Businesses are always looking for growth opportunities, and hiring employees around the world can be a game changer. Global employees bring various benefits thanks to their skills and experience. But how do you compliantly hire and pay employees whose tax and employment laws vary from yours?
Angelica Krauss, the director of marketing at Remofirst, explains the potential benefits that can come from hiring international employees.
A remote worker herself since 2019, Krauss also details the options available to companies looking to hire remote workers internationally.
Reasons to hire international employees
Access to a wider talent pool
Countries in Europe, Latin America, and the Middle East have seen high growth rates for engineers and developers, where they have the right skills and tools to work with global teams. Opening your hiring process to a wider talent pool means you’ll have more talent to choose from, which is important if you’re trying to find a unique set of skills and experience.
In some cases, it may be more cost-effective to hire remote workers in other countries than it would be to hire in your home country or send employees abroad for work. For example, the average three-year expatriate costs $1million.
Global employees give you access to people who speak multiple languages. This can be extremely helpful if you need to communicate with partners or clients who use other languages on a routine basis. It’s also helpful if you’re looking to expand into certain markets.
How to hire and pay global employees
When it comes to onboarding international employees, there are differences in tax compliance, employment laws, and more that you need to be aware of. These are the two best methods of hiring international employees:
1. Work with an Employer Of Record (EOR)
An Employer of Record (EOR) is an organisation that allows companies to expand internationally by hiring and paying employees on behalf of another company.
They take care of all formal employment tasks, such as onboarding and compliance documentation. Basically, employers hire EORs to ease the burden of managing international workers, and to stay compliant with local employment laws across multiple countries.
Who is this for? Companies who want to hire top candidates in other countries and/or expand into new markets. With an Employer of Record (EOR), you don’t need to set up a local entity in each country before testing a potential market, which will save you money.
Cost: Varies by provider, number of employees, benefits, and more. EORs should provide a clear invoice that includes all services and taxes. Remofirst offers a comprehensive service starting at $199 per employee per month.
Pros: EORs take care of formal employment tasks such as onboarding and compliance. This makes international expansion easy because you don’t have to incorporate locally or handle compliance for every country.
Cons: If you are planning to hire a large portion of your team in another country for the long term, you might want to consider establishing a local entity.
2. Register a legal entity in each country
If you don’t mind taking the long and expensive route, you can register a legal entity in each country you want to hire in. In this case, you are responsible for keeping your business compliant with local labour laws, managing payments in multiple currencies, and keeping multiple legal entities active and paid for. This method is time-consuming and costly, so if you only plan to hire a small team of remote workers in each country, it’s much better to partner with a global Employer of Record (EOR) like Remofirst.
Who is this for? This is a good option if you are planning to build a large team in each country you are hiring in. If you know that a large portion of your team will be based in that country, you might want to consider establishing a legal entity there for the long term.
Cost: Establishing a legal entity usually costs tens of thousands of dollars and takes several months.
Pros: If a large percentage of your team will be working in that country for the long term, you might be able to support a large team better with your own entity there.
Cons: It can be very expensive, time-consuming, and complicated to establish multiple legal entities in many countries. The difference in tax and employment laws in each country alone is a lot to keep track of without bringing on additional staff to handle all the paperwork and bureaucracy.
How you choose to hire your international employees will depend on your growth goals and company size. For most companies, we recommend working with an Employer of Record (EOR) so that you can legally and efficiently engage with workers in other countries without having to set up a local entity or risk violating local employment laws.
With Remofirst, you can build a team of remote employees in 150+ countries – they’ll handle everything from multi-currency payroll to compliance so that you can focus on growing your business. Request a demo today, start hiring tomorrow.