How to hire an employee in another country without opening a company

Option 1: Open your own company in that country

You register a local entity (a subsidiary or branch), open a bank account, register with tax and social security authorities, and run local payroll yourself or through a payroll provider.

Good for: companies planning a large, long-term team in one country.

The catch: it's slow and ongoing. Setup typically involves local lawyers and accountants, and you take on annual filings, local accounting and employment law compliance for as long as the entity exists. For one or two hires, that overhead rarely pays off.

Option 2: Hire them as an independent contractor

The person invoices you as a self-employed business. You pay their invoice; they handle their own taxes and benefits.

Good for: project work, part-time help, and people who genuinely run their own business with several clients.

The catch: misclassification. In many countries, if someone works full-time, on your schedule, only for you, and as part of your team, local law can treat them as your employee regardless of what the contract says. That can mean back-paid social contributions, holiday pay and penalties. Contractors also get no local benefits or job security, which makes it harder to keep good people.

Option 3: Use an employer of record (EOR)

An employer of record is a company that's already set up in the worker's country. It becomes their legal employer: it signs a local employment contract, runs payroll, pays taxes and contributions, and follows local labor law. The person works full-time for you and takes direction from you.

Good for: full-time, long-term hires in countries where you don't have a company.

The catch: a monthly fee per employee on top of salary. For most companies with fewer than a few dozen people in a country, that fee is far less than running an entity, and it removes the classification risk of contractors.

The three options side by side

How to choose

1. Is it a real job or a project? If the person will work full-time, on your hours, as part of your team, treat it as a job. That points to an EOR or your own entity.
2. How many people in that country? One to a few dozen: an EOR is usually cheaper and faster. A large, permanent team: an entity can start to make sense.
3. How fast do you need them? An EOR or contractor can start within days of an offer. An entity can take months.
4. Do you want to own the relationship later? Many companies start with an EOR, then move people onto their own entity or payroll once the team grows.

Don't forget the hiring part

An EOR solves employment, not recruiting. Most EOR platforms expect you to bring the candidate. If you don't already have someone in mind, you still need to source, interview and vet people in a market you may not know.

That's the gap we fill. We recruit the person and, if you want, we also employ them, so it's one partner instead of a recruiter plus an EOR. You can also hire them directly on your own payroll for a one-time placement fee. See how both options work on our pricing page.

What it costs in practice

Salary is the biggest variable, and it depends on the role and country. As a reference point from our own benchmarks, a mid-level customer service rep earns about $24,000 a year in Serbia or South Africa and about $27,000 in Latin America, compared with about $68,800 in the US. Our Remote Talent Cost Report covers 55 roles, and each country page has a calculator:

• Hiring in Serbia and North Macedonia
• Hiring in Colombia and Mexico
• Hiring in South Africa
• Hiring in the Philippines

For a deeper comparison of the two main routes, read employer of record vs contractor.