Once your team works remotely, the map of where to look for talent opens up well beyond your city. But hiring someone in another country isn’t as simple as emailing over a contract — the rules change.
What Changes When You Hire Outside the US
You can’t simply add that person to your local payroll if your business doesn’t have a legal entity in their country. In practice, that leaves two main paths for formalizing the relationship.
The Two Most Common Paths
- Freelance or independent contractor: the person invoices you directly and you pay by project or by hour. It’s the fastest and cheapest route, but with less formal protection for either side.
- Employer of Record (EOR): a third-party company employs that person in their country on your behalf and handles the local contract, payroll, and taxes. You keep managing the day-to-day work.
Deel’s guide to an Employer of Record describes that second path as a third party that becomes the legal employer, so you can hire in that country without opening a local company. The same guide treats staffing agencies as a short-term option, and it flags misclassification when someone you pay as a freelancer would count as an employee under local law.
What to Look at Before Choosing a Path
The right choice depends on a few concrete factors, not just which option sounds simpler.
- Length of the relationship: something one-off calls for freelance; something stable and long-term calls for more formality.
- Available budget: an EOR adds a service cost that a freelance arrangement doesn’t have.
- The level of protection that person needs: local benefits, payroll taxes, and legal coverage.
- The time you have to manage it: background checks and drafting a contract by hand take time that an EOR saves you.
A Few Other Things to Sort Out
Beyond choosing the formal path, it’s worth settling upfront how you’ll coordinate time zones, how payment will work — bank transfer, an international platform, or local invoicing — and which holidays and calendars are going to coexist on the team. Sorting these out before day one avoids a lot of friction later.
What to Do With This in Your Business
If you’re about to bring on your first person outside the US, decide the formal path before you start the search — it’s going to shape how you write the offer, the contract, and the payment setup from day one. This is general guidance, not a substitute for advice from an accountant or attorney about your specific situation.
