How to Hire Overseas Employees: A Step-by-Step Guide

Key takeaways

• Organizations can find the skill sets they need, often at a lower cost, by accessing global talent.
• If a company or NGO needs overseas talent to relocate so they can perform work on site, it will need to know how visa sponsorship works.
• While overseas employees can work from their own countries, an organization may need to set up a legal entity in these countries so it can hire them in compliance with local laws. Or an employer of record (EOR) can hire them on the entity’s behalf, quickly and in full legal compliance.

Hiring overseas employees

From companies experiencing global growth to NGOs with local contracts, organizations will always need overseas employees in a global world. But how do you hire overseas employees? What is work visa sponsorship, and how does it work? How do you pay global employees in compliance with local laws? Read on to learn the basics about hiring overseas employees — whether you need to bring them to your country or have them work from their own.

1. Determine if you need remote or in-country workers

Today, it’s easier than ever before to hire employees overseas thanks to myriad technologies that make remote work possible. If your business or organization is experiencing global growth but doesn’t require on-site work, hiring remote workers who stay in their home country can be advantageous for several reasons: Access to a global talent pool, lower employment costs, and a diverse, international workforce that speaks multiple languages and works from time zones around the globe.

One of the easiest ways to hire employees who work from their own countries — in full compliance with their countries’ laws — is to partner with an employer of record (EOR).

On the other hand, if you need to bring talent from overseas to perform work at your site, work visa sponsorship is usually the only way to do this. Depending on your country’s immigration laws, this process can be long, confusing, and expensive for your organization and the talent you hire. Most nations restrict the number of foreign workers who can enter, especially from particular countries. This means there’s no guarantee that you’ll be able to obtain the work visa necessary for a particular employee.

2. Recruit off-site workers from locations that have the talent you need.

If you don’t need on-site workers, you can hire employees from countries that have the skill sets you need at a cost you can afford. This might mean regions where the labor is less expensive, where a large number of skilled workers in your industry live, or where government regulations make operations particularly cost-effective. A global recruitment partner like Safeguard Global can help you determine which country’s talent pool is best for your unique needs — whether you’re looking to hire for full-time, part-time, or interim work.

3. For in-country workers, determine eligibility and type of work visa sponsorship.

What is work visa sponsorship, and how does it work? The process of sponsoring a work visa varies from country to country, with some requiring the employer to initiate the process and other countries assigning this task to the employee. A country may also impose certain requirements for an employee who seeks sponsorship or for the role that a sponsored employee is meant to fill. The types of documentation required also change from one country to the next. For many visas, you also must certify that the worker is highly skilled, has skills that you can’t find in your home country, or other prerequisites. Workers often have to meet other requirements such as background checks, residency length requirements, and in-country character references.

The type of work visa sponsorship your employee will need depends on what country they’re going to and (usually) what country they’re coming from. The visa process can be complicated and confusing, and because many countries only issue a small number of visas each year, competition for slots can be tough. Sponsoring companies are often required to pay application fees and administrative costs for work visas. Extra work permits are sometimes needed. And in many countries, laws or quotas can change suddenly. In other words, the visa sponsorship process can be burdensome for companies that don’t have long timeframes, expert knowledge, and extra capital.

4. For foreign remote employees, determine how you will legally employ them.

Hiring overseas doesn’t always require work visa sponsorship. By hiring employees who work from their home countries, you can bypass the onerous processes and fees that come with sponsoring a work visa. 

However, hiring overseas workers comes with its own set of challenges because you have to comply with the laws and regulations of the country your employee lives in, which can be drastically different from those of your home country.

Here’s a closer look at the different ways to employ overseas workers and the pros and cons of each:

• Contractors: Contractors can be a good choice if you need part-time or temporary work, but the risk of misclassifying a contractor who should actually be a full employee under a foreign government’s laws is high. 
• Establishing your own entity: Establishing a legal business entity in a foreign country is an option, but this complicated and time-consuming process is usually not cost effective for companies unless they’re looking to hire a large number of employees in a particular country.
• Employer of record (EOR): EORs have become one of the most popular options for employing overseas talent. Under an EOR model, workers are legally employed by a partner company who already has an established entity in that country. The EOR provider not only provides payroll and local HR services, it takes on the legal risk for remaining compliant with local laws.

5. Administer global compensation

If you opt to have employees work overseas instead of bringing them to your home country via a work visa sponsorship, the terms of their employment are governed by the country they live in, not by your company’s home country.

Not following regulations around employment type, tax withholding, and employee benefits can have dire consequences. Businesses that rely solely on money transfer apps like Zelle or Venmo to pay foreign workers may find their accounts suddenly deactivated and their employees unpaid. In some regions, businesses can face steep fines or even lose their ability to do business in that country for simple infractions like categorizing employees as contractors when they should be full employees.

If you’re using an EOR provider, legal compliance — as well as the legal risk — is handled by the EOR. But if you’re using contractors or have your own entity, you may still need support administering global payroll in a way that’s fully compliant with local laws. In this case, a Global Pay provider can help.

Get started today

Want more information on how to hire overseas employees? No matter what kind of foreign worker solution is best for you, Safeguard Global can help with your global growth. Whether you’re using our EOR solution or setting up an entity, need to legally administer payroll in a foreign country, or want a way to pay contractors in their own currency, we can work with you to make sure your employees are compliantly hired and paid in nearly 190 countries. Get in touch today.