How to Hire Employees Internationally in 2026
Hiring someone in another country can look simple from the outside.
You find the right candidate, agree on a salary, make an offer, and start working together.
In practice, international hiring is rarely that straightforward.
The moment a company employs someone in another country, it may need to deal with local employment laws, payroll, taxes, statutory benefits, working-time rules, employment contracts, termination requirements, and worker classification.
The rules also change from one country to another.
That is why how to hire employees internationally is not simply a recruitment question. It is also a legal, payroll, and operational question.
For a company hiring internationally for the first time, the most important decision is usually not where to post the job. It is how the employment relationship will be structured.
This guide explains the main options and what companies should consider before hiring employees abroad.
Important: Employment and tax rules vary by country and can change over time. This article provides general information for business planning and is not legal or tax advice. Companies should verify local requirements with qualified professionals before hiring.
Why Are Companies Hiring Internationally?
Companies no longer need to limit recruitment to people who live in the same city or country as their headquarters.
Remote work has made it possible for businesses to look for talent in international markets, while global expansion can create a need for employees who understand a specific local market.
International hiring can help companies:
- Access a larger talent pool
- Recruit for skills that are difficult to find locally
- Build teams in new markets
- Hire employees who already understand local customers
- Support customers in different time zones
- Build distributed and remote teams
- Test demand in a new country before making a larger investment
But hiring internationally also creates responsibilities that do not necessarily exist when everyone works in the company's home country.
The International Labour Organization notes that employment relationships create rights and obligations under national legislation. The specific rules therefore depend heavily on the country where the employee works.
What Is International Hiring?
International hiring means employing or engaging a worker who is located in a different country from the company's main operating location.
For example, imagine a company headquartered in the United States that wants to hire: a software developer in Brazil, a sales representative in Mexico, a customer support specialist in the Philippines, and a designer in Germany.
The company may want all four people to work remotely, but that does not mean the same employment rules apply to all four.
Each country can have its own requirements for: employment contracts, minimum wage, payroll, income tax, social security, paid leave, working hours, overtime, benefits, termination, severance, and worker classification.
This is one of the biggest differences between hiring internationally and hiring locally.
Can a Company Hire Employees in Another Country?
Yes, but the way it does so matters.
There are several possible structures for international employment. For most companies, the main options are:
- Establish a local legal entity
- Use an Employer of Record (EOR)
- Engage a genuine independent contractor
- In some situations, use another local employment structure or partner
- Wants to hire one or several employees abroad
- Does not have a local entity
- Wants to enter a new market
- Wants to test a market before establishing an entity
- Needs help managing local employment requirements
- Wants a centralized way to manage international employees
The right option depends on the company's plans, the country involved, the number of employees, the expected duration of the arrangement, and local law.
There is no single structure that works for every international hire.
1. Set Up a Local Entity
One option is to establish a legal entity in the country where the company wants to hire.
The company then becomes responsible for employing workers locally and managing the relevant obligations.
This can make sense when a business plans to establish a substantial and long-term presence in a country.
However, creating an entity can involve: company registration, local directors or representatives, accounting, payroll infrastructure, tax registrations, employment compliance, local banking, and ongoing administration.
The process and requirements vary considerably between countries.
For a company that wants to hire one employee to test a market, creating an entity may therefore involve more infrastructure than the company actually needs.
2. Use an Employer of Record
An Employer of Record (EOR) is another option for international hiring.
An EOR is a third-party organization that becomes the legal employer of the worker in the relevant country while the client company manages the employee's day-to-day work.
In a typical EOR arrangement: your company manages the employee's work, while the EOR handles the local employment relationship and related administration.
Depending on the provider and country, this can include employment contracts, payroll, taxes, statutory benefits, and other employment administration.
The major advantage is that a company can potentially hire internationally without first establishing its own legal entity in that country.
Deel, for example, currently describes its EOR service as allowing companies to hire employees in 150+ countries without setting up their own entity, with payroll, tax, and compliance services included in its platform.
When might an EOR make sense? An EOR can be worth considering when a company:
An EOR is not automatically the right choice for every company. Businesses should compare the cost and structure with the alternatives available in the country.
How Does an EOR Work?
Suppose a company in the United Kingdom finds an excellent candidate in Brazil.
The company wants the person to work full-time but does not have a Brazilian entity.
Instead of immediately creating a Brazilian company, the business could explore an EOR arrangement.
The process generally looks like this:
- Find the candidate The company recruits and selects the employee.
- Choose the employment structure The company determines whether an EOR is appropriate.
- The EOR prepares the local employment arrangement The employee is employed through the EOR according to applicable local requirements.
- The employee completes onboarding Required documentation and employment information are collected.
- Payroll begins The EOR handles payroll and relevant employment administration according to the applicable local rules.
- The company manages the employee The employee continues working for the company's business, with the client company generally managing responsibilities, performance, projects, and daily work.
3. Hire an Independent Contractor
Another option is to work with an independent contractor.
This can be appropriate for genuine independent business relationships, such as certain project-based or freelance arrangements.
But companies should not assume that calling someone a "contractor" automatically makes them one.
Worker classification matters.
If a person is legally an employee but is treated as an independent contractor, the company could face compliance problems.
The actual working relationship, local law, and relevant factors need to be considered. For example, questions may include:
- Who controls the person's work?
- How independent is the worker?
- Is the relationship ongoing?
- Does the worker operate an independent business?
- Who determines working hours?
- Can the worker serve other clients?
- How is the person paid?
- What does local law say about the relationship?
Misclassification is one of the issues companies need to consider carefully when hiring internationally. Current guides from global employment providers similarly identify worker classification as a major international hiring consideration.
EOR vs. Local Entity vs. Contractor
The three structures can serve very different purposes.
Hiring structure | Often suitable for | Main consideration |
|---|---|---|
Local entity | Long-term country expansion | More control but more infrastructure |
EOR | Hiring employees without establishing an entity | Provider fees and country-specific availability |
Contractor | Genuine independent/project-based work | Classification must comply with local law |
The important point is that international hiring is not one-size-fits-all.
A startup hiring its first employee abroad may have very different requirements from a multinational company hiring 100 people in a country where it already operates.
What Should Companies Check Before Hiring Internationally?
Before making an offer, companies should answer several basic questions.
1. Where will the employee actually work?
The employee's physical work location is important. A company may be headquartered in one country, while the employee lives and works permanently in another. That can bring the employee under the employment rules of the country where they work. Do not assume that your company's home-country employment contract automatically solves the issue.
Every country has its own framework. Depending on the location, companies may need to understand: minimum wage, working hours, overtime, paid holidays, sick leave, parental leave, statutory benefits, notice periods, termination rules, severance, social security, and payroll taxes.
International payroll is more complicated than simply sending an employee their monthly salary. A payroll process may involve: gross salary, employee deductions, employer contributions, income tax, social security, statutory benefits, currency conversion, payslips, and payroll reporting.
Employee benefits are another area where companies need to look beyond salary. Depending on the country, employees may have legally required benefits involving: paid vacation, public holidays, health coverage, social security, pension contributions, parental leave, insurance, transportation or meal benefits, and other statutory payments.
An international employment contract should reflect the applicable local requirements. Depending on the country, it may need to address: job title and duties, salary, payment schedule, working hours, leave, benefits, probation, confidentiality, intellectual property, termination, notice periods, and applicable law.
2. What employment laws apply?
The ILO emphasizes that employment relationships create rights and obligations under national legislation, which is why local requirements need to be considered rather than applying one global template everywhere.
3. How Will Payroll Be Managed?
The exact requirements depend on the employee's country. This is one reason companies expanding internationally often look for payroll systems or global employment providers that can centralize multiple countries.
4. What Benefits Are Required?
Some benefits may be mandatory, while others may simply be part of a competitive compensation package. The distinction matters when calculating the real cost of an international hire.
5. What Does the Employment Contract Need to Include?
Using the same employment contract for employees in ten different countries can create unnecessary risk. Local requirements should be reviewed before the employee starts.
How Much Does It Cost to Hire an Employee Abroad?
There is no universal cost for international hiring.
The total employment cost can be significantly different from the employee's advertised salary.
A company may need to consider: employee salary + employer taxes and social contributions + statutory benefits + payroll costs + insurance or other required benefits + EOR or local administration fees (if applicable) = total employment cost.
This is why comparing candidates only by their monthly salary can give an incomplete picture. A salary of $3,000 per month does not necessarily mean the company's total employment cost is exactly $3,000 per month.
How to Hire Employees Internationally: Step-by-Step
Step 1: Choose the country Start by identifying where the employee will actually work.
Step 2: Understand the local requirements Research employment, payroll, tax, benefits, and worker-classification requirements.
Step 3: Decide how to hire Compare local entity, EOR, and contractor.
Step 4: Calculate the real cost Do not look only at the salary. Consider employer contributions, benefits, payroll, and service fees where applicable.
Step 5: Recruit the candidate Use international job boards, professional networks, recruiters, referrals, and your existing talent network.
Step 6: Prepare the employment arrangement Make sure the contract and onboarding process reflect the applicable local requirements.
Step 7: Complete payroll and onboarding Collect the required information and documents and set up the appropriate payroll process.
Step 8: Maintain compliance international hiring does not end when the employee signs the contract. Companies also need to manage ongoing requirements such as payroll, leave, benefits, salary changes, and eventually termination if the employment relationship ends.
How to Hire Internationally Without a Local Entity
This is one of the most common questions companies have when they discover a candidate abroad.
An EOR can be one possible structure.
Instead of creating its own local entity, the company works with an EOR that already has the necessary employment infrastructure in the relevant country.
This can be particularly useful when a company wants to:
- Hire its first employee in a country
- Test a new market
- Expand gradually
- Avoid setting up an entity immediately
- Centralize international HR administration
Deel's current global hiring information specifically describes EOR as a way to hire employees internationally without establishing the company's own entity in the country.
When Should a Company Consider an EOR?
An EOR may be worth researching when the company has a real employee to hire but does not yet have the infrastructure to employ people locally. For example:
- Scenario 1: One employee A technology company finds a developer in Brazil but has no Brazilian entity.
- Scenario 2: Testing a market A company wants to hire a salesperson in Mexico before deciding whether to establish a permanent local operation.
- Scenario 3: Distributed team A remote company wants to hire employees across several countries without building separate payroll and HR processes for every location.
- Scenario 4: Fast international expansion A growing business needs employees in multiple markets and wants a more centralized employment process.
Deel's 2026 material also describes EOR as one option companies can use when entering new markets and hiring locally without first establishing their own entity.
International Hiring Is More Than Finding Talent
Recruiting is only the first part of international hiring.
A successful international employment process needs to connect: Recruitment → Employment structure → Contract → Payroll → Benefits → Compliance → Ongoing HR.
If one part is overlooked, the company can end up spending more time and money fixing the problem later.
This is particularly important for smaller companies that do not have an international HR or legal team.
Common Mistakes When Hiring Employees Abroad
Using a contractor agreement for everyone Not every remote worker is automatically a contractor. The actual relationship and local law matter.
Assuming one contract works everywhere Employment requirements differ between countries.
Looking only at salary Employer contributions and statutory benefits can materially change the total cost.
Ignoring local payroll rules Payroll is not simply an international bank transfer.
Waiting until after hiring to research compliance The employment structure should be considered before the offer is finalized.
Treating every country the same A hiring process that works in Brazil may not work in Germany, Mexico, India, or the Philippines.
International Hiring Checklist
Country: Where will the employee work? Is the company already established there?
Employment: Will the person be an employee or contractor? What local employment rules apply?
Payroll: How will salary be processed? What taxes and employer contributions apply?
Benefits: Which benefits are mandatory? What additional benefits will the company offer?
Legal: What should the employment contract contain? What are the termination requirements?
Structure: Should the company establish a local entity? Would an EOR be appropriate? Is a contractor relationship legally appropriate?
Cost: What is the total employer cost? Are there EOR, payroll, or other administrative fees?
Frequently Asked Questions
Can a US company hire an employee in another country?
Yes. The company can potentially hire internationally through a local entity, an EOR, or another legally appropriate structure. The correct approach depends on the country and the nature of the employment relationship.
Potentially, yes. An EOR is one structure that can allow a company to employ someone in another country without establishing its own local entity. The availability and details depend on the country and provider.
No. A recruitment agency generally helps a company find candidates. An EOR is concerned with the legal employment relationship and related employment administration.
It can be simpler in some situations, but that does not mean it is automatically appropriate. The contractor must genuinely qualify as an independent contractor under the relevant rules.
No. A company with an established local entity may employ people directly. An EOR is simply one possible structure for international employment.
Start with salary, then add applicable employer taxes, social contributions, statutory benefits, payroll costs, and any EOR or administrative fees.
Can I hire an international employee without opening a company there?
Is an EOR the same as a recruitment agency?
Is hiring a contractor internationally easier?
Does every international employee need an EOR?
How do I calculate the cost of an international employee?
Hiring Internationally: The Practical Takeaway
Hiring employees internationally opens access to talent that a company might never find by recruiting only in its home country.
But international hiring also requires a different approach to employment.
Before making an offer, companies should understand where the employee will work, which laws apply, how the worker should be classified, how payroll will operate, what benefits are required, and which hiring structure makes sense.
For some companies, establishing a local entity will be the right long-term solution.
For others, an EOR may provide a practical way to hire employees in a new country without immediately creating their own local infrastructure.
And for genuinely independent professionals, a contractor arrangement may be appropriate.
The important thing is to choose the structure before the employment relationship begins and to verify the local requirements for the country involved.
Explore Our Country Hiring Guides
If you're researching a specific market, see our country-by-country guides:
🇧🇷 How to Hire Employees in Brazil in 2026
🇲🇽 How to Hire Employees in Mexico in 2026
🇵🇭 How to Hire Employees in the Philippines in 2026
More country guides will be added as we expand Global Hiring Tips.
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