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How to Hire International Employees: A Legal & Practical Guide
More US companies are hiring internationally than ever before. Remote work opened the door, and now teams are realizing they don't need to limit their talent search to one country.
For some companies, the question is still "should we hire internationally?" For others, it's "how do we do this the right way?" Either way, here's what matters: it's completely legal, and there's a smooth path to making it work.
The confusion comes from the fact that most companies don't know where to start. Do you need a lawyer? A local office? Special paperwork? The answer depends on how you set things up, but it doesn't have to be complicated.
This guide walks through everything you need to know about hiring international employees—the legal side, the practical side, and the fastest way to build a global team without the usual headaches.
Yes, US companies can legally hire international employees. The key difference is whether you hire them as employees or independent contractors, and that choice determines everything from compliance requirements to tax obligations.
The distinction between hiring employees versus contractors matters more than most companies realize. An employee works under your direction, follows your schedule, and integrates into your team. A contractor operates independently, controls their own methods, and typically serves multiple clients.
Getting this classification wrong leads to major problems. If you treat someone like an employee but pay them as a contractor, you're exposed to back taxes, penalties, and legal claims in their home country. Countries like the UK, Germany, and Australia actively audit for this. The fines aren't theoretical.
The good news? When you structure things correctly from the start, hiring internationally is straightforward. You just need to understand which model fits your needs.
Hiring international employees follows similar steps to the usual hiring process we already know:
Where things get complicated is choosing the legal structure that makes all of this possible. That decision affects your timeline, costs, compliance obligations, and how much control you have over the employment relationship.
The structure you choose determines whether hiring internationally becomes a competitive advantage or a compliance headache. Understanding which model fits your situation saves time, money, and legal trouble down the road.
Hiring international employees opens doors that domestic-only hiring keeps closed. Access to talent with diverse experiences, cost efficiency, and operational advantages makes this a strategic move for growing companies. Here are some of the benefits:
You're not limited to candidates in your city, state, or country. The best developer for your project might be in Buenos Aires. The perfect operations manager could be in Bogotá. When you hire internationally, you're choosing from a global talent pool with a lot of experience instead of hoping the right person lives nearby.
Hiring internationally can also mean hiring experienced professionals in regions with lower living costs. A senior developer in Argentina earns a different salary than one in San Francisco, but the skill level and output quality are the same. You get the same expertise at a more sustainable cost structure.
International hiring lets you scale quickly without the constraints of local labor markets. Need to hire five developers in three months? Your local market might not have enough qualified candidates for the position and the time frame you need, while international talent gives you options when you need to grow fast.
Teams with international members bring different approaches to problem-solving, customer understanding, and market insights. Someone who grew up and now works in a different country sees challenges through a different lens, which strengthens products, strategies, and decision-making.
When it comes to hiring internationally, you've got four main options. Each one works well in certain situations and falls apart in others.
You establish a legal entity (subsidiary, branch office, or LLC equivalent) in the country where you're hiring. Companies hiring 10+ employees in one country or planning long-term presence in a country usually go this route when they need complete control over employment terms, IP protection, and local market presence.
This gives you maximum control and flexibility. You set your own employment terms, design benefit packages that match your company culture, and own the entire employment relationship directly.
The setup costs are substantial, and you're looking at several months before everything is established. Once you're operational, ongoing costs for local accounting, legal compliance, tax filing, and administrative overhead continue year after year. You get full control, but you pay for it in both money and time.
Most companies prefer hiring contractors directly because it seems simple. You pay invoices, they handle their own taxes, and you can onboard someone in days instead of months.
No entity setup, minimal paperwork, and you move fast. You can hire someone and start working immediately without complex legal structures.
The problem shows up in the relationship structure. If your contractor works exclusively for you, follows your schedule, uses your tools, and reports to your managers, they're legally an employee in most countries. The contractor agreement doesn't override local employment law, and misclassification creates serious legal exposure. This model only works well for true project-based assignments with defined deliverables, workers who serve multiple clients, and arrangements where you don't control methods or schedules.
An EOR becomes the legal employer in the country where you're hiring. They handle contracts, payroll, taxes, and compliance while you direct the work. You pay the EOR, they pay the employee, you manage the work, and they manage the paperwork.
The EOR handles local compliance, so you get actual employees without the risk of misclassification, and this quickly solves the legal structure problem.
The monthly fees per employee add up on top of salary costs. You're locked into the EOR's contract terms, benefit packages, and termination procedures, and when you need payroll adjusted or a contract changed, you depend on their timeline, which doesn't always align with yours.
Global hiring partners combine talent sourcing with embedded compliance infrastructure. The partner handles vetting, hiring, and compliance while the employee integrates directly into your team.
You get vetted talent with legal infrastructure already solved. Full employment compliance, local payroll, benefits administration, and legal contracts that hold up in each country are all handled without setting up an entity.
And with Athyna, for example, you also meet qualified candidates in days instead of posting jobs and sorting through hundreds of applications from unqualified candidates.
You're working with a third-party partner rather than directly employing people through your own entity, which means if you eventually want to transition employees to your own legal entity in that country, you'll need to coordinate that move with the partner.
Latin America offers specific advantages for US companies looking to hire international employees. The region stands out for reasons that go beyond just geography.
Athyna handles the full cycle from finding talent to managing ongoing compliance, offer letter, managing contracts, payments and more.
We handle employment contracts that comply with local laws, manage payroll and tax withholding, and administer benefits in accordance with each country's requirements. You don't need entities, EOR subscriptions, or separate payroll providers.
You control day-to-day work direction, project assignments, performance expectations, and team integration. The employee works on your projects using your tools and processes.
Meet qualified candidates in 4 days. Finding good developers, designers, or operations people takes time when you're starting from scratch. Pre-vetted talent pools mean you're choosing between qualified candidates instead of hoping the right people apply.
Talk to our team today and see how we can support your remote hiring.
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Digital Strategist at Athyna, aka the SEO girl.
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The best approach depends on your hiring volume and timeline. For faster hiring with proper compliance, working with a global hiring partner like Athyna provides vetted talent, handles legal infrastructure, and gets you from search to hire in days instead of months.
The timeline depends on your method. Contractor relationships can start in days but carry legal risk. Entity setup takes 3-6 months. EORs typically require 2-4 weeks. Global hiring platforms like Athyna can have candidates ready in 4 days, with employment starting in 2 weeks.
Treating employees as contractors is the biggest risk. This opens you up to back taxes, penalties, and legal claims. Incorrect tax withholding and employment contracts that don't comply with local law. Most of these issues come from companies using contractor setups when the relationship is legally employment.
No. International remote workers remain in their home country and don't need US visas. They work remotely from their location. Visas only become relevant if you're bringing them to the US for work, which is a different scenario entirely.
Payroll must comply with each country's tax and social security requirements. This includes proper withholding calculations, mandatory benefits, and timely remittance to local authorities. Most companies use specialized international payroll providers, EORs, or global hiring platforms rather than managing it directly.
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