According to our most recent State of Global Hiring Report, international hiring is sustaining momentum, with 89% of contracts on Deel created for remote workers. But hiring an international employee requires more than putting “Remote OK” on job boards.
Establishing yourself in a new market involves time, legal expertise, and a fair amount of risk, which is why companies seeking global expansion use companies like Deel for international hiring, payment, and compliance.
Keep reading to learn about the most common global hiring options, including the process, degree of support, and scalability of each.
Disclaimer: This post is for informational purposes only and should not be considered legal advice. Though this content focuses on US employers, Deel enables companies worldwide to hire, pay, and manage their global teams.
How to hire an international employee
Companies have multiple options for international hiring:
- Set up a local legal entity (foreign subsidiary) wherever you want to hire
- Sponsor foreign employees to obtain a work visa and relocate to your country
- Use an employer of record (EOR) to engage and pay employees
The alternative option is to hire international contractors instead of employees.
Open a local subsidiary wherever you want to hire international employees
A foreign subsidiary is a legally independent business entity set up in a foreign country under the holding company’s control.
Another name for this type of entity is a daughter company. The parent company can have complete ownership, but the subsidiary must operate according to its location’s laws and tax liabilities. Once you set up a foreign subsidiary, you can legally hire employees in that country. If you want to hire in additional countries, you’ll have to repeat the process for each.
Which companies should open a local subsidiary?
Opening a local subsidiary takes the most time but allows companies to open a physical location and establish a strong brand in another country. Consider setting up a foreign legal entity if you:
- Plan to expand to only one country
- Want to develop a strong presence and brand awareness
- Need to open an office or manufacturing facility in another country
- Understand that country’s tax requirements and local labor laws
Proceed with caution unless you have sufficient time and legal counsel. Opening a company in a foreign country means studying local employment laws, understanding local tax laws, preparing extensive paperwork to ensure compliance, opening local bank accounts, and more.
Consider other options if you want a fast and affordable international hiring solution.
Sponsor an international employee to obtain a visa
Visa sponsorship is the process of working with the government to allow a foreign employee to work and reside in a country as a nonimmigrant.
You can receive visa mobility support for 21 countries through Deel. Our in-house team handles the entire visa process for you. Request visa support from our team and we’ll assess the employee’s eligibility based on local requirements, engage the employee via our EOR solution, and start the application process.
Hiring a non-US citizen for a US company
The process of acquiring a US visa for your foreign employee includes a lot of paperwork and red tape. The US government generally prefers US companies hire US citizens.
Most foreign professionals start with an H-1B visa for temporary, nonimmigrant residence and work toward a green card for permanent residence.
The first step in the visa process is to fill out the Labor Condition Application and get approval from the US Department of Labor (DOL). Then, you need to gather different forms and documents, and:
- State you’re hiring the foreign person willingly
- Prove that no US resident was suitable for the position for which you hired the foreign person
- Guarantee your foreign employee will have a comparable salary to a similar US worker
Finally, you’ll submit this documentation to the US Citizenship and Immigration Services to receive the H-1B visa. You’ll repeat the process to receive permanent labor certification.
🎥 Watch a webinar: Streamline international hiring with EOR visa sponsorship
Which companies should sponsor international employees?
Visa sponsorship is the best option for employers hoping to bring foreign employees into the organization’s home country. Consider visa sponsorship if you:
- Are unable to offer remote work
- Want to bring in a foreign employee to work on-premise and avoid differing time zones
- Want to hire a foreign worker seeking relocation
- Want to create a more diverse company culture and inclusive in-person team
Hire using an employer of record
An EOR, also called an international professional employer organization (PEO), is a company that engages and pays one or more employees to provide services to another company. An EOR enables companies to legally work with employees in another country without setting up an office in that country or region.
EORs set up local entities in countries around the world. They can engage anyone, anywhere—no need to relocate your employees. EORs also comply with local tax regulations, labor laws, and payroll, so you can focus on finding and growing great talent (not compliance).
For example, a US company can partner with an EOR to easily hire and pay remote workers in Switzerland or Brazil. Likewise, an employer from Belgium can hire a US worker and provide employee benefits required by the US.
One of the major benefits of hiring foreign employees using an EOR is that you gain access to a wider pool of talent in almost any country. If your goal is to go global, an EOR is a safe and fast option.
Which companies should use an EOR?
Outsourcing international hiring to an EOR makes sense for companies that want to grow into a global market or work with international workers from many countries. Consider partnering with an EOR if you:
- Can’t afford (or don’t want) to register local entities to hire global talent
- Don’t have the expertise to ensure compliant contracts and clear distinction between contractors and employees wherever you hire
- Are comfortable working with remote employees
- Need to onboard new hires fast
- Want to outsource your global payroll and onboarding, in addition to hiring
- Want to offer your employees a robust suite of benefits and perks
Take your pick. Find the best talent for your team and leave the rest to Deel.
Bonus option: Hire independent contractors instead of foreign employees
Hiring independent contractors is another accessible form of international hiring, especially for companies that have fluctuating or unpredictable needs.
Unlike full-time employees, independent contractors work on their own schedule, use their own equipment to perform the work, and are usually considered self-employed by the Internal Revenue Service (IRS). The companies they work for are their clients, not employers.
Independent contractors are in charge of their own taxes and don’t receive protections and employee benefits like workers on a company’s payroll.
Many companies hire local and non-US contractors. Hiring non-US citizens is different than hiring US contractors because:
- Their income isn’t US-sourced, so it's not subject to US taxes
- They need to fill out the Form W-8BEN (or W-8BEN-E if they own a business) to prove they don’t have US citizenship
- They don’t need a green card, work permit, work visa, or any other permissions for temporary or permanent residence
Which companies should hire independent contractors?
Companies hire independent contractors because they are generally more cost-effective and offer more flexibility than full-time employees. Consider hiring a foreign independent contractor if you:
- Need temporary or project-based labor
- Don’t have the budget to offer employee benefits such as social security, health insurance, or worker’s compensation
- Don’t have the bandwidth to train and nurture a full-time employee
- Are ready to make international payments
Learn more about hiring foreign independent contractors.
Frequently asked questions about the international hiring process
Find even more information about hiring overseas in the FAQ below.
What are the consequences of hiring a foreign worker illegally?
Illegal hiring of foreign nationals can cost US companies:
- Fines up to $2,000 USD per employee
- Criminal charges and potential prison time for managers and owners
- Damaged company reputation
Companies who knowingly hire someone unauthorized to work in the US face the most severe consequences.
Do employers pay for green cards?
Employers typically cover all fees related to the permanent employment certification process. The employee typically covers the cost of private legal counsel if they seek it, but if the case attorney represents both sides, the employer pays all costs related to the process.
Can a US company hire a foreign freelancer?
Freelancers are similar to independent contractors in terms of employment law. Freelancers and independent contractors operate slightly differently, but hiring a foreign freelancer follows the same process as hiring a foreign independent contractor.
How much does hiring an international employee cost?
An employer’s international hiring costs will vary by country, compensation, mandatory benefits, and local employment laws. Use our employment calculator to estimate the cost of hiring an international employee.
Hire international employees in 100+ countries with Deel
Global employment has never been more accessible. Whether you want to employ independent contractors or onboard new full-time employees, you must understand each country’s labor and tax laws to reduce your risk of misclassification.
But compliance doesn’t have to stop you from diving into the global talent pool—especially with Deel, the simple solution for international hiring.
Deel ensures each contract signed by a full-time employee or contractor is entirely compliant with local regulations in over 150 countries. Learn more about how Deel’s EOR model can help you build a global workforce.
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