Thought leadership from the most innovative tech companies, all in one place.

How to Pay and Hire International Contractors Legally


Do you want to save money and expand your talent pool globally? Hiring and paying international contractors legally is one of the best ways. However, it's also a daunting chore. You have the responsibility to:

  • Find qualified candidates
  • Comply with labor and employment laws in different countries
  • Negotiate payment terms

This comprehensive guide walks you through the various ways to pay and hire international contractors easily and lawfully. Read on to learn more.

Ways to Hire International Contractors

Your business can recruit and hire international contractors in three main ways. Each option comes with its pros and cons. That means your unique needs and circumstances will determine the perfect technique for your business.

A deep understanding of how long the project will last and the role you intend to hire will help you determine the best method to employ international contractors. The three main ways include:

Work with a Reliable Global PEO

Are you hoping to hire right away? Or test new markets? Global PEO service providers may be the perfect option. A global PEO is, in most cases, seen as a solid foundation for international expansion.

Your business will maintain complete control over the day-to-day operations of its employees. The PEO service provider will manage the HR, compliance, and payroll using its own network of legal entities.

When you use global PEO services, you can hire international contractors right away in accordance with local law and labor regulations since everything has been established. Your business will have less administrative control. However, it still has complete control over everyday tasks and oversight of its employees.

Hire International Contractors Directly

Your business can also decide to hire international contractors on its own. If you want to avoid outsourcing altogether, hiring contractors directly can be the perfect option.

To hire international contractors directly without breaking the labor and employment laws, you need to deeply understand all the regulations before you can start the process. These laws include those associated with:

  • Human Resources
  • Payroll
  • Working hours
  • Holidays
  • Employment contractors and more

All these regulations vary from one state or operation to another

Establish a Legal Entity

Another legal way to hire international contractors is to establish a legal entity in the country of operation. A legal entity can help your business avoid potential miscommunications between tax agencies and governments. All local tax laws, payroll, hiring, and more can be managed through your entity.

This provides the lowest risk to a business. However, it requires more time to establish a legal entity. The whole process can take anywhere between three and twelve months. Also, you need enough funds to establish your own entity.

How You Can Pay International Contractors after Hiring Them

Some common ways to pay international contractors exist. They include:

  • Bank transfers
  • Paper checks
  • Wire transfers or international money orders
  • PayPal
  • Transferwise

It is true that expanding internationally can be exciting. Risks and challenges are always part of a global expansion process. However, global PEO services can help mitigate them, and at the same time, you'll still have full control over your business's everyday operations. Are you looking to hire and pay international contractors legally? Consider working with a reliable global PEO service provider.

Continue Learning