.svg){kind=logo}
Hiring full-time employees internationally has never been more accessible, but it’s also never been more risky. As companies expand into new markets, many underestimate the complexity of global employment laws. From misclassification and tax violations to mandatory benefits and termination rules, even one misstep can trigger hefty fines, legal action, or reputational drama. A good example is Deliveroo in Spain, the company misclassified riders as contractors rather than employees, exposing the company to fines, back payments, and regulatory scrutiny.
The good news? Compliance doesn’t have to slow you down. With the right approach and tools, you can hire global full-time talent quickly and compliantly. In this guide, we break down what you need to know and show how Employer of Record (EOR) solutions like RemotePass can help you scale across borders with confidence..
What Does It Mean to Hire a Full-Time Employee Globally?
Hiring a full-time employee in another country means taking on the legal responsibilities of an employer in that specific region, not just paying a salary. A global full-time employee works exclusively for your company, follows set working hours, is directed on when and how to work, and is entitled to statutory benefits, local labor protections, and employer-paid taxes like any local hire.
On the other hand, a contractor may work for multiple clients simultaneously and handle their benefits and taxes. They set their hours and working conditions and decide how to complete the work. Misunderstanding this distinction is one of the most common (and costly) compliance mistakes companies make.
Why More Startups Are Hiring Global Full-Time Talent
More startups and scaleups are building distributed teams, and for good reason. According to Kehinde Awolesi, HR generalist at InEvent, “companies are constantly seeking to build diverse teams to bring in varied perspectives, as this is helpful and resourceful to the output.”
Global hiring allows companies to:
- Access specialized talent unavailable locally
- Stretch budgets with favorable salary-to-skill ratios
- Build local presence in new markets with boots on the ground
- Ensure continuous operations across time zones
- Meet top talent where they are, especially in a remote-first world
The Cost of Getting It Wrong
Many companies jump into global hiring, assuming they can wire money, use generic contracts, or leave tax obligations to the employee. Others treat remote full-timers like contractors, hoping to “sort out compliance later.”
This mindset is risky.
Improper classification, non-compliant contracts, and tax evasion—even if unintentional—can lead to lawsuits, back payments, penalties, and reputational damage in foreign markets. In short, doing it wrong can be far more expensive than doing it right from day one.
The Compliance Risks Startups Overlook
Hiring full-time employees internationally without a clear understanding of local laws can expose your business to severe and often avoidable risks. Here are the most common compliance pitfalls that trip up even the most well-meaning teams:
- Misclassification: Misclassifying employees as independent contractors is one of the most expensive legal mistakes a startup can make. This error can lead to back taxes, fines, employee claims, and reputational damage. In many countries, enforcement has tightened, and in some cases, repeat offenders can face criminal penalties. In the U.S., U.K., Spain, and Canada, government agencies are actively auditing remote hiring models and pursuing non-compliant companies.
- Lack of Compliant Employment Contracts: A standard contract won’t cut it internationally. Local labor laws often require:
- Country-specific clauses (e.g., termination protections, language requirements)
- Prohibited terms (e.g., certain non-competes or blanket IP claims)
- Mandatory references to statutory rights
If your contract doesn’t meet local standards, it may be unenforceable, leaving your company vulnerable to lawsuits or labor board actions.
- Payroll Tax Liabilities: Global employers are responsible for withholding and remitting the correct payroll taxes in each jurisdiction. This includes income tax, social security, unemployment insurance, and more. Failing to do so can:
- Create long-term tax liabilities
- Trigger interest and late penalties
- Lead to audits in multiple countries
- Mandatory Benefits Violations: Every country has legally required benefits—paid vacation, sick leave, parental leave, health coverage, and more. If you skip or shortchange these:
- You may owe backdated benefits with penalties
- Employees may file claims with local authorities
- You risk employee dissatisfaction or attrition
- IP & Confidentiality Risks: For tech-enabled startups, IP is everything. But if employment contracts don’t comply with local laws, your ownership of inventions, code, and confidential materials may not be legally secure. Countries like Germany and France, for example, have strict rules around how and when IP is assigned.
- Wrongful Termination Exposure: You can’t "at-will" fire employees in most countries. Jurisdictions often require:
- Minimum notice periods (30–90 days are common)
- Just cause for termination
- Severance pay in certain cases
Ignoring these protections can result in costly lawsuits, rehire rulings, or public HR disputes—especially damaging for a company building its brand in new markets.
Core Areas of Compliance When Hiring Globally
While it may seem herculean, hiring globally can also be a walk in the park. Here are some essential core areas of compliance for startups and companies:
- Employment Contracts: A compliant employment contract is the foundation of any legal employment relationship. In many countries, contracts must
- Be written in the local language (or dual-language format)
- Include country-specific clauses such as probation periods, mandatory benefits, working hours, and notice periods.
- Avoid prohibited provisions (e.g., overly broad non-competes or unenforceable penalties)
Without a locally valid contract, your company may be exposed to legal challenges or may lose enforceability on critical clauses like confidentiality and IP assignment.
- Payroll and Taxation: With global hiring, adhering to payroll compliance can be a significant challenge. This includes:
- Registering as an employer or using an Employer of Record (EOR)
- Withholding and remitting income taxes, pension, health, and social security contributions
- Issuing local payslips and maintaining compliant payroll records
As Kehinde Awolesi, HR Generalist at InEvent, notes: “It’s critical to understand the tax landscape in any country you plan to hire from. Even small missteps can snowball.”
- Benefits & Leave: Every country has its statutory requirements, which may include:
- Paid vacation and sick leave
- Parental leave (maternity, paternity, adoption)
- 13th-month pay or holiday bonuses
- Healthcare, pension, and transportation allowances
These benefits are non-negotiable, and failing to provide them can lead to employee claims or fines. Global HR teams must ensure these obligations are embedded in employment contracts and reflected in payroll systems.
- Termination & Severance: Unlike “at-will” employment, most countries regulate termination closely. Requirements may include:
- Minimum notice periods (30–90 days)
- Just cause documentation
- Performance improvement plans
- Severance calculations based on tenure, salary, and local laws
Failing to follow due process can result in legal disputes, rehire orders, or expensive severance claims, especially in employee-friendly jurisdictions like France, Brazil, or Germany.
- Data Protection & IP: When hiring abroad, your contracts and HR processes must also account for:
- Data protection laws like GDPR (Europe), PDPB (India), and others
- Cross-border data transfers (especially if your HR or payroll systems are centralized)
- IP assignment and confidentiality clauses that comply with local employment law
If these areas are neglected, you may find that your IP ownership isn’t enforceable or worse, you’ve inadvertently breached data privacy regulations.
Entity vs. Employer of Record: How to Hire Compliantly
When expanding globally, companies have two primary options for compliant hiring: establishing a local entity or using an Employer of Record (EOR). Each has its place. Here’s how to decide what’s right for your team.
Establishing a Local Entity
Setting up a local legal entity (such as a subsidiary or branch office) gives you full control over your operations in a specific country. This approach is best suited for companies that:
- Plan to hire 15+ employees in the same country
- Require a permanent physical presence for regulatory or strategic reasons
- Are ready to invest time and capital in local incorporation, banking, legal counsel, and compliance infrastructure
Pros:
- Full control over HR, payroll, and legal decisions
- Supports large-scale hiring or regional expansion
- Builds long-term presence and local credibility
Cons:
- Slow and expensive to set up (can take months)
- Ongoing overhead: legal, tax, and admin complexity
- Risk of non-compliance if local laws aren’t deeply understood
Employer of Record (EOR)
An EOR acts as the legal employer on your behalf in the employee’s country. You retain day-to-day control over the employee's work, the EOR handles contracts, payroll, tax compliance, statutory benefits, and termination.
This model is ideal for:
- Hiring one or a few employees in a new market
- Testing new markets before committing
- Scaling quickly without dealing with local incorporation
Pros:
- Hire in 150+ countries without an entity
- Fast onboarding—often in days
- Full legal compliance with local labor laws
- Lower upfront costs and admin burden
- Great for startups and remote-first teams
Cons:
- Less control over employment infrastructure (handled via EOR)
- May not be ideal for highly regulated industries requiring direct oversight
Checklist: What to Have in Place Before Hiring a Global FTE
It is exciting to make your first international hire, but there are some prerequisites to ensure you have. Here are the most important things:
- Statutory employment contract that complies with local requirements
- Registered employer status or EOR partnership
- Payroll registration with tax authorities
- Benefits packages meeting or exceeding statutory minimums
- IP protection clauses that are locally enforceable
- Legal termination framework paying attention to notice and severance obligations
- Data protection protocols compliant with local regulations
- Working time policies that accommodate local requirements
- Regular compliance review process for changing regulations
Alternatively, you can let RemotePass handle all of this. We act as your legal employer in 150+ countries—handling contracts, payroll, taxes, benefits, compliance, and more, so you can focus on scaling your team globally without the red tape.
How RemotePass Ensures Global Hiring Compliance
As a trusted and viable employer of record solutions, RemotePass provides end-to-end compliance solutions for international employment. We handle every critical aspect of global full-time employment so you can hire fast, scale confidently, and stay legally protected.
Here’s how:
1. Country-Specific Onboarding Workflows
We don’t believe in one-size-fits-all onboarding. Every country has its legal nuances, and our workflows are built to match. RemotePass captures:
- Mandatory employment documentation
- Local ID and work eligibility verification
- Tax registration details
- Banking info for compliant payments
- Country-specific employee acknowledgments
No manual back-and-forth. Just compliant, guided onboarding from day one.
2. Locally Compliant Employment Contracts
Forget generic templates. Our contracts are:
- Vetted by in-country legal experts
- Available in the required local languages
- Updated regularly to reflect legal changes
- Customizable within compliant boundaries
- Digitally signed in legally recognized formats
Whether you're hiring in France, the UAE, or Mexico, you're always covered.
3. End-to-End Payroll & Tax Remittance
We manage every aspect of compliant global payroll, including:
- Salary calculations and deductions
- Income tax and social contribution withholding
- Payments to employees and local authorities
- FX conversion at competitive rates
- Year-end tax documentation and reporting
No missed deadlines. No tax liabilities. No headaches.
4. Statutory & Competitive Benefits
Every hire gets access to:
- Country-mandated benefits (health, leave, etc.)
- Competitive health insurance and retirement plans
- Paid time off tracking
- Expense reimbursement management
You stay compliant and offer benefits that help you attract top talent, anywhere.
5. Compliant Termination & Offboarding
We handle offboarding with the same rigor as onboarding. That includes:
- Enforcing notice periods
- Calculating severance according to local formulas
- Ensuring final pay includes all owed components
- Legally compliant documentation
- Exit interviews and return-of-assets tracking
Leave nothing to chance when employment ends, especially in highly regulated markets.
6. Real-Time Compliance Monitoring
Labor laws change constantly. RemotePass keeps you ahead with:
- Automatic policy and contract updates
- Alerts about new regulatory requirements
- In-platform documentation for audits
- Expert guidance on implementing changes
We help prevent compliance drift, so you never get caught off guard.
7. Dedicated Customer Support That Knows Global Hiring
Our multilingual support team understands the complexity of international hiring. Whether it’s resolving onboarding questions, guiding you through a regulatory change, or assisting with a payroll inquiry, you’ll have access to:
- Fast, responsive in-app support
- Regional experts familiar with local regulations
- Ongoing customer success guidance tailored to your needs
You're never alone. We partner with your team every step of the way.
Stay Compliant While Hiring with RemotePass
Non-compliance when hiring globally may feel faster in the short term, but it almost always leads to fines, delays, and talent loss. You can’t afford to “figure it out later.”
We know this at RemotePass, and this is why we offer:
- Full compliance in 150+ countries
- Transparent costs and fast onboarding
- Zero admin headaches
Whether you're hiring your first employee in Brazil or scaling across the GCC, RemotePass makes global hiring seamless.
Ready to go global safely and simply? Book a demo today.
.svg)
.svg)
