Best Practices for International Hiring




Reviewed by


March 28, 2022

This article is Tax Professional approved


When hiring great talent, physical distance shouldn’t hold your business back. International hiring is a new strategy that’s worthwhile, cost-effective, and, dare we say—fun.

Here are our top tips on international hiring and finding your next overseas worker.

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This article is written by our friends at Deel.

What’s international hiring?

International hiring means looking out of the country for workers. An international worker works remotely, usually from home. Since the pandemic, jobs of all kinds have adapted virtually, and workers from most departments—from sales to support to marketing—can work remotely.

Misconception: Only big companies can hire internationally

International hiring can bring financial and cultural benefits to companies of all sizes. In the past, only big corporations could manage the cost and legal complexities of international hiring. But now, technology, automation, and co-employment services open the door to remote hiring for any company.

Use a hiring partner to access the global talent pool

Using an international hiring solution lets you outsource the legal and financial work that comes with hiring from different countries.

Not too long ago, if you wanted to hire a remote worker, you’d need to set up a local branch in the foreign country. For example, if you were a friendly bookkeeping company called Bench looking to hire an analyst in the UK, you’d need to set up Bench UK, then employ the analyst through the UK subsidiary. You’d have to figure out the employment regulations, payroll taxes, pension plans, and all the other legal requirements for hiring a UK worker. That’s a lot of effort for HR, legal, and payroll departments, and you’d need to go through the entire process again each time you hire in a new country.

The smarter solution to this problem is to partner with a hiring solution called an employer of record (EOR). EORs establish entities in hundreds of countries worldwide and hire international workers on your behalf. They have playbooks for every country and handle compliance and payroll, making global expansion quick and easy for you.

It’s a bit like writing a song. If you’re acclaimed singer-songwriter-playwright Lin-Manuel Miranda, for example, you might have a catchy tune in mind, but not necessarily the skills to play all the instruments. You’d need to sit down and put in the effort to master each one. Some instruments might have similarities, while others might introduce entirely different techniques—a fulfilling challenge, but maybe not the best use of your time. Don’t you have a song to write?

Instead, you could reach out to your musician friend Dale, who knows musicians who can play their instruments to perfection. You can outsource the playing to the musicians—they can instantly play whatever music you give them without missing a note, leaving you with more time to focus on writing your next award-winning song.

Misconception: I need to complete a lot of visa paperwork to hire internationally

If you hire internationally, don’t you need to get foreign worker permits from the government? Nope, not for remote workers—the US government doesn’t require a work permit or visa as long as your worker never physically enters the US.

Figure out if you’re hiring an employee or a contractor

Some international hiring services, like Deel, allow you to hire employees as well as independent contractors. The distinction is important because each type of worker has unique legal requirements.

If you hire an overseas employee, you’ll have to provide their country’s mandatory benefits, which typically brings the overall cost of the employee to around 1.2 to 1.4 times their base salary. An EOR will help you offer benefits, health plans, and stock options that comply with local requirements. Your EOR takes over the responsibility for all employee benefits and rights to simplify international hiring.

Contractors, on the other hand, are entirely responsible for their taxes and don’t qualify for benefits. Contractors are much easier to hire and usually work on specific projects or tasks. You might already hire contractors for short-term projects through freelance marketplaces or ad-hoc agreements. Some hiring solutions generate contractor agreements and manage invoicing to help you organize and manage contractor relationships in an efficient, compliant way—no more messy invoices.

Starting small is wise, but don’t limit yourself

Hiring in nearby countries can be a good idea to test out remote work or make key hires (like a co-founder) because of timezone alignment. Having remote workers with similar working hours makes communicating and planning work easier.

For example, businesses in North America might look to South America, while companies in Europe might look to the Middle East or Asia. But don’t let time zones constrain you—asynchronous work is easier and more productive than most people think, thanks to new communication and productivity tools.

Always use custom contracts

Whether you hire one person or several or hire on your own or through a partner, one key piece of advice remains the same: always use custom contracts. Each country’s laws and terminology are unique, and each of your employment contracts must comply.

Free, premade hiring contracts you can find on the internet may be outdated or noncompliant, leaving you vulnerable to legal and financial penalties. Create a custom contract for each hire and make sure to have it reviewed by a legal professional.

Know what to ask

Coming prepared with exploratory questions will give you a better sense of what an international hiring provider can do for you and whether it’s the right fit for you. Here are a few to get you started:

Currency and exchange rates: Do they let you pay in your local currency and minimize currency exchange fees for your workers?

Tax laws and employment regulations: Can they generate compliant employment agreements for you and help you collect any required documentation and licenses?

Payroll: Can they take care of payslips and tax slips? Do they offer flexible withdrawal options?

About Deel

Deel is the global payroll platform for managing an international workforce. Companies use Deel for borderless recruitment from the global talent pool, enabling the future of work. Bench clients can claim a special discount when you hire employees or contractors through Deel.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
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