Guide to Hiring International Employees Remotely: 8 Steps

The recruitment and hiring landscape is evolving rapidly, driven by shifts in job seeker priorities and advances in technology. According to LinkedIn’s Global Talent Trends, remote work adoption increased by 47% in 2023, with Latin America emerging as a top region for international hiring due to its skilled workforce, cultural alignment, and overlapping time zones. Reports from Remote.co also show that 62% of companies are hiring globally, reflecting the growing appeal of tapping into international talent pools.

Companies of all sizes, not just enterprises, can now hire internationally with greater ease, leveraging tools and strategies designed for global recruitment. This shift offers massive opportunities, including gaining a competitive edge, expanding market exposure, and boosting productivity.

However, hiring internationally can present challenges, such as communication barriers, time zone differences, and navigating complex legal frameworks.

This article will guide you through the processes of simplifying international hiring, overcoming obstacles, and unlocking the benefits of building a diverse and distributed workforce.

Why Hire International Employees? 

Hiring globally allows businesses to expand their market reach and tap into regional expertise. Employees native to specific regions provide invaluable insights into market gaps, consumer behavior, and local business connections, which are crucial for successful expansion.

Many companies are reaping the benefits of international hiring:

• Apple: Operates supply chains in 43 countries, leveraging global talent to optimize production and innovation.
• McDonald’s: Runs 38,000 restaurants in over 120 countries, with local teams driving market-specific strategies.
• Coca-Cola: Operates 900+ bottling and manufacturing facilities worldwide, relying on regional expertise to streamline operations and meet diverse consumer needs.

In Latin America, companies are increasingly benefiting from hiring local talent. For example:

• MercadoLibre, a leading e-commerce platform in LatAm, expanded its workforce by 35% in 2023 to support logistics and tech growth, capitalizing on the region’s skilled talent pool.
• Globant, an Argentinian IT and software development firm, has grown into a global tech powerhouse by tapping into LatAm’s competitive engineering and software development talent.
• Procter & Gamble: Has localized teams across LatAm that drive innovation in consumer goods tailored to regional preferences.

By hiring internationally, companies not only access specialized skills but also gain a competitive edge through diverse perspectives, market insights, and operational flexibility.

1. Access to a Broader Talent Pool

Hiring internationally opens doors to a global talent pool, providing access to skills and expertise that may be scarce locally. This approach allows companies to leverage diverse perspectives, innovative thinking, and specialized knowledge, which can positively impact business growth.

Latin America (LatAm) has emerged as a hotspot for talent in key fields such as technology, engineering, and customer support, driven by the region’s growing tech ecosystem. For example:

• Tech and Software Development: LatAm countries are producing top-tier developers. The average annual salary for a software developer in Brazil is $15,000, compared to $120,000 in the U.S. (Glassdoor, 2023), offering significant cost savings without compromising quality.
• Engineering: The region’s strong focus on STEM education makes it a hub for skilled engineers in sectors like construction, manufacturing, and renewable energy.
• Customer Support: With cultural alignment and high English proficiency in countries like Argentina and Colombia, LatAm has become a preferred destination for customer service outsourcing.

Top industries hiring in LatAm include e-commerce, fintech, IT, and manufacturing, with companies like MercadoLibre and Globant leading the way in leveraging local talent. The region’s tech ecosystem continues to expand, supported by government investments in innovation hubs and startup accelerators.

2. Enhancing Innovation through Cultural Diversity

A diverse workforce boosts innovation and problem-solving by bringing together varied perspectives and ideas. Teams with cultural diversity are better equipped to address complex challenges and create solutions that resonate with a broader audience.

Studies support this: McKinsey’s report shows that companies with diverse teams are 36% more likely to outperform their peers financially, and a BuiltIn study found that diverse teams make better decisions 66% of the time compared to individuals.

Companies like Microsoft and Google attribute much of their success to diverse teams driving innovation, while LatAm-specific teams have made significant contributions to localized product development. For instance, MercadoLibre has leveraged LatAm talent to create regionally tailored e-commerce solutions, enhancing its market leadership.

LatAm teams provide unique cultural insights, making them invaluable for developing localized products or services. This diversity accelerates problem-solving processes, results in higher-quality decisions, and fosters creativity, ultimately driving better business performance.

3. Cost Efficiency and Competitive Advantage

Hiring international employees, especially from LatAm, provides significant cost savings while maintaining access to skilled talent. Salaries in LatAm are often 50% or more lower than in the U.S., offering companies a substantial financial advantage without compromising on quality.

Here’s a comparison of software developer salaries in Latin America versus the U.S.:

These figures include benefits and payroll taxes for LatAm countries and reflect the substantial cost advantage compared to the U.S. salaries. With savings of up to 85%, hiring in LatAm enables companies to optimize costs while tapping into a skilled and growing talent pool.

4. Expanding Global Market Reach 

A diverse team with regional expertise and cultural insights is invaluable for companies looking to expand into global markets. Latin America (LatAm) offers a unique advantage with its time zone alignment to both the U.S. and Europe, enabling seamless operations across borders.

For example:

• A customer support team in Colombia can cover U.S. hours effortlessly, thanks to its 1-hour time difference with EST.
• Employees in Mexico align closely with PST, making it ideal for West Coast businesses.
• Teams in Argentina can bridge U.S. and European hours, enabling overlapping schedules for critical projects.

This alignment allows companies to provide 24/7 customer support, faster project delivery, and enhanced collaboration, all without significant scheduling challenges.

Companies like Amazon and Uber have leveraged LatAm talent to expand operations, tapping into local consumer insights to tailor their services. Similarly, Spotify has used LatAm teams to drive content localization and market-specific playlists, leading to increased engagement and revenue.

Time Zone Comparison: LatAm, U.S., and Europe

This time zone overlap with key markets ensures smooth collaboration, operational efficiency, and a competitive edge for businesses leveraging LatAm talent.

What Are the Legal Requirements for Hiring International Employees Remotely?

Hiring remote employees from Latin America (LatAm) is an increasingly attractive option for U.S. and European companies. LatAm offers a highly skilled, cost-effective talent pool in convenient time zones. However, while the benefits are substantial, companies must navigate several legal requirements to ensure compliance when hiring through either a local legal entity or an Employer of Record (EOR). These approaches simplify international hiring, but each comes with its own considerations.

Let’s break down the key aspects of hiring remote employees in LatAm and how to stay legally compliant.

1. Establishing a Legal Entity in LatAm

For businesses planning long-term operations in LatAm or hiring multiple employees in the region, setting up a legal entity is a viable option. This approach allows companies to hire directly under local employment contracts, giving them greater control over the hiring process. However, this also comes with significant administrative and financial responsibilities.

Key Steps for Opening a Legal Entity:

1. Registering the Entity
Establishing a legal entity begins with registering your business with the local government. This involves filing with tax authorities, securing business licenses, and meeting compliance requirements.

• Timeline: 2-6 months, depending on the country.
• Cost: $5,000-$20,000 for initial setup, with ongoing compliance costs.

2. Tax Registration
Each country in LatAm has unique tax requirements. For example, you’ll need to obtain a Tax ID, such as a CUIT in Argentina, a CNPJ in Brazil, or an RFC in Mexico. Once registered, your company will be responsible for local corporate taxes.

3. Hiring Local Employees
Local labor laws heavily regulate the hiring process. For example, in Mexico, employees are entitled to mandatory profit sharing (10%) and 15 days of paid vacation after their first year.

4. Ongoing Compliance
Compliance extends beyond setup. Companies must regularly file taxes, manage payroll, and adhere to labor inspections. This requires a dedicated legal or HR team familiar with local regulations.

Challenges:
Although this approach provides full control, it is time-intensive and costly. It is best suited for businesses with long-term hiring plans and significant investment in the region.

2. Hiring Through an Employer of Record (EOR)

For companies looking for a faster and more flexible way to hire in LatAm, partnering with an Employer of Record (EOR) is an excellent solution. Unlike establishing a legal entity, an EOR allows companies to hire employees in full compliance with local laws without creating a local presence.

Benefits of Using an EOR in LatAm:

1. Fast and Cost-Effective Setup
An EOR simplifies the hiring process by acting as the legal employer on your behalf. This allows businesses to onboard employees within 2-4 weeks without the need to set up a legal entity.

• Cost: $300-$700 per employee per month.

2. Full Compliance with Local Laws
With an EOR, you don’t have to worry about navigating complex labor laws, tax obligations, or social security contributions. For example:

• In Colombia, employers contribute 16% to social security and 9% for pensions.
• In Brazil, payroll taxes include 20% social security and 8% severance fund contributions.

3. Simplified Payroll Management
The EOR handles payroll, ensuring employees are paid accurately and on time in local currency, with all taxes and contributions withheld automatically.

4. Flexibility for Expansion
If your company plans to hire across multiple LatAm countries, an EOR makes it easy to scale without the complexity of managing multiple legal systems.

Limitations:
While an EOR is a cost-effective and low-risk solution, the per-employee cost can be higher than direct hiring through a local entity. Additionally, you may have limited flexibility in customizing employment contracts.

Read more: Directory of Global Payroll and EOR Solutions, Best EOR Companies for Global Hiring

8 Steps to Hire an International Employee Remotely

A company seeking to fill vacant positions internationally faces several challenges. These include ensuring compliance with international laws and navigating cultural differences. To address these issues, you can utilise global job platforms like LinkedIn and partner with international recruitment agencies like Globy to meet your hiring needs.

Depending on your needs, here are seven steps to consider when hiring an international employee remotely.

1. Identify Your Needs and Set Clear Goals 

Start by clearly defining your company’s needs and setting specific goals for the roles you aim to fill. Identify the skills required and determine why hiring international talent, particularly from LatAm, offers a strategic advantage.

For specialised roles like software development or data analysis, leverage LatAm-specific platforms such as Computrabajo, Bumeran, and Workana to connect with skilled professionals. Partnering with recruitment agencies experienced in LatAm markets can streamline sourcing and ensure alignment with local labour laws and cultural nuances. Using EOR platforms like Oyster or Remote tailored to LatAm can further simplify onboarding and compliance.

2. Understand the Hiring Process in Target Countries 

To hire internationally, you must comply with local labour laws, covering working hours, minimum wage, anti-discrimination policies, and benefits. Recruitment typically involves posting job vacancies, screening applicants, conducting interviews, and finalising appointments.

In Brazil, the process includes registering employees through eSocial, providing formal work contracts, and contributing to social security and the Severance Guarantee Fund (FGTS). Similarly, in Mexico, employers must offer mandatory benefits like vacation pay and an end-of-year bonus (aguinaldo).

Understanding these country-specific requirements ensures compliance, reduces risks, and streamlines the hiring process in LatAm markets.

3. Choose the Right Recruitment Channels 

Use region-specific platforms like Computrabajo, Bumeran, and Workana to connect with skilled professionals in LatAm. Social media platforms such as LinkedIn and recruitment agencies with local expertise can also help source specialised talent, including software developers and data analysts.

For compliance and onboarding, consider EOR platforms like Oyster or Remote. These platforms simplify legal, tax, and payroll processes, streamlining hiring efforts.

Choosing the right recruitment channel can make a big difference in acquiring the right talent. If unsure where to start, you can partner with a recruitment outsourcing provider to help streamline the process.’

4. Leveraging Recruitment Agencies for Specialized International Hiring

Recruitment agencies offer a strategic advantage for international hiring, especially in unfamiliar markets. They provide access to pre-screened talent pools, reducing time-to-hire by 30-50% compared to in-house recruitment (REC). Additionally, 70% of placements remain in their roles for over a year, highlighting the agencies’ ability to match candidates with the right skills and cultural fit.

Agencies excel in local market expertise, helping companies navigate labor laws, salary benchmarks, and cultural expectations. In Latin America, compliance errors affect 20% of businesses without local hiring expertise (PwC, 2023). Agencies mitigate these risks with a 95% compliance success rate, structuring competitive offers tailored to the region. They also cut the time-to-hire for technical roles to 20-30 days, compared to the global average of 49 days.

Legal compliance is another key benefit. Agencies handle complexities like payroll taxes in Brazil or mandatory benefits in Mexico, avoiding penalties that can exceed $150,000 per violation. Companies using agencies report a 40% faster onboarding process and a 25% improvement in retention rates due to tailored recruitment strategies.

For businesses aiming to scale quickly or secure niche talent, recruitment agencies offer a reliable, efficient, and compliant solution for navigating international hiring challenges.

5. Screen and Interview Candidates 

When screening and interviewing international candidates, leverage remote-friendly tools to ensure an efficient and thorough process. Platforms like Zoom or Microsoft Teams work well for interviews, while tools such as Codility or HackerRank are excellent for technical assessments.

Pay attention to cultural nuances in LatAm during interviews. Candidates from the region often value direct communication, a sense of teamwork, and cultural alignment. Use situational questions to evaluate how well they align with your company’s values and emphasise inclusivity, career growth opportunities, and your commitment to a positive work environment.

Additionally, gather insights from current employees through focus groups or surveys to understand the values and skills that contribute to success within your organisation. This approach ensures you hire candidates who not only have the required skills but also thrive in your company culture.

6. Navigate the Legal and Compliance Requirements 

Hiring internationally requires understanding employment contracts, visa sponsorship, and data privacy laws. EORs simplify compliance by acting as the legal employer, handling payroll, contracts, and labour law adherence. In contrast, setting up a local entity offers control but involves more complexity.

Data privacy is crucial in LatAm, with laws like Brazil’s LGPD and similar regulations in Colombia and Mexico requiring secure handling of employee information. Non-compliance risks fines and reputational damage.

Partnering with local legal or HR experts ensures smooth navigation of these requirements, minimizing risks while establishing a compliant hiring process.

7. Onboard Your International Employees 

Onboarding international employees requires clear communication, cultural sensitivity training, and the right tools. Use platforms like BambooHR or Gusto to manage onboarding tasks, track documentation, and explain local benefits, such as the 13th-month salary in Brazil or profit-sharing in Mexico.

Provide compliant work contracts and orientation programs covering company culture and goals. Enhance integration with virtual team-building activities and mentorship programs. By combining cultural awareness, technology, and compliance, you can ensure a smooth and effective onboarding process.

8. Manage and Retain Your International Workforce 

Managing and retaining a geographically dispersed team requires clear communication and robust engagement strategies. Set realistic expectations by clearly defining goals, roles, responsibilities, and tools for remote collaboration.

Foster retention and engagement by implementing best practices such as:

• Offering flexible work policies to accommodate different time zones.
• Creating regular feedback opportunities using tools like 15Five or Culture Amp to keep employees engaged and heard.
• Investing in career development programs, such as online courses or mentorship opportunities, to demonstrate commitment to growth.
• Providing competitive benefits packages tailored to local markets, such as wellness programs or paid leave.

Companies like Verizon, Chevron, and IBM excel at retaining international talent by focusing on employee satisfaction and building a culture of trust and development. Following their example, you can ensure a motivated and committed remote workforce.

Best LATAM Countries to Hire International Employees 

Latin America (LATAM) is a top choice for hiring international employees, offering a diverse talent pool, cost-effective salaries, and convenient time zone alignments with the U.S. and Europe. Here’s an in-depth look at the best countries in the region for sourcing talent:

I. Mexico

• Top Industries: IT, manufacturing, and customer support.
• Workforce Stats: Over 700,000 IT professionals.
• Salary Ranges: Software engineers earn around $20,000 annually, compared to $120,000 in the U.S.
• Advantages: Mexico’s proximity to the U.S. and its growing English proficiency make it an ideal choice for companies looking to expand their technical and customer support teams. The country is often called the “Silicon Valley of Latin America” for its innovation and tech growth.

II. Brazil

• Top Industries: Technology, manufacturing, and customer service.
• Workforce Stats: Over 1.6 million tech professionals and a rapidly growing startup ecosystem.
• Salary Ranges: Software engineers earn around $15,000–$18,000 annually.
• Advantages: Brazil is a powerhouse for outsourcing services, offering a large, skilled workforce. Mandatory benefits like the 13th-month salary ensure worker satisfaction and retention, making Brazil a smart choice for companies seeking long-term talent.

III. Colombia

• Top Industries: Fintech, software development, and customer service.
• Workforce Stats: A government-backed push has positioned Colombia as a tech outsourcing hub, with an increasing number of bilingual professionals.
• Salary Ranges: IT specialists earn around $20,000–$25,000 annually.
• Advantages: Colombia’s location between North and South America allows access to diverse markets and time zones, and its strong cultural alignment with the U.S. enhances collaboration.

IV. Argentina

• Top Industries: Software development, data analytics, and creative industries.
• Workforce Stats: Argentina’s software sector has grown significantly, with over 500,000 professionals in IT and engineering.
• Salary Ranges: Software engineers earn approximately $15,000–$18,000 annually.
• Advantages: Argentina’s highly educated workforce and technical expertise make it a preferred destination for companies seeking top-tier software developers and data analysts.

V. Chile

• Top Industries: Financial technology, software development, analytics, and data science.
• Workforce Stats: Chile leads in stable economic policies, attracting significant foreign investment and fostering a thriving tech industry.
• Salary Ranges: Software developers earn about $20,000–$25,000 annually.
• Advantages: Chile’s business-friendly environment and access to high-quality talent in finance and data science make it a great option for companies looking to expand their operations.

VI. Peru

• Top Industries: Mining, agriculture, and tech outsourcing.
• Workforce Stats: Growing tech sector with over 300,000 professionals in IT and engineering.
• Salary Ranges: IT specialists earn around $12,000–$15,000 annually.
• Advantages: Peru’s lower cost of living makes it an affordable choice for sourcing talent, while government incentives for tech innovation are boosting its appeal.

VII. Uruguay

• Top Industries: Software development, fintech, and renewable energy.
• Workforce Stats: Uruguay has a strong IT sector, with over 70% of exports in software and IT services.
• Salary Ranges: Software developers earn approximately $18,000–$22,000 annually.
• Advantages: Uruguay’s stable political environment and high English proficiency make it a hidden gem for outsourcing and remote work opportunities.

By understanding each country’s workforce strengths, salary ranges, and top industries, companies can strategically choose the right location to source talent in LATAM. Platforms like Computrabajo, Workana, and EOR services like Deel simplify the hiring process, making LATAM an excellent choice for global expansion.

Read more: Effective Techniques for Hiring Tech Talent from Abroad, Brazilian Cities Are The Next Big Tech Hubs

How to Ensure Compliance When Hiring International Employees

Ensuring compliance when hiring international employees requires a proactive and structured approach. Non-compliance with labor laws, tax obligations, and employment regulations can lead to penalties, financial losses, and damage to your company’s reputation. Follow these practical steps to stay compliant:

1. Partner with Legal Experts

• Collaborate with local legal advisors who specialize in labor laws and tax regulations in the target country.
• Obtain guidance on drafting compliant employment contracts and navigating visa requirements.

2. Leverage EORs for Risk Reduction

• Engage an Employer of Record (EOR) to handle country-specific variations in labor laws, payroll, and benefits administration.
• EORs reduce compliance risks by up to 90%, ensuring adherence to local regulations without the need to establish a local entity.

3. Conduct Regular Audits

• Schedule quarterly audits of employment contracts, payroll, and tax filings to ensure continued compliance with evolving regulations.
• Use audit findings to update practices and address potential risks proactively.

4. Stay Updated on Legal Changes

• Monitor changes to labor laws and tax policies in the target country, as regulations can shift frequently.
• Subscribe to updates from local labor departments or legal firms to remain informed.

5. Train HR Teams on Compliance

• Provide your HR team with training on international labor laws, data protection regulations, and local employment standards.
• Use tools like BambooHR or Workday to centralize and manage compliance-related tasks.

Actionable Example:

For a company hiring in Brazil, an EOR can manage compliance with Brazil’s 13th-month salary requirement, severance fund contributions (FGTS), and social security payments. At the same time, quarterly audits ensure contracts reflect current labor laws, mitigating potential penalties.

By implementing these steps, you can confidently navigate the complexities of hiring international employees while protecting your business and ensuring a positive experience for your workforce.

What Are the Challenges of Hiring International Employees? 

Hiring international employees, whether remote or onsite, comes with unique challenges that require careful planning and strategic tools to overcome. These include navigating regulatory compliance, managing communication barriers, bridging cultural differences, coordinating across time zones, and structuring competitive compensation packages. Successfully addressing these challenges ensures smoother integration and maximizes workforce productivity.

Step-by-Step Process for Overcoming Challenges

1. Sourcing Talent

• Use LatAm-specific platforms to find skilled professionals.
  • Workana: A leading freelance platform connecting companies with IT, marketing, and creative talent in LatAm.
  • Computrabajo: A popular job board for full-time positions across industries in LatAm.
• Partner with recruiting agencies like Globy for hard-to-fill roles in tech, customer support, and engineering.

2. Structuring Competitive Compensation

• Research local salary benchmarks using tools like Glassdoor or PayScale to offer competitive packages.
• Consider cultural expectations, such as the 13th-month salary in Brazil or profit-sharing in Mexico.

3. Navigating Compliance with an EOR

• Use platforms like Deel, Oyster, or Remote to manage payroll, taxes, and benefits in compliance with local labor laws.
• EORs simplify onboarding, ensuring proper worker classification and adherence to legal requirements.

4. Bridging Communication and Cultural Gaps

• Invest in cross-cultural training to promote understanding within teams.
• Utilize communication tools like Slack or Microsoft Teams to foster collaboration.

5. Coordinating Across Time Zones

• Leverage LatAm’s proximity to U.S. time zones to create seamless collaboration.
• Use tools like Clockify or World Time Buddy to schedule meetings effectively.

Pros of Hiring International Employees

• Access to a diverse and unending talent pool.
• Enhanced decision-making with a workforce offering varied perspectives.
• Cost savings by hiring in lower-cost regions with high expertise.
• Local knowledge of language and culture to adapt to new markets and regulations.

Cons of Hiring International Employees

• Risk of discrimination in employment systems.
• Communication barriers due to language differences.
• Challenges in proper worker classification.
• Compliance requirements adding complexity.
• Selection struggles due to unfamiliar markets.
• Difficulty managing time zone differences.

By leveraging structured strategies, LatAm-specific tools, and expert partners like EORs, companies can overcome these challenges and unlock the full potential of hiring internationally.

Conclusion

Hiring international employees, especially in LatAm, offers immense opportunities for businesses to access a skilled and diverse workforce while achieving significant cost savings. By 2023, 68% of U.S. companies hiring remotely expanded to LatAm, citing its strong talent pool, time zone alignment, and affordability as key drivers (Remote.co).

To ensure successful hiring and long-term success, follow these actionable steps:

1. Set clear objectives to define the roles and skills you need.

2. Research and adhere to the hiring processes in your target country, including compliance with local labor laws.

3. Use LatAm-specific platforms like Computrabajo and Workana, and consider partnering with recruitment agencies like Globy or EOR platforms like Deel for streamlined operations.

4. Conduct thorough screening and interviews, focusing on cultural fit and technical proficiency.

5. Implement strategies for compliance by staying updated on local regulations and conducting regular audits.

6. Focus on onboarding and retention with cultural sensitivity training, competitive benefits, and regular feedback loops.

LatAm offers a unique advantage for companies seeking to expand globally, with countries like Mexico, Brazil, and Argentina leading the way in industries such as IT, engineering, and customer support. By following these best practices, businesses can navigate challenges, stay compliant, and unlock the full potential of hiring in LatAm, gaining a stronger competitive edge in the global market.

Future reading: Best Tech Recruiting Agencies, Best Remote Staffing Agencies

FAQs

Article author

Vit Koval

Co-founder at Globy

A top Global Hiring voice on LinkedIn, co-founder of Globy, and host of Default Global. Using deep expertise in global hiring, remote work, and global business expansion to help companies excel worldwide with innovative strategies.