Are you ready to grow your business?
Hiring remote international employees lets you recruit the best person for a role wherever they live. It also changes your legal position. When an employee works in another country, that country’s employment law, tax and social security rules apply, and the employer is responsible for meeting them.
This guide explains how to hire remote employees in another country. It covers the three legal ways to employ someone abroad, a step-by-step hiring process, what to check in each market, and how to pay and manage a distributed team. It is written for founders, finance leads and HR teams, and draws on ThisWorks’ experience supporting employers in the Netherlands, the UK, Germany, Spain, Poland, Portugal, Canada and South Africa.
Hiring abroad at a glance
Sources: EUR-Lex, Regulation (EC) 883/2004, Article 11; EUR-Lex, Directive (EU) 2019/1152, Article 5.
Yes. A company based in any country can hire remote employees abroad. The question is how to do it legally. An employee who lives and works in another country is generally covered by that country’s employment law, and the employer needs a way to run local payroll and pay local tax and social security contributions.
In practice that means one of three things: a local legal entity, an employer of record that employs the person on your behalf, or a contractor arrangement that is genuinely independent. The same applies whether you are a US company working out how to hire remote foreign employees, a UK company hiring in the EU, or a Canadian company hiring remote employees in Europe. In each case the first question is who the legal employer is in the country where the person works.
Employers usually look abroad for a mix of reasons. These are the ones we see most often.
Before you start recruiting, decide how the person will be employed. This choice affects cost, speed and risk more than any other decision in the process.
You register a company in the country, open a bank account, register for payroll and tax, and employ the person directly. This gives you full control and suits employers planning to build a larger team in one country. It can also take months in many markets and brings ongoing accounting, payroll and compliance obligations. For one or two hires, the setup effort is rarely worth it. If an entity is the right long-term plan, ThisWorks can support entity setup too.
An EOR is the legal employer in the country. It issues a compliant local contract, runs payroll, withholds tax and social security, administers statutory benefits and handles local compliance, while you manage the person's day-to-day work.
A contractor runs their own business. They decide how and when to work, can serve other clients, and are responsible for their own tax and insurance. This suits genuine project work and specialist assignments. It stops working when the person is managed like an employee: set hours, your equipment, your direction and a single client.
In that situation, authorities in many countries can reclassify the relationship as employment. The employer may then owe back taxes and social security, penalties and employee entitlements. This remote employee misclassification risk is the main reason employers move from contractors to an EOR or an entity.
Because there is no entity to build, hiring can start in days rather than months. ThisWorks provides EOR services in the Netherlands, the UK, Germany, Spain, Poland, Portugal, Canada and South Africa.
For the difference between the two models, see our PEO vs EOR guide.
The table compares the three routes on the points that matter most to employers.
| Factor | Local entity | Employer of record | Contractor |
|---|---|---|---|
| Legal employer | You, through your own entity | The EOR, in the country | Nobody, the person is self-employed |
| Speed to first hire | Often months, depending on the country | Days once the candidate and role are agreed | Fast to start, but classification must be checked first |
| Upfront cost | Highest: registration, bank account, advisers | Low: no entity to set up | Low |
| Ongoing compliance | Your responsibility, usually with local accountants and lawyers | Handled by the EOR | The contractor's responsibility, but you carry the classification risk |
| Best for | A larger team in one country | One or more hires, or testing a market | Genuine project work and specialists |
| Main risk | Time, cost and admin | Ongoing fee per employee | Misclassification and back payments |
Source: ThisWorks, based on our experience supporting employers in eight markets.
Once you know which route fits, the hiring process itself is similar in every country. This is how to hire remote employees from another country, in order.
“The question we hear most is whether someone can simply be hired as a contractor. Sometimes they can. But if that person works set hours, reports to your manager and does the same job as your employees, most countries will treat them as an employee, whatever the contract says. It’s much easier to choose the right route at the start than to fix a misclassification later.”
— Samantha Petersen, HR Consultant at ThisWorks
These questions help you hire the right remote employee, not only a capable one.
If you are asking how to hire remote workers legally in Europe, the answer is that there is no single European employment contract. Each country sets its own rules on contracts, notice, leave and social security, and many apply tests to decide whether a contractor is really an employee. This is what matters in each of the eight markets where ThisWorks operates.
Dutch employment law gives employees strong protection, with detailed rules on contracts, notice and dismissal. The Dutch tax authority checks whether people engaged as freelancers are in practice employees, under the framework known as the Wet DBA, and has applied full enforcement since 1 January 2025. A contractor who works like a member of staff is therefore a real risk, and the client can be assessed for payroll taxes it should have paid. An EOR employs the person on a compliant Dutch contract and runs payroll.
Source: Rijksoverheid, full enforcement of false self-employment from 1 January 2025; Business.gov.nl, Avoid false self-employment.
If you want to hire employees in the United Kingdom, the main points are employment status (employee, worker or self-employed), PAYE payroll, statutory holiday entitlement and right to work checks. Workers on a five-day week are entitled to at least 5.6 weeks (28 days) of paid leave a year, and employers can count bank holidays towards it. Courts and tribunals make the final decision on employment status, so the label on the contract is not enough on its own, and the wrong label carries tax and employment-rights consequences.
Source: GOV.UK, Holiday entitlement; GOV.UK, Employment status.
Germany regulates employment closely, with strong protection against dismissal and a long-standing concern about false self-employment (Scheinselbstständigkeit). The Deutsche Rentenversicherung runs a status determination procedure that gives a binding ruling on whether a role is employment or self-employment. ThisWorks supports hiring in Germany through its EOR service rather than payroll-only services.
Source: Deutsche Rentenversicherung, Statusfeststellungsverfahren; Kündigungsschutzgesetz, Gesetze im Internet.
In Spain, labour inspectors look for the "falso autónomo", a person treated as self-employed who in practice works as an employee. Terms of employment are also often set by sector-wide collective agreements, so the contract has to reflect the right one.
Source: BOE, Estatuto de los Trabajadores (consolidated text).
Contractor arrangements are common in Poland, but the social security authority (ZUS) can challenge them and claim contributions where the relationship is really employment. Since 8 July 2026 the National Labour Inspectorate (PIP) can also reclassify a civil-law or B2B contract as employment by administrative decision. Polish employment contracts also carry specific rules on contract type, notice and leave.
Source: Legalmondo, Poland: B2B contract reclassification and new powers for labour inspectors; EY Poland, Amendment to the National Labour Inspectorate Act.
Portuguese labour law presumes an employment relationship where certain characteristics of the work are present, which creates risk for long-term contractors. Employers also need to register with the social security system and follow rules on contract form and duration.
Source: Diário da República, Código do Trabalho (article 12, presumption of an employment contract).
Employment law in Canada is set mainly at provincial level, so notice, termination and leave rules differ between provinces. Ontario is a useful example: its Employment Standards Act sets minimum standards for most employees in provincially regulated workplaces, while federally regulated sectors such as banks and airlines fall under federal law. Always check the province where the person will work.
Source: Ontario.ca, Your guide to the Employment Standards Act.
South African labour law is protective of employees, with formal procedures for dismissal. Disputes are commonly heard by the Commission for Conciliation, Mediation and Arbitration (CCMA), and the law presumes employee status where certain factors are present, so a contractor label does not settle the question.
Source: Labour Relations Act 66 of 1995, SAFLII; CCMA, Commission for Conciliation, Mediation and Arbitration.
From choosing the right work permit to payroll and Social Security, we handle the details of hiring the best talent around the world.
Whichever route you use, the same four areas need attention.
Work out which country taxes the employee and which contributions you owe, and whether a tax treaty applies to avoid double taxation. Also check whether an employee working from another country could create a taxable presence for your company there.
A contract for an employee abroad usually has to follow local rules on working hours, probation, notice, termination and intellectual property, and in some countries must be in the local language.
Statutory minimums for paid leave, sick pay and pensions differ by country. In the EU, for example, workers are entitled to at least four weeks of paid annual leave under the Working Time Directive, and many countries go beyond that.
Employee data is personal data. Laws such as the GDPR in Europe and the UK GDPR apply when you process it, so set clear rules on how it is stored, shared and secured.
Source: EUR-Lex, General Data Protection Regulation (EU) 2016/679; ICO, UK GDPR employment guidance.
“Payroll is where hiring abroad becomes very real. Every country has its own deadlines, its own social security contributions and its own payslip requirements, and they change every year. Employers are often surprised that the rules follow where the employee actually works, not where the company is based. Getting the first payroll run right sets the tone for the whole employment relationship.”
— Janneke Vossen, Backoffice & Payroll Manager at ThisWorks
Employees need to be paid in line with local payroll rules. That normally means paying in local currency, withholding tax and social security, and reporting to the local authorities. Paying an employee abroad by invoice or from your home payroll usually does not meet these requirements.
You can run local payroll through your own entity, through an EOR, or through a local payroll provider. ThisWorks offers payroll services in every market it operates in except Germany, where it supports employment through its EOR service. Payroll pricing varies by country and headcount, so we quote on request.
Hiring international remote employees brings a predictable set of challenges. Most can be managed with preparation.
Rely on local expertise, either from an EOR or from a local adviser, rather than applying one country's rules everywhere.
Agree core overlap hours, document decisions in writing and rotate meeting times so the same people are not always working late.
Set out channels, response times and expectations early, and check for understanding in writing.
Decide who provides devices, and set a security policy that applies wherever the person works.
Hold regular one-to-one meetings, offer development opportunities, and meet in person when you can.
Start with one pilot hire in a single country before you scale. Choose the employment route for each country on its merits, document your process so it can be repeated, and keep a named local expert to call when something changes.
Hiring is only the start. People who work remotely benefit from regular communication and clear routes to progress.
Yes. A US company can hire people who live and work in other countries. The worker does not need US work authorisation if they stay outside the US, but the country where they work will have its own employment, tax and social security rules. The usual routes are a local entity, an EOR or, for genuinely independent work, a contractor.
An employer of record is a company that legally employs a person in their country on your behalf. It handles the contract, payroll, tax, statutory benefits and local compliance, while you direct the person’s work. Read our PEO vs EOR guide.
Yes. An employer of record can employ the person in their country so you do not need to set up an entity.
Tell us where you want to hire, the role and your timeline. Our team will recommend the simplest compliant route and handle the contract, payroll and compliance
