefits. 

This ensures that your employees receive the benefits they are entitled to and that you remain compliant with local regulations.

EOR Provides Visa and Work Permit Support

Visa Sponsorship Program Example - Deel EOR
Visa Sponsorship Program Example - Deel EOR

There're many situations that you have help with visa sponsorship for your international employees:

  • Hiring Foreign Nationals Locally: When you want to hire a skilled person from another country to work in their home country (e.g., hiring a software engineer from India to work in the US).
  • Employee Transfer: You need to transfer an employee from one country to another (e.g., transferring a manager from the UK to the Asia team).
  • Temporary Projects or Assignments: When an employee is required to work on a short-term project or assignment in a different country.

Navigating visa and work permit requirements can be one of the most challenging aspects of hiring internationally. 

An EOR assists with obtaining the necessary documentation and ensures that all immigration requirements are met. 

This support can save you significant time and effort, allowing you to focus on other aspects of your business while your employees have proper paperwork to work legally.

EOR Supports Smooth Remote Workforce Operation

What companies benefit the most from EOR services is that you don’t need to have an entity to hire employees, and you can rely on their established infrastructure to run administrative tasks in compliance

But there’s more to it than just hiring and payroll; for example:

  • Providing Compliance Expertise: Staying on top of regulatory changes and helping you stay compliant with all the latest laws and regulations. Leading EOR company Globalization Partners confirmed this will be their priority.
  • Executing Employment Contracts: Helping draft and execute employment contracts that meet all regulatory requirements, covering everything from onboarding to offboarding.
  • Supporting Equity Grants: Managing equity grants for high-performers to ensure top talent is rewarded and retained, including setting up and administering equity programs.
  • Protecting Intellectual Property: Putting in place strong methods to protect your intellectual property in remote work scenarios, keeping your business assets safe.
Equity Grant Example - Deel EOR
Equity Grant Example - Deel EOR

Best EOR Services to Consider

Ready to explore some options to legally hire your international employees? Which EOR is the best fit depends on various factors, including your location, required services, and preferred level of technology.

Here are our top picks of best EOR services in 2024 to get you started:

Remofirst

Remofirst EOR

Founded in 2021, Remofirst is tailored for small to medium-sized enterprises, offering EOR solutions with transparent pricing starting at $199 per employee per month. 

Services span 180 countries, providing same-day onboarding, global payroll, tax filings, and pensions. Additional benefits include advanced health insurance and visa services. 

Despite competitive pricing, Remofirst maintains high-quality support and comprehensive services, making global hiring accessible and affordable for SMEs.

Deel

Deel EOR

Fast-growing software provider Deel excels in global payroll and compliance, serving over 100 countries. 

Its platform automates payroll with rich currency and payment options, tax deductions, and benefits management. Other notable features include contractor management, visa services, and a built-in HRIS system (currently free for teams of up to 200 employees) for companies to manage their entire mixed global workforce.

Deel's comprehensive and automated solutions make it a robust choice for modern companies managing a global workforce.

Remote

Remote EOR

Remote offers comprehensive EOR services in over 100 countries, operating with wholly-owned entities to ensure compliance. 

Key features include payroll and tax management, employee self-onboarding, flexible benefits packages, and intellectual property protection. 

Remote's platform is user-friendly and provides quick onboarding and centralized operations. Full legal entity control allows Remote to ensure compliance and speed in global hiring processes.

Globalization Partners

Globalization Partners EOR

Globalization Partners is a leading EOR provider with extensive EOR services across 180 countries. 

Recently restructured its offerings into a comprehensive G-P Meridian Suite™, G-P offers integrated payroll and benefits management, robust compliance frameworks, and real-time data and reporting. 

With deep knowledge of local employment laws, G-P ensures seamless global operations. This deep localized expertise makes it a reliable solution for big enterprises (even though they also have startups and small clients) looking to expand internationally.

Best Employer of Record in 2024: Full Options

These are just a few of the many great options for EOR services. For more in-depth reviews, check out the guide below:

Best Employer of Record (EOR) Services in 2024 for Global Expansion
Best EOR Services 2024

Wrapping it Up

Hiring international employees can be a complex process, but you don’t have to do it all alone! 

With the right EOR partner, you can navigate the complexities of global employment more easily and confidently. 

By leveraging this global employment solution, you can tap into a global talent pool for the skills you need or enter new markets quickly while complying with local laws and obligations.

Speaking of cost, EORs do come with a not-so-little fee, which might give some leaders pause. 

However, Deel has done the math and shows that it costs only a tenth of what it takes to establish your own entity, not to mention the time, effort, and responsibilities involved. 

As I shared in this guide on how to choose the right EOR partner, always ask about the cost structure and breakdown to avoid surprises later on. Costs can vary depending on the services you require and the country in which you need to hire.

All in all, I believe that EORs are an invaluable enabler for global employment, making hiring international employees legally and compliantly easy like never before.

In the day and age of remote work, companies are no longer limited to hiring talent within their geographic location. Experts confirm that dynamic organizations are the future and skills-first hiring is the current way of staying ahead in the competitive business landscape.

However, hiring international employees for their unique skillsets, in addition to the need for suitable recruitment strategies and adaptive recruitment processes, also comes with logistical and legal challenges.

That’s why the more cross-border work and employment become normalized, the more essential EOR services become for businesses.

In this guide, I’ll walk you through the steps to hiring an international employee and show how an Employer of Record (EOR) can make the journey smoother and simpler.

How to Hire an International Employee: 5 Big Steps

Hiring international remote employees can significantly enhance a company’s talent pool, provide access to specialized skills, and offer a competitive edge in the global market. 

However, it ain’t an easy job to hire within the same country as your headquarters because you’re required to set up many employment-related matters from scratch. The processes and regulations that work for local hires may be completely different when you move beyond borders, necessitating a thorough understanding of international labor laws, payroll systems, and compliance requirements. 

Here are the five key steps involved in hiring an international employee:

Steps to Hire International Employees

Step 1: Identify the Type of Employment

First and foremost, it's essential to determine the type of employment you're offering. Are you looking for full-time, part-time, or contract workers? This distinction will guide many of your subsequent decisions, including legal compliance and benefits provision.

Step 2: Establish Effective Recruitment Processes

Finding the right talent is as important as properly bringing them on board. While much of the focus in this article is on the legal hurdles for officially employing international talent, let’s have a friendly reminder that the process begins with effective talent acquisition.

To optimize your global recruitment efforts, consider:

  • Explore niche remote job boards to find candidates who are already familiar with and enthusiastic about remote work.
  • Craft job descriptions and job ads that are clear and appealing to a global audience, specifying any particular requirements such as time zone availability or language proficiency.
  • Be more attentive and focused on skills-based screening, assessments, and interviews to evaluate candidates more effectively.
  • Highlight your company culture in a way that resonates across different cultures, emphasizing what makes your remote team unique and attractive to international talent.

Step 3: Research Local Employment Laws and Regulations

Every country has its own set of employment laws and regulations. It's imperative to understand these laws to avoid legal pitfalls when hiring remotely. This includes knowing about minimum wage requirements, working hours, mandatory benefits, and tax obligations.

Check out our compliance guides for some most sought-after countries for remote hiring: Hiring in Poland, Hiring in Germany, Hiring in the Philippines, Hiring in Vietnam.

There's a few options to hire foreign employees, and the choice depends on many critical factors, including your long-term global expansion plans and the working relationship nature with your remote employees.

If you hire full-time roles, typically, you have to establish a subsidiary or branch office to have the legal right to employ people there, pay local taxes, and follow required procedures with government agencies.

The other option is to hire through an employer of record. An EOR can provide invaluable assistance by signing the contract with your employees on your behalf in the target country, so you don’t have to rush to establish a legal entity while still ensuring that all local laws are adhered to. (We will discuss more later!)

Step 4: Set Up Payroll System and Benefit Plans

When hiring across borders, you’re not just dealing with different currencies and bank systems. You’re navigating a maze of diverse tax regulations, labor laws, and benefit expectations that can vary significantly from country to country. 

Getting this right is about more than just avoiding legal troubles (though that’s certainly important). It’s about building trust with your remote teams and showing them they’re valued, regardless of where they’re located. A well-managed payroll and benefits system demonstrates your commitment to your global workforce and can impact employee satisfaction and retention.

What’s standard practice in your home country might be unusual or even non-compliant elsewhere. You’ll need to consider factors such as:

  • Local tax withholding requirements
  • Mandatory social contributions
  • Currency exchange rates and international banking fees
  • Differences in pay periods and payment methods
  • Varying definitions of compensation (e.g., bonuses, overtime)
  • Local statutory benefits and common supplementary benefits

Step 5: Prepare Effective Onboarding and Integration

Onboarding and integration are key to the success of your international hires, especially when you rarely meet in person. This process not only makes sure everything’s legal but also helps new employees feel like part of the team right from the start.

First off, you need to handle the paperwork. This means making sure work permits and visas are sorted, tax forms and payroll are set up correctly, employment contracts are clear, and you’re following local laws. Getting these administrative tasks right helps your employees feel secure and legally protected.

Next, focus on making your new hire feel welcome and part of the company culture. This includes offering a thorough orientation, setting them up with a mentor, having regular check-ins, being culturally sensitive, encouraging team integration, and setting clear expectations. By covering both the legal stuff and helping them fit in, you set your international employees up for success and long-term engagement with your company.

The Pros and Cons of Hiring Globally

Cross-border hiring in the embracement of remote work opens up new possibilities but also comes with its own set of challenges. Here's a summary of global employment’s pros and cons to help you navigate this strategic move effectively.

Benefits:

  • Access to a Larger Talent Pool: You can find highly skilled professionals who might not be available locally.
  • Diverse Perspectives: Bringing in employees from different cultural backgrounds can lead to more innovative ideas and solutions.
  • Global Market Insights: International employees can provide valuable insights into their local markets, aiding in global expansion efforts.

Challenges:

  • Compliance Issues: Ensuring compliance with different employment laws and regulations can be complex and time-consuming.
  • Higher Cost-per-Hire: The initial costs of setting up international hires can be higher due to legal, administrative, and logistical expenses.
  • Integration Difficulties: Integrating international employees into the company culture and ensuring effective communication can be challenging.

Global Employment Made Easy with EOR Partner

As we discussed, hiring international employees involves not only the typical recruiting processes but also navigating complex legal requirements. EOR services are born out of the real need to streamline global hiring. 

They are designed to help companies effortlessly handle the legal and compliance aspects, making hiring from anywhere no longer impossible.

Key elements of an Employer of Record
EOR Model.

What Does EOR Stand For in Recruiting?

An Employer of Record is a third-party organization that becomes the legal employer of your international employees.

When you hire through an EOR, your international workers are legally employees of the EOR, but they work for you. This arrangement means that while the EOR handles all legal and administrative responsibilities, you retain control over their day-to-day tasks and performance. 

This setup ensures compliance and reduces administrative burden, allowing you to focus on finding and managing talent without worrying about legal complications.

For more details, check out our guides on EOR Meaning, How an Employer of Record Works, and Employer of Record Benefits.

Here’s how an EOR makes global employment easy:

EOR Helps Classify Employment Status

Worker Classification Tool Example - Oyster HR
Worker Classification Tool Example - Oyster HR

EOR companies have integrated employee classification tools in their technology platform to help you double-check the employment status before finalizing employment contracts.

This safeguards companies from worker misclassification risks and ensures proper handling of subsequent processes.

EOR Automates Payroll Setup and Management

Payroll System Example - Deel EOR
Payroll System Example - Deel EOR

Handling payroll for international employees involves navigating different tax systems, currencies, and regulations. An EOR automates this process, ensuring that payroll is set up correctly and managed efficiently.  

They also handle tax deductions and social security contributions and ensure that employees are paid on time and in compliance with local laws.

Additionally, many EORs offer contractor management software, which simplifies the process of managing and paying contractors across various regions, within the same system. 

EOR Offers Localized and Competitive Benefits

Employee Benefit Package Example - Papaya Global
Employee Benefit Package Example - Papaya Global

Providing competitive benefits is essential for attracting and retaining top talent. 

An EOR offers ready-to-choose statutory benefits tailored to local requirements, as well as competitive global employee benefits. 

This ensures that your employees receive the benefits they are entitled to and that you remain compliant with local regulations.

EOR Provides Visa and Work Permit Support

Visa Sponsorship Program Example - Deel EOR
Visa Sponsorship Program Example - Deel EOR

There're many situations that you have help with visa sponsorship for your international employees:

  • Hiring Foreign Nationals Locally: When you want to hire a skilled person from another country to work in their home country (e.g., hiring a software engineer from India to work in the US).
  • Employee Transfer: You need to transfer an employee from one country to another (e.g., transferring a manager from the UK to the Asia team).
  • Temporary Projects or Assignments: When an employee is required to work on a short-term project or assignment in a different country.

Navigating visa and work permit requirements can be one of the most challenging aspects of hiring internationally. 

An EOR assists with obtaining the necessary documentation and ensures that all immigration requirements are met. 

This support can save you significant time and effort, allowing you to focus on other aspects of your business while your employees have proper paperwork to work legally.

EOR Supports Smooth Remote Workforce Operation

What companies benefit the most from EOR services is that you don’t need to have an entity to hire employees, and you can rely on their established infrastructure to run administrative tasks in compliance

But there’s more to it than just hiring and payroll; for example:

  • Providing Compliance Expertise: Staying on top of regulatory changes and helping you stay compliant with all the latest laws and regulations. Leading EOR company Globalization Partners confirmed this will be their priority.
  • Executing Employment Contracts: Helping draft and execute employment contracts that meet all regulatory requirements, covering everything from onboarding to offboarding.
  • Supporting Equity Grants: Managing equity grants for high-performers to ensure top talent is rewarded and retained, including setting up and administering equity programs.
  • Protecting Intellectual Property: Putting in place strong methods to protect your intellectual property in remote work scenarios, keeping your business assets safe.
Equity Grant Example - Deel EOR
Equity Grant Example - Deel EOR

Best EOR Services to Consider

Ready to explore some options to legally hire your international employees? Which EOR is the best fit depends on various factors, including your location, required services, and preferred level of technology.

Here are our top picks of best EOR services in 2024 to get you started:

Remofirst

Remofirst EOR

Founded in 2021, Remofirst is tailored for small to medium-sized enterprises, offering EOR solutions with transparent pricing starting at $199 per employee per month. 

Services span 180 countries, providing same-day onboarding, global payroll, tax filings, and pensions. Additional benefits include advanced health insurance and visa services. 

Despite competitive pricing, Remofirst maintains high-quality support and comprehensive services, making global hiring accessible and affordable for SMEs.

Deel

Deel EOR

Fast-growing software provider Deel excels in global payroll and compliance, serving over 100 countries. 

Its platform automates payroll with rich currency and payment options, tax deductions, and benefits management. Other notable features include contractor management, visa services, and a built-in HRIS system (currently free for teams of up to 200 employees) for companies to manage their entire mixed global workforce.

Deel's comprehensive and automated solutions make it a robust choice for modern companies managing a global workforce.

Remote

Remote EOR

Remote offers comprehensive EOR services in over 100 countries, operating with wholly-owned entities to ensure compliance. 

Key features include payroll and tax management, employee self-onboarding, flexible benefits packages, and intellectual property protection. 

Remote's platform is user-friendly and provides quick onboarding and centralized operations. Full legal entity control allows Remote to ensure compliance and speed in global hiring processes.

Globalization Partners

Globalization Partners EOR

Globalization Partners is a leading EOR provider with extensive EOR services across 180 countries. 

Recently restructured its offerings into a comprehensive G-P Meridian Suite™, G-P offers integrated payroll and benefits management, robust compliance frameworks, and real-time data and reporting. 

With deep knowledge of local employment laws, G-P ensures seamless global operations. This deep localized expertise makes it a reliable solution for big enterprises (even though they also have startups and small clients) looking to expand internationally.

Best Employer of Record in 2024: Full Options

These are just a few of the many great options for EOR services. For more in-depth reviews, check out the guide below:

Best Employer of Record (EOR) Services in 2024 for Global Expansion
Best EOR Services 2024

Wrapping it Up

Hiring international employees can be a complex process, but you don’t have to do it all alone! 

With the right EOR partner, you can navigate the complexities of global employment more easily and confidently. 

By leveraging this global employment solution, you can tap into a global talent pool for the skills you need or enter new markets quickly while complying with local laws and obligations.

Speaking of cost, EORs do come with a not-so-little fee, which might give some leaders pause. 

However, Deel has done the math and shows that it costs only a tenth of what it takes to establish your own entity, not to mention the time, effort, and responsibilities involved. 

As I shared in this guide on how to choose the right EOR partner, always ask about the cost structure and breakdown to avoid surprises later on. Costs can vary depending on the services you require and the country in which you need to hire.

All in all, I believe that EORs are an invaluable enabler for global employment, making hiring international employees legally and compliantly easy like never before.

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Global Employment

Employer of Record allows you to legally hire people from anywhere. Explore remote hiring strategies and how EOR global employment solutions facilitate cross-border operational success with full compliance.