How to Hire International Employees?

Hiring international employees requires understanding the legal, tax, and compliance obligations in both your country and theirs. Whether you’re figuring out how to hire a foreign employee, expanding globally, or simply testing new markets, there are several ways to go about hiring foreign workers abroad. Depending on your setup, you can open a local entity, sponsor a work visa, partner with an Employer of Record (EOR), or use a global payroll provider like Papaya Global to streamline the process and stay compliant.

As of today, more and more HR and recruitment managers have top talent at their fingertips. Instead of looking at a database filled with regionally-based candidates, you can hire international employees in just a few steps. When deciding on a platform for helping to hire these international employees, it’s important to understand whether an EOR vs AOR, or PEO is the right choice. In addition to knowing country labor laws and payroll requirements, we’ll walk you through what you need to know when it comes to hiring international workers.

First, let’s go through some of your options when employing hiring international workers.

Option 1: Open a local entity

One of the most common methods of hiring employees in foreign countries is to set up an entity in another country. This gives you the leeway to establish a local branch, hire talent, and legally run payroll in accordance with the country’s labor laws and taxes.

If you work for a company with a large budget looking to employ a significant number of international workers, this could be a great option—but there’s a caveat; establishing a local entity is expensive and time-consuming.

You’ll need a thorough understanding of the country’s labor, corporate, and payroll regulations. You’ll also need to complete and be aware of several bureaucratic processes, such as registering the local business with tax authorities and social security offices. For example, the UAE, Singapore, and Germany each have unique labor codes and tax filing requirements that must be navigated carefully.

If you’re interested in hiring just a couple of employees—as opposed to aiming for long-term stability in that market—you have other choices.
These include hiring through an Employer of Record (EOR), sponsoring a visa, or bringing on independent contractors.

Option 2: Sponsor a work visa (employment or green card sponsorship in the U.S.)

When hiring a foreign employee, many companies start with a sponsorship. In this case, you’d work with the US government and follow regulations that allow the employee to work and live in the US as a non-immigrant. Cuban, Nigerian, and Canadian citizens are just a few nationalities that can receive a sponsorship or green card.

Many foreign workers begin with an H-1B visa and work towards getting a green card for permanent residence. This entire process from start to finish could take workers anywhere from one to five years to get a green card.

This option will also include a lot of heavy lifting for your business in terms of paperwork and protocols.
Because the U.S. government prioritizes hiring local citizens, employers must navigate strict requirements—making it a long and documentation-heavy process.

Option 3: Hire with an EOR in a foreign country

An Employer of Record(EOR), is a way to quickly hire employees abroad without needing to open a local office in that country. Here’s how this model works:

A representative from the Employer of Record will hire your employee in the new location and handle all compliance-related employment needs including: including payroll, taxes, contracts, benefits, and local labor laws.
For example, if a U.S. company uses an EOR to hire in Brazil or Germany, they won’t have to navigate shifting regulations on their own—the EOR handles all updates and ensures compliance.

While the EOR makes sure you remain compliant with local laws and employs the employee on paper, you would manage the employee as you would with any local team member.

Your company would control the employee’s day-to-day responsibilities, while the EOR manages their payroll and taxes. Not only does this ensure you’re following all local laws, but it also helps you hire talent faster, and save money, as an EOR is less expensive than opening a foreign subsidiary An EOR is also ideal for companies that want to hire international employees without opening a local entity, giving them the flexibility to test talent in new markets before fully committing..

Option 4: Hire an independent contractor

Just as with an EOR, hiring an independent contractor can help you save resources. An independent contractor is self-employed, hired to provide specific services. Unlike with a regular employee, independent contractors aren’t entitled to:

• Health insurance
• Compensation insurance
• Insurance coverage
• Paid time off

With international contractor, you’ll gain access to a wider pool of talent, but you also won’t have control over how the work gets done, and their specific working schedule and availability. You may also face worker misclassification, where laws vary from country to country. In Japan, for instance, employers cannot supervise or guide independent contractors, otherwise, authorities may reclassify them as employees, which can trigger legal and financial consequences.

Option 5: Use a global payroll provider

A global payroll provider streamlines the hiring and payment process for international employees—especially if your company already has legal entities abroad.

Not only will a global payroll solution help you manage the entire hiring process from A-Z, but a powerful platform will also have in-house experts to help you stay compliant at all times. This is a great option for companies that have an entity in the designated country.

Overall, when considering EOR vs a payroll provider, a global payroll solution is less expensive than an EOR (if you already have an entity in the country), allowing you to put those valuable resources towards other areas that can benefit the company.

A global payroll provider functions like an extension of your HR and legal team. It simplifies how to hire an employee from overseas, ensures ongoing compliance, and reduces manual admin. This option is also ideal for when you’re hiring several international candidates and want to give them a streamlined experience. Papaya Global helps companies hire international employees with speed, scale, and built-in legal coverage.

Now that you’ve read about five options for employing international workers, you’ll want to know the specific process for hiring a foreign employee to mitigate any challenges that can set you back.

What are the trends driving international employment?

The demand to hire international employees has never been higher. Global hiring is being driven by a mix of economic shifts, workforce preferences, and new technology. These trends are also prompting many companies to transition from contractors to an EOR as they scale globally. Here are four key trends shaping international employment today:

• The rise in remote work
  COVID accelerated it, but it’s here to stay. Companies are no longer restricted by borders when sourcing top talent. As a result, hiring remote foreign employees has become a strategic norm, not an exception.
• Growth in outsourcing
  With the gig economy booming, many businesses are hiring talent from abroad to fill specialized roles—particularly in IT, design, and development. Hiring global employees on a project basis reduces cost without sacrificing quality.
• Global expansion
  Companies are entering new markets faster than ever, but execution lags behind strategy. To scale successfully, employers are hiring international employees to build in-region teams before they launch a local office.
• Skill and talent mismatch
  Domestic labor shortages are pushing U.S. companies to look overseas. Hiring foreign workers abroad opens access to niche expertise—especially in tech, engineering, and healthcare—that’s harder to find locally.

How U.S. companies can hire foreign employees (step-by-step)

Hiring foreign workers in just 4 steps can help U.S. businesses build global teams efficiently—if done by the book. When it comes to hiring employees abroad, the US government has created specific guidelines, ranging from working with the Department of Labor to complying with IRS and immigration regulations. Let’s walk through it.

1. Apply for certification from the US labor department

The Department of Labor aims to protect the rights and job opportunities of U.S. citizens, so you’ll need to prove your case for hiring a foreign worker. To do that:

• Show evidence of your business need to hire a foreign employee.
• Prove the open role meets foreign labor certification requirements.
• Complete and submit the ETA form.
• Demonstrate you’ll pay at least minimum wage.
• Mail in the completed form and supporting documentation.

2. Interview the candidates 
After the Department of Labor approves your certification, you can move forward with hiring international employees. But keep in mind—resumes and formats vary by country.

In some Latin American countries, a photo is standard, while in the U.S. it’s discouraged. EU citizens often list their birthdate, but it’s illegal for U.S. employers to ask about age. Hiring international employees means adjusting to regional norms while staying compliant with U.S. law.

3. Apply for a work visa in the US

The visa process isn’t quick. After selecting a candidate, you’ll need to file a petition with U.S. Citizenship and Immigration Services (USCIS). This can take several months, even up to a year.

Even if your documentation is airtight, immigration issues can delay or derail the process. In some cases, companies may need to start over if a visa is denied.

4. Comply with tax regulations

Each country has its own rules, and hiring foreign workers abroad requires careful attention to U.S. tax laws.

All foreign employees working in the U.S. must apply for a Social Security number. They must also pay payroll taxes just like U.S. citizens.

For employees based outside the U.S., you’ll need to file IRS forms like:

• Form W-8 BEN (for nonresident individuals).
• Form W-2 (for employees, if applicable).

If there’s a mismatch in government records, you might receive a no-match letter. Follow its instructions carefully to stay compliant.

These four steps are just the start of the international hiring process.

There are additional considerations to think through—like how to define roles, manage risk, and stay legally compliant across borders.

Tips for hiring international workers

Hiring global employees comes with logistical, legal, and operational hurdles—but these tips can help simplify the process and reduce compliance risks.

1. Define worker type – Hiring an independent contractor is not the same as hiring an employee. Defining which kind of employee you’re hiring will help you set expectations for your company and the employee, as well as stay compliant with country labor laws, tax policies, and more.
2. Understand local law – Each country has their own legal process. For example, Singapore has separate permits depending on the employee’s skills. You’ll need to know the difference between remote and overseas expansion hiring and how to comply in each scenario.
3. Draft employment contracts – After you choose your candidate, you’ll need to create an employment contract based on the local employment law. International employment contracts are a legal requirement, so make sure you draft one and that it protects you, the employee, and outlines your internal policies or rules.
4. Plan onboarding – A positive onboarding experience will not only help you retain talent, but it will enhance their experience with your company, setting them up for success. Compile information such as their role and responsibility, introduction to their team members, insight into the company culture, a checklist of tasks to complete during the first month, and more.
5. Use global payroll tools – A global payroll platform can make the difference between staying compliant in every country you work in and facing serious fines for misclassifying your employees.

As an HR professional, you likely have plenty of experience hiring international remote workers no matter where they’re from. But when it comes to the payroll process, it can get a little complicated.

How to pay international employees

After deciding on how to hire your employee, whether through a local entity, an EOR as an alternative to payroll or contractor models, or an independent contractor, and so on), you’ll need to consider which currency you pay them in, what their working hours will be, when you’ll pay them, and any other elements where you’ll need to comply with labor laws.

When it comes to actually submitting payment for international employees, you have three options:

• Keep the employee on their home country’s payroll – If your employee will temporarily work overseas, you may not need to switch payrolls. Follow the legal requirements of your country and the country where the employee will work when making this decision.
• Use a local payroll company in the designated country – Bringing on a payroll provider can help you avoid misclassification or breaking any tax or compliance laws. A local payroll provider can also provide the best experience for your company and the employee that will suit everyone’s needs.
• Outsource your global payroll process – A local payroll provider can benefit smaller businesses looking to expand into one country. But multinational companies may prefer a global payroll automation solution that consolidates payroll cycles across regions—so all records, reporting, and payments stay organized, accurate, and compliant with contractor and employee classification laws.

For enterprise-grade compliance and workforce payment control, a global payroll platform is the most secure and scalable solution.

How to expand globally and stay compliant

Hiring international employees is only half the battle. Without proper infrastructure for payroll, taxes, and benefits, companies risk fines, misclassification, and inefficiencies.

Luckily, a global payroll solution will know the ins and outs of labor laws in every country—so you can focus on what matters most: growing your business. With a trusted provider like Papaya Global, you’ll get direct access to experts who proactively manage legal risk and ensure full compliance at every step.
Most importantly, Papaya offers the full package: benefits administration, global payments, contractor classification, workforce compliance, and strategic onboarding—all under one unified platform. No matter where you’re hiring from, you’ll always be covered.

Hire international employees safely and effortlessly with Papaya

The new year brings more than confetti and champagne. For many companies, it’s another chance to expand the business. But hiring international employees means knowing which strategy will work best for you, which documentation you’ll need, a checklist of hiring-musts, how to pay overseas workers, and most importantly, how to stay compliant.

If you’re deciding whether an EOR is right for your workforce or you’re looking for another solution, safely grow your team—and skip the red tape—with Papaya Global’s international hiring platform. Schedule a demo today.