How to Hire International Employees Without an Entity

Expanding your team internationally is a smart, strategic move—whether you’re exploring new markets, accessing global talent, or scaling up operations. But traditionally, this meant setting up a legal entity in each country—an expensive, complex, and time-consuming process.

The good news? You no longer need to take that route.

Today, businesses can hire international employees quickly and compliantly without establishing a foreign subsidiary. In this article, we’ll walk you through modern hiring solutions—like Employer of Record (EOR) services and international contractor models—that simplify global expansion while saving time, money, and hassle.

Let’s explore your options and help you find the best fit for your business.

How to Hire International Employees without Establishing a Legal Entity

Businesses can now tap into global talent without the need to set up a local legal entity. Two popular options are hiring international contractors or partnering with an Employer of Record (EOR). Each path offers distinct benefits—such as faster market entry, reduced costs, and minimized compliance risks.

The right choice depends on your company’s expansion goals, risk tolerance, and budget. In the sections below, we break down both approaches to help you decide what’s best for your business.

Hire and Pay International Contractors

For businesses looking to dip their toes into global hiring, engaging contractors is an excellent first step. Contractors allow you to fill skill gaps, complete short-term projects, and remain flexible in your hiring commitments.

Advantages of Hiring Contractors

One reason the contractor economy has grown so much is their ability to handle projects. They can easily scale up or down based on client needs and market conditions.

Another reason many organizations use Independent Contractors for small tasks is to reduce costs. This approach helps them avoid administrative and infrastructure expenses. Additionally, contractors do not need the same benefits as full-time employees.

Contractors are very helpful for companies with changing workloads or projects that need special skills. Contractors can be game changers when you bring together multiple contractors from different countries. This mix helps create diverse ideas, which boosts creativity and innovation.

Risks and Challenges Associated with Hiring a Contractor

Using contractors gives you great freedom. However, there are many negative consequences to consider, mainly related to:

1. Workers Misclassification

Many nations across the globe have stricter criteria for labor classification. If you do not raise the correct invoices and pay them on time, your organization may face legal issues. These issues can range from a small fine to losing hundreds or thousands of dollars. We have learned from our experiences that in India, you may encounter a situation with PE Risk. This stands for Permanent Establishment Risk.

 2. Restricted Sustainable Development

I am sure this is one of the most important reasons why organizations avoid using contractors for key functions. The contractors do not have a personal stake in the work. They often lack the dedication needed to make a difference. They follow their Standard Operating Procedures (SOPs) closely. This makes it hard to build a committed and cohesive team. This is especially true if you want to do it with a global workforce.

Partnering with an Employer of Record (EOR)

Partnering with an Employer of Record (EOR) is the magical wand that will set things straight for you. I have learned that using Employer of Record services helps companies operate consistently. This approach also supports long-term success. Why do I love EOR services, you ask? It’s simple. EOR lets you focus on what you do best. It gives you total control over operations. At the same time, it acts as your legal employer for international employees.

What Does an Employer of Record Do?

Frankly, if someone asks me what does an EOR do, my reflex answer would be it does everything you need for your employees. I know that is too vague. Let me explain what EOR covers with its focus on administration and compliance.

1. Create employment contracts that are legal and compliant
2. Managing local tax withholding and payroll
3. Monitoring and management of employee benefits and insurance
4. Help with travel arrangements and visa documentation
5. Guaranteeing adherence to local employment rules
6. Providing continuous legal and HR support

Your EOR handles all these tasks like a pro. This means you do not need to create a legal entity in a foreign country. The EOR acts as the legal employer for you.

Key Benefits of Partnering with an Employer of Record

Smooth Navigation Through Compliance 

Local labor laws change significantly with each country. This is where local legal knowledge from an Employer of Record, such as Remunance in India, is useful. It helps your company comply with the law. This can lower or even eliminate the risk of fines or legal issues.

2. Cost Effectiveness

Registering and running a subsidiary can cost tens of thousands of dollars each year. This includes registration and documentation fees. With an EOR running the show, you can focus on optimizing your resources at a better cost.

3. A Quick Start

Starting a company can be a tough and slow process. It usually takes a few months to a year to form a subsidiary. However, working with an EOR partner allows you to hire international employees quickly. You can get started in about a month. At Remunance, we have helped clients begin operations in as little as two weeks.

4. Scalability

In uncertain times, businesses might need to scale up and down instantly, and an expert EOR can help you do this in an instant. So, be it compliance or be it scalability EOR is right by your side.

5. Employee Benefits Management

In today’s job market, it is tough to attract and keep top talent. Your competitive perks can help make a difference. An EOR ensures a great employee experience. It provides and manages excellent benefits like health insurance, retirement funds, and leave policies.

Contractor vs. EOR – Which is Right for Your Business?

I know that the information above can be too much for some people. To keep it simple, here is a table. This table compares the key offerings and makes everything clear and easy to understand.

Aspect	Hiring Contractors	Partnering with an EOR
Commitment	Short-term	Long-term
Cost	Lower upfront, limited scope	Higher ROI, broader team management
Compliance Risk	Higher	Minimal
Employee Benefits	Not provided	Comprehensive benefits included
Team Cohesion	Limited	Strong

 

Did reading about EOR make you feel you are missing out on something huge? Worry not, we will take it from here, book a free consultation with our expert today. 

How Does an EOR Streamline Compliance?

One of the hardest parts of hiring international employees from other countries is knowing local labor laws and tax rules. However, an EOR streamlines compliance by:

1. Performs regular and timely audits to uphold compliance standards.
2. Guaranteeing correct payroll processing and tax withholding.
3. Good relations with local administrative bodies.
4. The legal and financial team is well-versed in all the local details. 
5. Writing agreements compliant with local labor rules.

Cost Analysis – EOR vs Subsidiary

Now that we have established the supremacy of EOR, let’s take a few moments to understand the costs associated with establishing a legal entity and relatively how EOR fair:

• Entity Setup Fees: From our research, we found out that subsidiary formation costs $4,000–$20,000, depending on the country you are targeting.
• Annual Maintenance Costs: The costs of accounting, compliance management, and infrastructure can pile up quickly. Our research suggests that subsidiaries, on average, spend up to $100,000 on maintenance.
• Time Investment: Starting from a few months, the time invested can go up to 18 months.

However, interestingly, with an employer of record, businesses are able to cut down on all of these costs. And it’s not just about the cost benefits, with EOR, even the timelines are shortened, and the accelerated entires help in freeing up valuable time and resources for other strategic implementations.

Conclusion

Globally growing your company can take time and effort. However obvious the choice of forming a legal entity may be, once started, it usually turns out to be expensive and time-consuming. To help eliminate these problems, there are modern and practical methods, like working with an Employer of Record (EOR).  which are quick, easy, and reasonably priced substitutes.

With an EOR, you can let the professionals handle the compliance, payroll, and employee benefits management. While you concentrate on your primary company goals. An EOR guarantees you remain quick, compliant, and competitive whether you are scaling your workforce across the globe or employing your first foreign employee.

De-stress and access the best talent on the planet, hire international employees with style. Make a free appointment with Remunance today

Let us create a reality where hiring is unrestricted.