Ever since the pandemic hit in 2020, businesses have experienced firsthand how remote work can benefit both them and their employees. What started as a temporary solution has now evolved into a permanent shift in how people work. The flexibility it offers, combined with access to a wider talent pool, has made remote work a great option for businesses across the globe. 

In fact, according to Standout CV, 58% of businesses in the UK are offering remote or hybrid work to their employees. This statistic highlights a clear shift in the UK job market, where flexibility has become one of the most attractive offerings for both employers and job seekers.

However, while hiring locally for remote roles is straightforward, hiring someone in another country comes with its own set of challenges. It’s not as simple as just hiring an employee and letting them work from home—there are important legal and practical considerations to keep in mind.

Different employment laws, taxes, and payroll requirements can make the process more complex. You need to ensure that you’ve taken the right legal steps, provided benefits in line with local regulations, and set up cross-border payments. It’s not as simple as hiring someone and letting them work from home—there are important legal and practical considerations to keep in mind.

That being said, hiring a remote employee in another country can open doors to a whole new world of talented professionals ready to support the growth and development of your business. If you’re considering expanding your team with offshore employees, here are four ways you can do it:

Establishing a Local Entity in the Country

One way for a foreign company to hire employees in another country is by setting up a branch or subsidiary in that country. This allows the business to hire staff directly under local laws and manage all aspects of employment, from contracts and payroll to taxes and benefits. Although this method can be more complex and costly than other approaches, it offers a high level of control and ensures that the company fully complies with local regulations.

The process involves registering the business with the local authorities, opening a bank account, and adhering to the country’s tax and employment laws. Setting up an entity can be time-consuming, requiring legal advice and an understanding of the local market, but it can be worthwhile if the business plans to have a long-term presence or hire multiple employees in that country.

An advantage of this approach is the ability to create a stable and legal framework for growing your business internationally. It also strengthens your company’s brand in the new market, showing commitment to the region. However, it’s important to consider the cost and administrative burden of maintaining an entity.

For companies looking to hire just a few employees or with short-term plans, this method may not be the most practical due to the expense and complexity. 

Hire Independent Contractors

For specific projects or highly skilled roles, hiring independent contractors can be the simplest solution when hiring abroad. Contractors are often responsible for their own taxes and benefits, which frees you from many compliance requirements typically required when hiring direct employees. To make sure expectations are clear, always draft detailed contracts that outline deliverables, deadlines, and payment terms.

With independent contractors, there’s reduced administrative burden. Since contractors generally manage their own taxes and benefits, you don’t have to handle these aspects, giving you an easier way to bring in talent without long-term obligations.

In addition to that, independent contractors can give you flexibility for project-based work or tasks that may only require short-term commitments. This is especially helpful if you’re not looking to lock into a full-time hire.

Employer of Record

An Employer of Record (EOR) service is a popular option that allows businesses to hire employees abroad without creating a local entity. An EOR acts as the legal employer in the worker’s country, handling payroll, taxes, compliance, and benefits. You maintain control over the employee’s tasks, but the EOR takes care of the administrative side. 

Companies use this approach to avoid all the stress that comes with hiring international workers because all the legal paperwork falls on their legal employer: the EOR company. Your organisation doesn’t have to be bothered with things such as health insurance, retirement plans, or even paid leave, so you don’t have to worry about it.

The remote employee still works for your business following your instructions and contributing to your projects just like any local team member but all administrative burdens fall on the EOR.  

Offshore Staffing Agencies

Offshore staffing agencies, like Arwana, help businesses hire skilled workers from other countries. These agencies find qualified candidates and manage the entire recruitment process. Once hired, employees work remotely but remain on the agency’s payroll. This means the agency handles all the legal and administrative tasks related to employment.

Offshoring has been a popular way to outsource work for many years, especially as companies look to cut costs while still maintaining quality standards.

A benefit of partnering with an offshore staffing agency is the time saved during the recruitment process. Instead of spending weeks reviewing resumes and interviewing candidates, companies can rely on the agency’s expertise to quickly find the right people for the job. 

Beyond the initial recruitment phase, most offshore staffing agencies take an active role in ongoing employee management. They handle payroll, benefits, performance tracking, and compliance matters, ensuring that remote employees are well looked after and motivated. This ongoing support helps contribute to making offshore employees feel like they’re part of the team even from afar.

Choosing the Best Option for Your Business

Each of these options has its own pros and cons, and the best choice depends on your business goals, the number of employees you plan to hire, and your budget. If you’re looking for flexibility and quick setup, an EOR or offshore staffing agency could be the way to go. For more permanent or large-scale hiring, setting up an entity may be more suitable.

There may be many options out there, but we’re confident we’re the best fit for your needs. If you’re looking for an offshore staffing agency to connect your business with exceptional global talent and support your growth goals, look no further than Arwana. Book a discovery call with us or send an email to hello@arwana.co.uk to get started.