When learning how to hire globally, you'll discover three main approaches – using an employer of record (EOR), creating a legal entity, or working with independent contractors. Each method for hiring global teams serves different business needs and affects your timeline, budget, legal protections, and control over the hiring process. The good news is that your approach can evolve as your international footprint grows.
3 ways to hire global teams
1. Use an employer of record (EOR)
An EOR allows you to hire employees globally without setting up an entity. EORs handle the legal complexities, manage payroll for your global teams, and complete all compliance paperwork. Your company maintains control over day-to-day work management while the EOR handles employment logistics and ensures compliance.
Best for: Quick hiring decisions, testing new markets, small teams across multiple countries
2. Create a legal entity
Creating a legal entity means establishing your own company branch or subsidiary in-country to hire global employees directly. This approach gives you complete control, but requires more time and investment. You'll need to navigate and comply with all local employment laws and regulations when hiring from abroad.
Best for: Long-term expansion plans, large teams in strategic markets, permanent market presence
See the differences between an EOR and a legal entity.
3. Work with independent contractors
Independent contractors provide specialized services for your company without the commitment of full-time employment. This option on the hiring decision tree offers you the fastest path to specialized talent for project-based work, but there are misclassification risks if contractors are managed like traditional employees.
Best for: Project-based work, specialized skills, non-core business functions
Hiring decision tree: comparing your options
|
What to compare |
EOR |
Legal entity |
Contractors |
|---|---|---|---|
|
Speed to hire |
Days to weeks |
Months to years |
Immediate |
|
Starting cost for hiring offshore workers |
Low |
High |
Very low |
|
Ongoing work for internal teams |
Low |
High |
Low |
|
Legal risk when hiring from abroad |
Low |
Low (if done right) |
High (worker misclassification) |
|
Scalability for global teams |
Very easy |
Somewhat easy |
Very easy |
|
Intellectual property protection |
Strong |
Strong |
Requires careful contracts |
|
Worker experience |
Excellent (with right partner) |
Excellent (with thoughtful approach) |
Mixed |
Choosing the right global hiring option
Key takeaways for your global hiring strategy
Learning how to hire globally involves choosing the best approach for your business: EORs for quick market entry, legal entities for long-term commitment, and contractors for specialized projects.
Your hiring decision tree should balance urgency, budget, and strategic goals when deciding how to hire employees globally. Whether you're looking to hire one employee or build a global team, G-P simplifies the complexities of hiring from abroad with expert guidance and comprehensive solutions that ensure compliance while optimizing your international expansion strategy.
FAQs
What are the three main ways to hire globally?
The three main approaches to hire globally are: using an employer of record (EOR), creating a legal entity, and working with independent contractors. Each method serves different business needs and affects your timeline, budget, legal protections, and control over the hiring process. Your approach can evolve as your global footprint grows.
What is an employer of record (EOR)?
An EOR hires people for you in other countries without requiring you to set up a legal entity. They handle all legal complexities of international employment, manage payroll, and complete compliance paperwork while you maintain control over day-to-day work management. Learn more about what is an EOR.
When is setting up a legal entity the best global hiring option?
Setting up a legal entity is best for long-term expansion plans, large teams in strategic markets, and establishing a permanent market presence. This approach gives you complete control over hiring global employees directly but requires more time, investment, and oversight. It's ideal when you have many workers in one location and key strategic markets to develop.
What are the risks of hiring independent contractors internationally?
The main risk of hiring independent contractors internationally is misclassification, which occurs when contractors are treated like traditional employees. This can lead to legal complications and regulatory penalties if local labor laws determine the working relationship constitutes employment. Contractor arrangements also provide weaker intellectual property protection compared to direct employment.
How quickly can you onboard talent using an EOR compared to a legal entity?
An EOR can onboard talent in days to weeks, while setting up a legal entity takes months to years. EORs provide immediate compliance and faster access to global talent without the administrative burden of entity establishment. Legal entities require navigating local regulations, paperwork, and approval processes that significantly extend timelines.
How do I choose the right global hiring option for my business?
Choose based on three key factors: urgency vs. volume, market commitment, and role structure. For urgent needs with fewer positions, use an EOR. For larger teams with long-term plans, consider a legal entity. Test new markets with EORs' flexibility, while permanent presence may justify entity setup for ongoing, business-critical positions.
