Hiring someone in another country is mostly a structural question rather than a recruitment one. Finding the person is the part you already know how to do. The part that goes wrong is what happens after they say yes: which legal entity employs them, what their contract has to contain, what you are allowed to ask about their background, and whether the arrangement creates a tax presence you did not intend.

This guide covers the whole sequence. It compares the four ways to hire internationally with real published costs, sets out the seven steps, and then goes into the four things that cause the most expensive mistakes and that almost no other guide explains: what employment contracts must legally contain country by country, which background checks you may lawfully run where, how worker misclassification is actually tested, and what really creates a permanent establishment.

Every figure here is attributed, and legal references were checked in October 2026. Where a widely repeated number cannot be traced to a real source, this guide says so rather than repeating it.

Key Takeaways

• Decide the structure before the shortlist. There are four ways to hire internationally, and the choice sets your cost, your speed and your liability. Contractor, your own local entity, an employer of record, or a PEO.
• Most international hiring involves no visa at all. If the person already lives and has the right to work where they are, you are solving an employment and tax question, not an immigration one. Relocation is a different, slower and far more expensive route.
• Ignore the “entity setup costs 20,000 to 100,000 dollars and takes 6 to 12 months” figure. It appears on nearly every guide on this topic and cannot be traced to any research body or government source. The dataset that once measured this, the World Bank’s Doing Business programme, was discontinued in 2021.
• Published EOR list prices sit between 599 and 699 US dollars per employee per month, before statutory employer costs. Contractor management runs far lower.
• Employment contracts are not optional paperwork. In the EU, specified information must be given within 7 calendar days of the first working day and the rest within one month. In the UK most particulars are due on day one. Singapore requires written Key Employment Terms within 14 days.
• You often cannot run your own criminal background check. Under GDPR Article 10, criminal conviction data may generally only be processed under official authority, which rules out the self-service screening many employers assume is normal.
• An employer of record does not by itself remove permanent establishment risk. The test looks at what the worker actually does for you, not at who runs payroll. Any provider telling you otherwise is overselling.

First, Which Question Are You Actually Asking?

Two very different problems get called “hiring international employees”, and most of the confusion on this topic comes from mixing them up. Sort this first, because the rest of the answer depends on it.

	Hire in place	Relocate to you
The situation	The person already lives in another country and will keep working from there	You want the person physically in your country
The core problem	Employment structure, payroll and tax in their country	Immigration, visa sponsorship and relocation
Who solves it	An EOR, a local entity, or a contractor arrangement	Immigration counsel and a sponsorship route
Typical timeline	Days to weeks	Months, and sometimes subject to quotas or lotteries
Typical cost driver	Monthly fee plus statutory employer contributions	Legal fees, government fees and relocation costs
Can it fail outright	Rarely, it is a question of how	Yes, visas get refused

For most companies the answer is hire in place, and this guide is mostly about that. If you genuinely need someone physically present, there is a short section on relocation near the end, but treat it as a specialist exercise rather than a variant of normal hiring.

The Four Ways to Hire International Employees

This is the decision that determines everything downstream, so make it deliberately rather than by default.

1. Engage Them as an Independent Contractor

You sign a services agreement, they invoice you, and they handle their own tax and social contributions.

It is fast and cheap, and it is the right answer for genuinely independent, project-based work. It is the wrong answer, and a serious liability, when the person works set hours under your direction with no other clients, because authorities assess the substance of the relationship rather than the label on the contract. See the misclassification section below, and our guide to hiring independent contractors vs employees.

2. Set Up Your Own Legal Entity

You register a company in the country and employ people directly. It gives you maximum control, the lowest cost per head once you reach scale, and the ability to trade and invoice locally.

It also commits you to capital, registration, local accounting, statutory filings and an ongoing administrative burden that does not scale down. This is a decision for a market you have committed to, not for your first hire there. See EOR vs entity setup.

3. Use an Employer of Record

An employer of record legally employs your chosen person through its own local entity. It holds the employment contract, runs payroll, registers and pays statutory contributions and carries the employer-side compliance liability, while you choose the person and direct the work.

This is the right answer for most companies making their first hires in a country, because it is the only structure that works when you have no entity. It also solves a mechanical problem companies discover late: a business with no local entity usually cannot register as a contributing employer with the local social security authority at all, so it has no lawful way to pay statutory contributions even if it wants to.

4. Use a PEO

A professional employer organization shares employment responsibilities with you under a co-employment model. The distinction matters: co-employment is a legal construct recognized in some jurisdictions and not others, and in many countries what is marketed as a PEO is functionally either an EOR or a licensed labour leasing arrangement. Ask which it is and who signs the contract. See PEO vs EOR.

The Four Compared

	Contractor	Your own entity	Employer of record	PEO
Local entity needed	No	Yes, it is the entity	No	Usually yes
Who is the legal employer	Nobody, they are independent	You	The EOR	Shared, where recognized
Time to first hire	Days	Months	Days	Weeks
Who carries employment liability	You, if misclassified	You	The EOR	Shared
Can you give statutory benefits	No	Yes	Yes	Yes
Can you invoice local customers	Not applicable	Yes	No	No
Cost per head at scale	Varies	Lowest	Moderate	Moderate
Best for	Short, genuinely independent projects	Committed markets, 20+ people, local revenue	First hires, 1 to 20 people, speed	Markets that recognize co-employment

What It Costs and How Long It Takes

Here is where this guide differs from every other one on this topic, and it is worth reading carefully before you build a business case.

The Entity Setup Figure Everyone Quotes Is Not Sourced

Nearly every guide to international hiring states that setting up a foreign legal entity takes six to twelve months and costs between 20,000 and 100,000 US dollars. We went looking for the origin of that figure and could not find one. Every page carrying it is published by an employer of record or global payroll vendor, and none of them cites a research body, a government source or a dataset.

There is a reason it circulates unchallenged. The only genuine cross-country dataset on entity formation cost and time was the World Bank’s Doing Business programme, whose Starting a Business indicators ran from 2003 to 2019. The programme was discontinued in 2021 following an investigation into data irregularities, and its replacement, Business Ready, published its first edition in 2024. So for several years there has been no current authoritative global dataset on what it costs to incorporate in a given country, which is exactly the vacuum a convenient vendor number fills.

What to do instead: ask a corporate services provider in the specific country for a quote against your actual circumstances. Setup cost and timeline vary enormously by jurisdiction, by business activity and by whether foreign ownership restrictions apply, and a single global range tells you nothing useful about the country you are actually entering.

What EOR Providers Actually Charge

These are published list prices as of October 2026, taken from the providers’ own pricing pages rather than from quotes we have received.

Provider	EOR, per employee per month	Contractor management, per contractor per month
Remote	699 USD	29 USD, or 99 USD for the enhanced tier
Deel	599 USD	49 USD, or 325 USD for contractor of record

Three things to understand about those numbers before you compare them to anything:

• They exclude statutory employer costs entirely. The fee is on top of gross salary and on top of employer social contributions, which vary from under 8 percent in some markets to well over 20 percent in others.
• They are list prices. Both are commonly discounted on annual commitments, and country-specific rates often differ from the headline figure.
• Scope varies. Work permit sponsorship, recruitment, equipment and local-law IP drafting are frequently outside the headline price. Compare what is included before comparing the number.

For the wider pricing picture, see employer of record pricing, and for how to evaluate providers beyond the fee, how to choose the best employer of record.

Realistic Timelines

Route	Time to someone working	What drives it
Contractor	Days	Contract signature and onboarding only
Employer of record	Days once the candidate is chosen	Document collection and local registration
Finding the candidate	Typically 3 to 6 weeks for mid-level roles, longer for scarce skills	Market depth and role seniority
Your own entity	Months, varying widely by country	Registration, capital, bank account, tax and social security registration
Relocation with a visa	Months, and sometimes quota-dependent	Sponsorship route, processing times, and whether the application succeeds

Note what we have not done there: put a single number on entity setup. For the reason, see above. Our guide to global expansion solutions for startups covers the sequencing question in more depth.

How to Hire International Employees: The Seven Steps

Step 1: Confirm Where the Person Will Work and That They Can Work There

Everything follows from the country the work is physically performed in, not from where your company sits and not from where the candidate holds citizenship. Someone with a US passport living in Portugal is a Portuguese employment question.

Confirm two things before you go further. That the person has the right to work in the country they are in, which is usually their own but not always. And that you are willing to employ in that country, because some markets carry obligations you may not want, such as mandatory bonuses, long notice periods or restrictive termination rules.

This is also the moment to decide your policy on people who move. An employee who relocates mid-employment changes your obligations in both countries, and a policy written before it happens is far easier than one written afterwards.

Step 2: Choose the Employment Structure

Use the comparison table above. The practical decision rule most companies arrive at:

• One to twenty people in a country, no entity, want them as employees: employer of record.
• Genuinely independent, project-based work with a defined deliverable: contractor, documented properly.
• Twenty or more people, a committed market, or you need to invoice local customers: your own entity.
• You need people fast while an entity is being set up: an EOR as a bridge, with a planned transition. Ask about the conversion terms before you sign, not after.

Step 3: Benchmark the Package Against the Local Market

Paying your home-country salary in a lower-cost market is not generosity, and paying a local average without checking what that average covers is a mistake in the other direction.

Three things to settle, and only the first is about the number:

• The benchmark itself. Use role-level and seniority-level local data rather than a cost-of-living adjustment applied to your own band. See global salary benchmarking.
• The statutory floor versus the market expectation. These are different numbers. Statutory annual leave may be twelve days while every competitor offers twenty. Statutory health cover may exist while private medical insurance is a market expectation for professional roles.
• Mandatory extras your budget may not include. A 13th month payment is a legal requirement in the Philippines and Indonesia, and a near-universal expectation in Vietnam without being a legal requirement. Budget 13 months in those markets regardless of which it is.

Your total cost is gross salary plus employer statutory contributions plus any provider fee, and the middle term varies widely. See employee compensation strategy for structuring the package itself.

Step 4: Source and Screen

Sourcing internationally means using the channels that actually work in that market rather than the ones that work in yours. Local job boards, local professional networks and local recruiters reach candidates that a global posting will not.

Two practical points. First, much of the best talent in competitive markets is not applying to postings, so a sourcing approach that relies only on inbound applications will underperform. See passive candidate recruitment. Second, run a structured process, because interviewing across cultures amplifies the weaknesses of an unstructured one: define the criteria before you start, ask every candidate the same core questions, and score against the criteria rather than against impression. See candidate screening and how to improve candidate experience.

Screening also has a legal dimension that most guides skip entirely. What you may lawfully check varies enormously, and in several jurisdictions the screening most employers consider routine is not permitted. That is covered in its own section below.

Step 5: Make the Offer and Get the Contract Right

The offer needs to state gross pay in local currency, the pay frequency, the leave entitlement, the probation period, the notice period and the start date.

The contract is where international hiring most often goes wrong, because employment contract requirements are statutory in most countries, not a matter of preference. A translated version of your home-country template will usually be missing mandatory terms and may contain terms that are unenforceable locally. The country-by-country requirements are set out below.

Step 6: Onboard, Register and Pay

Onboarding an international employee means registering them with the local authorities as well as setting them up in your systems.

Depending on the country that can include social security registration, tax registration or a tax code, enrolment in mandatory insurance schemes, and in some cases notifying a labour authority of the hire. Miss these and you have an unregistered employee, which is a different and more serious problem than a late payroll. Then there is payment itself, which means local-currency net pay, correct withholding and a compliant payslip. See how to pay international employees.

Do not neglect the human half. A first international hire is often isolated by default, in a different time zone from everyone they work with. Agree the overlap hours before they start rather than after, write decisions down so they are not excluded by hallway conversations, and give them a named person to ask questions. See building efficient global teams in APAC.

Step 7: Keep It Compliant

Compliance is recurring rather than a state you reach at onboarding.

Keep a calendar per country covering statutory filing dates, contribution payment dates, minimum wage and contribution rate changes, and record retention periods. Rates change, usually annually, and a provider whose guidance updates late is a real failure mode that you carry the consequence of. See global payroll compliance and EOR compliance.

As the team grows past a handful of countries, this stops being a checklist and becomes a reporting problem, which is where global workforce management starts to matter.

What Must Be in the Employment Contract, by Country

No competing guide on this keyword covers this, and it is the most common point of failure for companies using a home-country template abroad.

The European Union

Directive (EU) 2019/1152 on transparent and predictable working conditions sets a floor across all member states. It requires employers to provide a specified list of information, and crucially it splits that list across two deadlines:

• Within 7 calendar days of the first working day: the identities of the parties, the place of work, the job title or description, the start date, the end date for fixed-term work, the probation duration and conditions, remuneration including the initial basic amount and other components stated separately with the frequency and method of payment, and the normal working day or week arrangements including overtime and its pay.
• Within one month: the remaining items, including training entitlement, paid leave entitlement or the method of allocating it, the termination procedure including notice periods and the time limits for challenging a dismissal, any collective agreements governing conditions, and the social security institutions receiving contributions.

There is also a separate obligation under Article 7: if the employee will work abroad for more than four weeks, additional information must be given before departure, covering the countries involved, the duration, the currency of payment, benefits in cash or kind, and whether repatriation is provided and on what terms.

Two cautions. The directive is a minimum, and several member states impose stricter content and language requirements in their national transposition. And the requirements apply to the information being provided, which in practice usually means the contract, but national implementations differ on form.

United Kingdom

Under section 1 of the Employment Rights Act 1996, a written statement of particulars must be given no later than the first day of employment, with most particulars in a single document. The required contents include the names of both parties, the start date, the date continuous employment began, the pay rate or the method of calculating it, pay intervals, hours of work including whether they may vary, holiday entitlement and pay stated precisely enough to calculate accrued entitlement, sick leave and sick pay, any other paid leave, pensions, other benefits, notice periods, the job title or description, the expected duration if the role is temporary, probation terms and duration, the place or places of work, collective agreements, training entitlement including any mandatory training the employer will not pay for, and terms relating to work abroad for more than one month.

Asia Pacific

Country	Written contract required?	What to know
Singapore	Yes, Key Employment Terms	Mandatory for employees engaged for 14 days or more, issued within 14 days of the first day. Must cover job title and main duties, start date, working hours and days, rest day, salary period, basic salary, fixed allowances and deductions, overtime period and rate, leave types, medical benefits, probation, notice period and place of work. Soft or hard copy; common terms may sit in an accessible handbook
Vietnam	Yes, except for terms under one month	The Labour Code 2019 requires written contracts for engagements over one month, in indefinite or fixed-term form. Bilingual Vietnamese and English execution is standard practice. Confirm the current required contents against the official text
Malaysia	Yes, for terms over one month	Section 10 of the Employment Act 1955 requires a written contract where the specified period exceeds one month, and every written contract must contain a clause setting out how either party may terminate it
Indonesia	Yes for fixed-term	Fixed-term agreements must be in writing. The language requirement is the thing to get right: Indonesian-language execution is expected, with bilingual versions standard practice. Take local advice on this specifically, because it is the most consequential language rule in the region
Thailand	No	Thai law does not require employment contracts to be in writing, nor to be in Thai. Written and bilingual is nonetheless advisable. Separate obligations apply to published work rules above a headcount threshold
Philippines	Generally no	Employment contracts generally need not be written, with specific exceptions. Statutory terms are read into every contract regardless, and contracts of adhesion are construed in the employee’s favour, so a thin contract does not reduce your obligations
India	No single national rule	Obligations arise from state Shops and Establishments Acts, which commonly require appointment letters, and from other instruments depending on the establishment. Do not assume a single national requirement. Check the applicable state

The pattern worth drawing out: in the countries where a written contract is not legally required, that is not permission to skip it. Statutory terms apply anyway, and without a written contract you have no record of the terms you did agree, which in several of these jurisdictions means disputes are resolved against the employer by default.

Background Checks: What You Can Legally Ask, Where

This is absent from every competing guide on this keyword, and it catches out employers who assume that the screening normal in their own country travels.

The structural insight is that there are three different models, and knowing which one applies tells you most of what you need:

• Employer-run checks. You or a screening vendor obtain the information directly. Common in the United States.
• Candidate-obtained certificates. The individual applies for an official document and presents it to you. Common across much of Asia Pacific.
• State-channel only. The check can only be run through an official body, and only for roles where the law permits it. The EU and UK position.

The EU: Criminal Record Data Is Restricted by Default

Under Article 10 of the GDPR, personal data relating to criminal convictions and offences may be processed only under the control of official authority, or where authorized by Union or member state law providing appropriate safeguards. A comprehensive register of convictions may be kept only under official authority.

The practical consequence is stronger than most employers expect. In the EU you generally cannot run your own criminal check, and asking the candidate to self-disclose does not create a lawful basis either. You use the state channel where one exists, and only for roles where national law permits it. National positions diverge sharply, so treat the EU as a framework rather than a single rule.

One trap worth naming: this extends further than formal checks. European case law has held that data revealing criminal proceedings can fall within Article 10 even when it comes from public or press sources, which means searching for a candidate online and acting on what you find is a data protection exposure rather than a safe workaround.

United Kingdom: Four Levels, and Eligibility Matters

DBS level	What it shows	Who can request it
Basic	Unspent convictions and conditional cautions	Any role
Standard	Spent and unspent convictions and cautions	Eligible roles only
Enhanced	Standard, plus relevant information held by local police	Specified roles, such as healthcare and childcare
Enhanced with barred lists	Enhanced, plus a check against the children’s or adults’ barred lists	Regulated activity only

You cannot simply choose the level you prefer. Standard and Enhanced are available only for roles that are legally eligible, and requesting a level you are not entitled to is itself a problem.

United States: Ask Later, Not Earlier

Employer-run checks are normal, but timing is increasingly regulated. Fair-chance or “ban the box” policies restrict asking about criminal history at the application stage. The National Employment Law Project recorded 37 states and more than 150 cities and counties with such policies as of its October 2021 guide, and not all of them apply to private employers. That figure is now several years old, so confirm the current position in the specific state and city before designing your process.

Asia Pacific: Usually the Candidate Obtains the Certificate

Across much of the region the model is that the individual applies for an official record and provides it, rather than the employer running a search. In the Philippines the NBI clearance is the standard document and is routinely a pre-employment requirement. In Vietnam the equivalent is a judicial record certificate, issued in more than one form with different scopes, and there has been regulatory pushback on employers demanding the broader form, so confirm which form you may lawfully request. And in Singapore, Malaysia and India screening is generally consent-based through third-party providers or candidate-obtained documents, and India has no central criminal database available to employers, which means checks are court-record searches tied to address history.

Practical rule for a multi-country process: design your screening policy per country rather than globally, document the lawful basis for each check, and never assume that a check which is routine in your headquarters country is permitted elsewhere. Confirm the current position locally before you run anything, since these rules change and several of the APAC specifics above are worth re-checking with local counsel.

Worker Misclassification: The Actual Tests

Most guides warn you about misclassification. Very few tell you how it is actually assessed, which is what you need in order to judge your own arrangements.

The universal principle first: authorities assess the substance of the working relationship, not the label on the contract. A document saying “independent contractor” carries almost no weight if the facts say employee.

United States

• Department of Labor, current status. This is in flux and worth stating precisely. The 2024 six-factor economic reality rule is no longer being enforced, following a Department announcement in May 2025, though it remains formally on the books. In late February 2026 the Department proposed a replacement reinstating the earlier two-core-factor approach, under which control and opportunity for profit or loss are the core factors, with skill, permanence and whether the work is part of an integrated unit of production as secondary guideposts. That proposal was not final at the time of writing, so check its status before relying on it.
• IRS common law control test. Separate from the DOL analysis, and used for tax purposes. It examines behavioral control, financial control and the type of relationship.
• California’s ABC test. The strictest of the commonly encountered tests. A worker is presumed an employee unless all three apply: (A) they are free from the hiring entity’s control and direction in fact and under the contract, (B) they perform work outside the usual course of the hiring entity’s business, and (C) they are customarily engaged in an independently established trade of the same nature. Prong B is the one most businesses fail, because a developer working for a software company is doing work inside that company’s usual course of business almost by definition.

United Kingdom and Asia Pacific

In the UK, status is determined by common-law tests covering mutuality of obligation, personal service, control and the wider circumstances. Separately, the off-payroll working rules place responsibility for the status determination on the end client where the worker supplies services through an intermediary, for public sector and medium or large private sector clients, with an exemption for small companies. Confirm the current position before relying on it, as this area has changed repeatedly.

Across Asia Pacific the tests are broadly similar in shape, turning on control, integration into the business and economic dependence. Australia has moved toward a multifactor assessment of the real substance of the relationship following amendments in recent years.

The Practical Test to Apply Yourself

Before you engage anyone as a contractor, answer these honestly. The more yes answers, the more likely an authority would call it employment:

• Do you set their working hours?
• Do you direct how the work is done, rather than just what the outcome should be?
• Are you their only or main client?
• Do they use your equipment and systems?
• Is the work part of your core business rather than a distinct specialism?
• Is the arrangement open-ended rather than tied to a defined deliverable?
• Would it be odd for them to send a substitute to do the work?

If most answers are yes, the arrangement is employment in substance. The honest fix is to employ them, through an entity or an EOR, rather than to redraft the contract. Redrafting does not change the facts, and the facts are what gets assessed.

Permanent Establishment: What Actually Creates It

This is the most oversimplified subject in international hiring, in both directions. Some guides ignore it entirely. Others imply that any remote worker creates a taxable presence, or that using an employer of record makes the risk disappear. Neither is right.

What a permanent establishment is. Under Article 5 of the OECD Model Tax Convention, which most bilateral tax treaties follow, a permanent establishment is a fixed place of business through which the business of an enterprise is wholly or partly carried on. There is a second route: a dependent agent creates one where a person acts on behalf of the enterprise and habitually concludes contracts, or habitually plays the principal role leading to the conclusion of contracts that are routinely concluded without material modification. Note that older treaties use the earlier formulation about habitually exercising an authority to conclude contracts, so the applicable wording depends on the specific treaty.

Article 5 also excepts activities of a preparatory or auxiliary character, such as storage, display, delivery, purchasing or information gathering, subject in the current model to an anti-fragmentation rule and to the activity genuinely being auxiliary rather than merely falling into a listed category.

Does one remote employee create a permanent establishment? Usually not, and the honest answer is that it depends on facts rather than on headcount. The questions are whether the worker’s home constitutes a fixed place at the enterprise’s disposal, and whether what they do is core business or genuinely auxiliary.

Raises the risk	Lowers the risk
The worker negotiates or concludes contracts	No contract authority, no customer-facing role
They carry revenue responsibility or a sales title	Purely internal or support function
They hold themselves out as your local presence	They are presented as part of a remote team
You pay for, or require the use of, local premises	Home working is the employee’s choice and you provide an office elsewhere
Their activity is your core business	Their activity is preparatory or auxiliary

And the point most vendor guides will not tell you: an employer of record does not by itself eliminate permanent establishment risk. The test examines what the worker actually does for your business, not who processes their payroll. An EOR removes the employment compliance burden and the need for your own entity. It does not convert a salesperson closing contracts in a country into something that cannot create a taxable presence. If a provider tells you an EOR makes PE risk go away, that is a reason to trust them less rather than more.

Two further points for accuracy. Permanent establishment is a treaty concept, so it applies where a treaty is in force; where there is none, domestic source rules apply and can be broader. And PE is distinct from corporate tax residency and from employer registration obligations, which are frequently conflated with it. If you are hiring a commercial or revenue-generating role abroad, take tax advice specific to the country and the role.

Equity and Stock Options for International Employees

Only one page-1 competitor covers this at all, and it is one of the most common questions founders actually ask. It is also an area where generic guidance is actively dangerous, so this section sets out the decision points rather than pretending there is a universal answer.

Can someone employed through an EOR receive equity in your company? Generally yes, but the mechanism matters. The EOR is the legal employer; your company is the share issuer. So the grant typically comes directly from your company to the individual under your own plan, with the individual signing the award agreement. Cash-settled alternatives such as phantom shares or stock appreciation rights are also commonly used, and are simpler where share grants are awkward in the local market.

Three decision points to settle before granting anything:

• Who issues, and does that create an employment argument? Granting equity directly to someone you do not legally employ can be used as evidence that you are the real employer, which feeds the misclassification question above. Worth raising with counsel rather than discovering later.
• Who withholds? This is the most common compliance break in EOR arrangements. Equity income is usually employment income, which usually means income tax withholding and in many cases social contributions. If your EOR runs payroll and does not know about the grant, those obligations are not being met. Tell your provider about every grant.
• When is the tax point? Countries tax equity at different moments: some at grant, most at vest or exercise, and then again on sale. The timing determines whether an employee faces a tax bill on something they cannot yet sell, which is a genuinely bad surprise and the reason some companies use cash-settled instruments instead.

There is also a securities law dimension. Offering shares to employees in another country can trigger a filing or disclosure obligation, and the available exemptions differ by jurisdiction and usually carry conditions rather than being automatic.

We are deliberately not publishing a country-by-country table of equity tax treatment. The rules are specific, they change, and a wrong entry would cost someone real money. The useful advice is: decide the instrument, tell your payroll provider, and get local tax advice in each country before the first grant rather than before the first exercise.

If You Do Need Relocation and a Visa

Everything above assumes the person stays where they are. If you genuinely need them physically present, the shape of the problem changes.

• You usually need a local entity to sponsor. In most countries the sponsoring employer must be a registered local entity, which rules out sponsoring from abroad with no presence. Some EORs can sponsor through their own entity; many cannot, so ask specifically.
• Timelines are months, not weeks, and in some routes they are quota-dependent or subject to a lottery.
• It can fail. Unlike hiring in place, a visa application can simply be refused, so avoid a plan that depends on one succeeding.
• Costs are real and often underestimated. Government fees, legal fees, relocation support and sometimes a salary floor set by the immigration route itself.

Because of all that, the sequence most companies find works is to hire the person in place first where possible, and treat relocation as a later decision once the relationship is established.

The TalentHero Approach: Your End-to-End International Hiring Partner

TalentHero is an Asia Pacific specialist that both recruits and legally employs, with our own entities in the region. That matters for international hiring specifically, because the two halves of the problem, finding the right person and employing them compliantly, are usually sold by different companies, leaving you to manage the gap.

• Recruitment on Demand. Our recruiters source and screen across Asia Pacific, including passive candidates who are not on the job boards.
• Employer of Record. We employ your chosen hires through our own local entities, with local-law contracts, statutory registration, payroll and withholding handled. See employer of record Vietnam as an example of what that involves in one market.
• Global Payroll. Payroll run against current statutory rates, caps and filing calendars.
• Contractor Management. Compliant engagement where the relationship is genuinely contractor rather than employment.
• Visa and Immigration, Equipment Procurement and Office Space. The practical pieces of putting someone to work in a new country.

For how other companies have approached this, see companies that hire international employees, and for the regional view hiring offshore talent in Southeast Asia.

When a Different Answer Is Better

• A committed team of twenty or more in one country. Your own entity will be cheaper, and the conversation to have is about transition.
• Genuinely independent project work. A properly structured contractor engagement is simpler and cheaper than employing.
• A footprint centered outside Asia Pacific. Our depth is regional. If your hiring is mostly in Europe or Latin America, say so early and we will tell you straight.
• You need to invoice local customers. No EOR solves that. You need an entity.

Your Global Team Awaits

If you have a role in mind, the useful first conversation is not about our services. It is about which structure fits, what the fully loaded cost looks like in that specific country, and whether anything about the role raises a permanent establishment question.

Contact TalentHero and we will give you a straight answer, including when the answer is a model we do not sell.

Frequently Asked Questions

1. How do I hire international employees without a legal entity?

Use an employer of record. It legally employs the person through its own local entity, holds the contract, registers them with the authorities, runs payroll and carries employer-side liability, while you choose the person and direct the work. This is the only structure that works without an entity, because a company with no local presence usually cannot register as a contributing employer at all, so it has no lawful route to pay statutory contributions.

2. Do I need to sponsor a visa to hire someone in another country?

Usually not. If the person already lives and has the right to work where they are, and will keep working from there, no visa is involved. You are solving an employment and tax question instead. A visa is only needed if you want them physically relocated to your country, which is a slower, costlier and less certain route that can be refused outright.

3. How much does it cost to hire an international employee?

Three components: gross salary benchmarked locally, employer statutory contributions which vary from under 8 percent in some markets to over 20 percent in others, and your provider fee if you use one. Published EOR list prices in October 2026 were 599 US dollars per employee per month at Deel and 699 at Remote, excluding statutory employer costs. Contractor management is much cheaper, at 29 to 49 dollars per contractor per month, but only suits genuinely independent work.

4. How long does it take to set up a legal entity abroad?

It varies enormously by country, and we would not give you a single global number. The widely quoted “six to twelve months and 20,000 to 100,000 dollars” range appears on almost every guide to this topic and cannot be traced to any research body or government source. The only genuine cross-country dataset, the World Bank’s Doing Business programme, was discontinued in 2021. Ask a corporate services provider in the specific country for a quote against your circumstances.

5. What has to be in an international employment contract?

It depends on the country, and it is usually statutory rather than optional. In the EU, Directive 2019/1152 requires specified information within 7 calendar days of the first working day and the rest within one month. In the UK, most particulars are due on the first day under section 1 of the Employment Rights Act 1996. Singapore requires written Key Employment Terms within 14 days. A translated home-country template will usually be missing mandatory terms.

6. Can I run a background check on an international candidate?

Not always, and not always yourself. Under GDPR Article 10, criminal conviction data may generally only be processed under official authority, so in the EU you typically cannot run your own criminal check and candidate self-disclosure does not fix it. The UK uses tiered DBS checks with eligibility rules. Across much of Asia Pacific the model is that the candidate obtains an official certificate and presents it. Design your screening policy per country.

7. Can I just hire them as a contractor instead?

Only if the relationship is genuinely independent. Authorities assess substance rather than labels. If you set their hours, direct how the work is done, are their main client, and the work is part of your core business, it is employment regardless of the contract. California’s ABC test is the strictest commonly encountered version, and its second prong, requiring the work to fall outside your usual course of business, is the one most companies fail.

8. Does hiring one person abroad create a permanent establishment?

Usually not, but it depends on what they do rather than on headcount. Under Article 5 of the OECD Model Tax Convention the question is whether there is a fixed place of business at your disposal, or a dependent agent habitually concluding contracts or playing the principal role in concluding them. A support role working from home is low risk. A salesperson negotiating deals is a different matter. Importantly, an employer of record does not by itself remove this risk.

9. Can employees hired through an EOR receive stock options?

Generally yes. The grant comes directly from your company to the individual under your own plan, since the EOR is the employer but you are the share issuer. Cash-settled alternatives such as phantom shares are also common. Three things to settle first: whether a direct grant weakens your position on who the real employer is, who operates withholding on the equity income, and when the local tax point falls. Always tell your payroll provider about grants.

10. What is the difference between an EOR and a PEO?

An employer of record is the sole legal employer and works where you have no entity. A PEO operates a co-employment model, sharing employment responsibilities, and usually requires you to have your own entity. Co-employment is recognized in some jurisdictions and not others, so what is marketed as a PEO in a given country may functionally be an EOR or a licensed labour leasing arrangement. Ask which it is and who signs the employment contract.

11. How do I pay an international employee?

In their local currency, through a compliant local payroll, with correct income tax withholding and statutory contributions remitted to the right authority by the right deadline, and a payslip meeting local content requirements. The practical question is who operates that payroll: your own entity, a local payroll provider, or an EOR. Settle currency conversion terms in advance, including which rate applies on which date.

12. Should I pay international employees my home-country salary?

Benchmark locally by role and seniority rather than applying a cost-of-living adjustment to your own band. Two things to check beyond the number: the statutory minimum versus the market expectation, which are different, and any mandatory extras. A 13th month payment is required by law in the Philippines and Indonesia, and is a near-universal expectation in Vietnam without being legally required, so budget 13 months in those markets either way.

13. Can I convert a contractor to an employee later?

Yes, and it is often the right move once a relationship becomes ongoing and directed. The usual route is an EOR if you have no entity. Two things to handle deliberately: do it before an authority raises the question rather than after, since converting voluntarily is far cheaper than being reclassified, and agree how prior service is treated, because in some countries length of service drives entitlements.

14. What are the biggest risks when hiring international employees?

Four. Worker misclassification, which brings back contributions, penalties and sometimes employee entitlements. A non-compliant employment contract, because contract contents are statutory in most countries. Unregistered employment, where the person is paid but never registered with the local authorities. And permanent establishment exposure where the role is commercial or revenue-generating. None of these show up immediately, which is why they are usually discovered at audit or on exit.