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Hiring Remote Foreign Employees

A Comprehensive Guide to Hiring Remote Foreign Employees

US companies can hire remote foreign workers. Discover the benefits, best practices, legal requirements, and tips for success.

A Comprehensive Guide to Hiring Remote Foreign Employees

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Remote work is here to stay. Businesses of all sizes must adapt and adjust their recruitment practices and learn how to hire remote foreign workers. 

Hiring employees from different countries has many advantages and challenges that need to be considered. This guide will explore the ins and outs of recruiting a foreign employee, including legal requirements, cultural considerations, and communication barriers. 

By the end of this article, you’ll know how to hire foreign workers and be ready to accelerate your journey toward building and scaling your team with international remote employees.

Can US Companies Hire Remote Workers From a Foreign Country?

The answer is yes—US companies can hire international workers legally. However, in most cases, you cannot hire a remote team as direct employees unless you have a legal entity in the workers’ country of residence. But there is another option: hiring them as independent contractors.

Contract arrangements still allow you to provide an employment-like experience with full-time roles and paid time off (PTO). Additionally, it’s possible to offer other employee benefits, such as health insurance or gym memberships, through online methods. 

This makes it easier to ensure your remote foreign workers have access to all they need for optimal job satisfaction and performance.

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6 Main Benefits of Hiring International Remote Workers

Hiring international employees has several benefits. Here are some of the most relevant to your bottom line.

1. You’ll have more talent to pick from

When hiring across borders, companies benefit from having access to a much larger talent pool of qualified professionals. By tapping into global markets, you can find the right candidate with the necessary qualifications. 

Furthermore, by broadening your search criteria beyond local geography and language barriers, you can also discover new areas of expertise that may have been previously unavailable or overlooked.

2. It’s good for branding

Having a multicultural workforce is great for branding and attracting future candidates. Working with people from different countries can create a vibrant and stimulating work environment, helping you develop your employer brand. 

This type of cultural exchange shows that you value diversity, collaboration, and a diverse approach to problem-solving and creativity.

3. You’ll always be on time

Tapping into the global workforce lets you employ talented professionals in other parts of the world. Having such a presence across different time zones can be a huge advantage. For instance, if you need an employee covering certain working hours on other continents, you can hire a remote foreign worker close to that region. 

Alternatively, if you prefer working with someone close to your own time zone, then hiring remote foreign workers from Latin America (LatAm) may be ideal for your needs.

4. You can pay lower salaries

One of the major benefits of hiring remote foreign workers is that their salary expectations are often lower than those of domestic employees due to their lower cost of living. Depending on the country, living costs can be significantly less than in the US.

For example, some countries like India have relatively low minimum wages, at only $2.15 US daily, meaning US employers can gain significant cost savings compared with domestic talent while still offering competitive salaries to remote workers in relation to their own local labor markets. 

Companies in the US hiring qualified remote foreign workers from LatAm can save anywhere from 30–70% of what they would pay to a US employee.

You can take advantage of these cost savings by investing in a talented foreign workforce while reallocating resources to other areas, such as marketing, product development, or customer service.

5. Diverse work culture and new perspectives

When hiring remote foreign employees, it is important to understand the nuances of work culture in different regions. Depending on your potential worker’s location, their values and behaviors may differ from your company culture. 

However, those values, behaviors, and abilities can bring a unique set of benefits to your work culture. Remote foreign employees have the potential to introduce different perspectives, skill sets, and cultural influences that may not be available from domestic staff. 

This variety of influences can help you create an enriched environment where ideas are exchanged more openly and collaboratively.

6. Language skills

If you are looking to expand into international markets, hiring a remote worker who speaks different languages can enable you to work more effectively with customers and other stakeholders in their native language.

It can also provide your organization with invaluable insight into how operations and communication may need to be adapted for certain markets or clientele. 

Woman working remotely from her laptop and tablet

How To Hire Remote Foreign Workers

There are two main options when it comes to sourcing remote foreign candidates: doing it yourself or using an agency recruiting service. 

Do it yourself

If you decide to source candidates on your own, there are several steps you should take to ensure you have a successful international hiring process:

  • First, determine what skills and qualifications your ideal candidate should possess. 
  • Develop a job description that clearly outlines the position’s role, responsibilities, and expectations. 
  • Post this job description on popular job boards—such as Indeed, LinkedIn, and Glassdoor—in countries where potential candidates may reside. You may also want to consider using social media platforms, like Facebook and Twitter, to spread the word about your job opening. 
  • Reach out to relevant professional groups or organizations and ask them to share your listing with their members. This will help you reach a larger audience of potential candidates who may not be familiar with traditional job boards. 
  • Network with other professionals in the same industry as well; they might know someone interested in working remotely for your company from abroad.
  • Select the most promising candidates to proceed to the interview stage. Document your interviewing process to ensure you ask each candidate the same questions.
  • Before you finalize a hire, make sure you have implemented a strong virtual onboarding process to set up your new foreign worker for success.

If sourcing and screening candidates on your own seem like too much work for you or your organization, an agency recruiting service could be the answer.

3 options for hiring workers from another country

Before you jump in and start hiring your foreign workers, it’s important to understand the three primary options for doing so: setting up a legal entity, partnering with a Global Employer of Record (GEOR), or hiring and engaging contractors.

1. Set up a legal entity

Setting up a legal entity allows you to hire workers directly from another country without relying on an intermediary partner. This requires significant upfront costs and administrative effort – including registering your business in that country, obtaining necessary licenses and permits, understanding local employment laws and regulations, and setting up a payroll system.

2. Partner with a global employer of record

Partnering with a global employer of record can help you simplify the process by taking care of all the paperwork on your behalf. An employer of record (EOR) is a legal entity that enables businesses to hire foreign employees without needing to set up a subsidiary or branch office in the employee's home country. 

The EOR acts as an employer on behalf of the business, taking responsibility for all associated paperwork and compliance related to hiring and employing personnel abroad. 

This includes things like salary payments, payroll taxes, regulatory compliance, and other tasks necessary for the employment relationship between the business and its foreign employees. 

Using an EOR is generally less expensive than setting up an entity but also means that you are relying on a third party.

3. Hire and engage contractors

Engaging contractors is an attractive alternative for many companies looking for foreign employees because it does not require setting up a legal entity or partnering with an employer of record. 

It also allows you to take advantage of local talent without establishing a long-term relationship with that person or company. However, this approach has some unique challenges related to taxation, visas, and other compliance requirements. 

No matter your choice, it is important to understand the legal obligations of hiring foreign employees and ensure that your business operations remain compliant with local laws. 

Use an agency

Professional recruiters can help you find the right candidate for your remote position and streamline the hiring process. They have access to a large network of professionals who are looking for opportunities such as yours, so they’ll be able to identify and present qualified candidates quickly. 

When selecting a recruitment agency, make sure that they specialize in remote foreign hires. Ask them about their experience with international clients, how they source candidates, what screening processes they use to evaluate applicants, etc. 

This will help ensure that you choose the right partner to assist you in finding the best candidate for the job.

Recruiter and client talking about hiring

9 Common Questions About Hiring Remote Workers in Other Countries

1. Does a remote worker have to pay US taxes? 

No, not necessarily. Generally, remote workers are only required to pay taxes in the country where they reside and work. However, some countries may require that you withhold taxes from a foreign employee’s paycheck or submit tax documents on their behalf.

Here is a list of documents you may be required to submit if your worker is an employee and not a contractor: 

  • A completed Form I-129, Petition for a Nonimmigrant Worker, and the filing fee
  • An IRS 1099 Form documenting forms of payment
  • Evidence of a valid employer-employee relationship (if they are not a contract worker)
  • Evidence of the foreign worker’s qualifications for the position
  • Proof that hiring a foreign worker will not adversely affect working conditions or wages of similarly employed US workers 
  • Payment of fees associated with obtaining an employment visa (if applicable)
  • A Form W-2, which is required for ICE to review the I-9 Form (if a visa is required)

Form W-8BEN, also known as Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting, is the exception—international contractors must fill it out to prove their foreign classification with the IRS.

It is always best to consult with an experienced immigration attorney when filing paperwork for a foreign worker’s visa to ensure accuracy and compliance with all applicable laws and regulations. 

You should also use an attorney’s advice when determining if a worker is an employee or a contractor, as misclassifying your workers could lead to penalties down the road.

2. Do I need to worry about paying taxes in their home country?

Yes, when you hire a remote worker in a foreign country, it is important to consider the taxation laws of their home country.

Depending on the specific regulations in that country, you may be responsible for paying taxes on behalf of your employee. However, if you partner with a remote hiring agency, they may take care of this process for you. Alternatively, you can hire workers as contractors to avoid many taxation issues.

3. Do I have to take care of remote workers’ benefits like health insurance?

It depends. If you are hiring remote foreign workers in an employee/employer relationship, you do need to account for remote workers’ benefits such as health insurance. Depending on the country you are hiring in, there may be certain legal requirements that you must meet to offer a fair and safe employment package to your remote worker. 

However, if you plan on hiring your foreign workers as remote contractors, you are not required to pay for benefits. This is one of the reasons why hiring remote workers on a contractual basis is so desirable for US companies.

Paperwork on remote workers' benefits, along with calculator, paperclip and a pen

4. Are remote foreign workers independent contractors?

It depends. Generally, you should treat foreign remote workers as independent contractors if they provide services independently and without direction from your business. Nevertheless, it’s always best to consult with a legal expert in each country where you plan to hire remote foreign workers before making any decisions.

5. How does the remote contractor model work?

This model is a great way to bring on remote workers from other countries because it allows you to hire individuals on a freelance basis rather than having them as full-time employees. This can provide you with flexibility and cost savings regarding taxes and payroll administration. Additionally, it offers flexibility and often better salaries for remote contractors.

Essentially, businesses contract with an individual or company to do specific tasks for them that can be performed remotely. As part of this arrangement, the contractor agrees to take on a certain amount of work or number of hours per week and to return specific deliverables. 

The business pays for these services directly without having to set up payroll or manage the employee’s taxes.

6. Does an international remote worker need a visa?

No, they do not. Foreign remote contract workers don’t require visas because they are based outside of the US. While these workers may have to come into the country occasionally to fulfill their contractual obligations, they shouldn’t have any issues entering as long as they can provide proof that their stay will be temporary. 

7. Should I pay for remote workers’ equipment?

This usually depends on the working relationship. If your foreign remote worker is an employee, you should pay for the necessary equipment they need to do their job. Depending on the specific role, this could include things like a computer, software licenses, or other tools. 

It’s important to ensure that your foreign employee has everything they need to be successful and productive working from home. However, if the employee is a contractor, you are not required to pay for their equipment. 

8. Do remote foreign employees have good internet service?

The speed and reliability of internet service have improved significantly in many parts of the world in recent times. However, if you’re hiring remote employees in a country with less developed infrastructure, there may be bandwidth and connection speed issues.

Make sure to research the country’s local internet access before making any remote hires. You can also assess this when you conduct virtual screening interviews

9. How can I retain top remote international talent?

Retaining top talent is essential when hiring remote foreign employees. To ensure the best results, provide competitive compensation and benefits that are tailored to the particular country’s job market. 

You should also stay in touch with your workers by setting up regular check-ins and providing ongoing feedback about their performance. Finally, offering career growth opportunities such as training programs or promotions can help keep your remote team motivated and engaged.

Employee filling out a form in front of employer

How To Pay Foreign Employees Who Work Remotely

As your business expands and you look to hire remote foreign employees or foreign contractors, it’s important to consider how you will pay them. Fortunately, various services now make it easy to pay foreign workers remotely

Platforms such as Deel, Multiplier, and Provide allow you to quickly and securely pay your international staff without requiring expensive or complicated wire transfers. When using these platforms, be aware of different tax implications depending on the country where your employee is based. 

Here are some details on each of the abovementioned services:

Deel

To use Deel, you must first verify your identity through a secure authentication process. Once verified, you can set up payment methods for your remote employees in multiple currencies, including US dollars and euros. 

You also have access to automated payrolls and reporting tools, making it easier to manage payments efficiently. 

Multiplier

Multiplier is another great option for paying international staff remotely because it allows you to quickly and securely manage all aspects of payroll, from hiring to paying out salaries. 

It also offers an integrated tax calculator so that you can ensure you pay the correct amount of taxes in each country. 

Provide

Provide is an excellent platform for paying remote employees around the world. You can set up payment methods with automated payrolls and access to a variety of currencies, including US dollars, British pounds, and euros. 

The platform also offers advanced reporting tools that easily track payments and tax liabilities quickly and accurately. 

No matter which platform you decide to use for paying your international employees remotely, remember that it’s important to research thoroughly before committing to ensure you’re getting the best solution for your business needs.

Which Roles Are Suitable for Hiring International Remote Workers?

Remote work is well suited to a wide range of roles. Here are just a handful of roles in which remote workers are highly successful:

  • Administrative support
  • Virtual assistants
  • Customer service
  • Finance
  • Marketing
  • Software engineering and IT

With proper planning and organization, remote foreign hires can thrive in a great variety of roles in your business.

Should You Hire Offshore or Nearshore Remote Workers?

There are two main approaches to hiring remote foreign employees: offshore and nearshore recruitment. 

Offshore workers are located in a country far from your business’s home base, usually in a significantly different time zone. Nearshore workers, on the other hand, are located in geographically closer countries with similar time zones. They may share cultural similarities that make it easier for them to integrate with your organization’s culture.

Employer and employee shaking hands

Pros and cons of offshore vs. nearshore employees

There are advantages and disadvantages in hiring each employee category; let’s examine the pros and cons.

Offshore workers:

  • Provide access to a larger pool of global talent
  • Lower labor costs
  • Bring diverse cultural backgrounds that can add unique perspectives to projects. Typically make use of cutting-edge technologies 
  • Possess extensive experience working on an international team
  • Have less of an understanding of local culture, laws, and regulations, which can lead to communication issues or unexpected delays in completing projects
  • Language barriers
  • Time zone differences

Nearshore workers:

  • Provide access to a larger pool of global remote talent
  • While salary costs are sometimes lower, wages are higher than offshore workers, and overhead expenses may be increased
  • Geographically close to the employer’s home country
  • Better collaboration between teams due to similar cultures and time zones
  • More familiar with local customs, language, work culture, and labor policies
  • Easier to integrate into existing operations
  • Although time zones are similar, there are still substantial differences in scheduling to work around

As you can see, there are benefits and trade-offs to employing both types of workers, so it’s important to understand your requirements to ensure you hire international employees from the right location.

When should you hire offshore and when should you hire nearshore?

Offshoring can be the ideal approach if you’re primarily looking for lower costs. The cultural differences of offshore talent may also provide valuable insights into new markets or customer preferences. 

On the other hand, nearshoring enables you to hire highly skilled talent that offers both cultural and time zone alignment, which is great for smooth communication and collaboration.

Why should US companies hire LatAm in particular?

US companies have much to gain by hiring remote foreign employees, and LatAm is a particularly attractive region for remote recruitment.

LatAm countries boast an educated workforce with high English fluency levels, making them ideal partners for US-based businesses. On top of this, there are many more benefits to sourcing your workers from south of the border:

Lower salary costs

In LatAm, salary expectations tend to be much lower than those in the US. It’s possible to hire skilled professionals for considerably less than their US counterparts for the same role. Plus, you’ll likely still be able to offer them significantly more than they would make working in their home country, so everyone benefits.

Convenient time zones

LatAm operates within time zones similar to the US. This makes it easier for team members to interact, collaborate, and build a better work environment for all. 

Increased diversity

By sourcing talent from different areas, you can quickly diversify your team in terms of culture, ethnicity, language, and experience. By bringing new perspectives to the table and identifying with a new client base, your LatAm workers can help you win business in new markets.

A whole new work outlook

Compared with the US, the team’s success tends to be prioritized over individual success in LatAm. This encourages employees to work hard, knowing their efforts will positively impact the whole group. 

It also creates a sense of community and belonging within the company, increasing employee loyalty.

These are just a few of the many advantages you will discover when you decide to source your remote employees from LatAm.

Diverse team standing and linking arms

Final Thoughts

Creating a successful remote workforce requires strategic planning and thought, but the rewards can be worth it for many businesses. The key takeaway is that creating a global team opens up opportunities to increase productivity and innovation while lowering employment costs. 

If you have any additional questions about hiring remote foreign employees or want to learn more about the process, schedule a complimentary remote recruiting consultation with Near. Our knowledgeable experts will help you start your remote hiring journey successfully. 

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