Hiring employees in across borders

Are you thinking of expanding your business abroad and hiring employees in across borders? Let’s have a look at the options

More and more companies are hiring employees abroad. While global corporations have been doing this for decades, the landscape has changed. Since the pandemic, remote work has become normal, breaking down traditional country borders. Employees are no longer tied to a single location, and businesses are realizing they don’t need to limit themselves to local talent either, let alone local salaries!

Trends Driving International Hiring

There are three main trends driving companies to recruit outside of their home countries:

1. Remote work and distributed teams: The shift to remote and hybrid working has accelerated since the COVID-19 pandemic and is driving more organizations to build globally distributed teams.
2. Global talent shortages: Many industries face talent shortages in key areas such as technology and engineering. To fill these gaps, companies are increasingly looking to hire internationally, tapping into markets with a surplus of skilled workers (normally at less cost).
3. Compliance and employer of record (EOR) solutions: Companies are leveraging EOR services to manage compliance when hiring internationally. This trend simplifies the hiring process across borders and helps mitigate risks.

The rapidly evolving digital landscape has definitely accelerated this shift, making global hiring more accessible, not just for multinational companies but also for SMEs and growing businesses. Whether you’re looking to expand internationally, improve customer support across time zones, access specialized talent, or reduce employment costs, hiring beyond your country’s borders has never been easier.

But how do you legally and efficiently hire in another country? Should you set up a local entity, work with freelancers, use a payroll company, or consider an Employer of Record (EOR)?

In this blog we will explore the different hiring options, to see what options there are and what is the best solution for your business.

How Can You Hire in Another Country?

When hiring employees abroad, you typically have four options:

1. Create a Local Entity
2. Hire a Freelancer
3. Use a Payroll Company
4. Partner with an Employer of Record (EOR)

Each option comes with different costs, risks, and levels of involvement. Below, we compare them:

Comparison Table: Ways to Hire Internationally:

Hiring Method	Pros	Cons	Investment (Time & Money)
Create a Local Entity	Full control, Long-term stability	High setup costs, Complex compliance, Time-consuming	High – Requires legal, tax, and operational setup
Hire a Freelancer	Fast, No employer obligations	No exclusivity, Less control, Risk of misclassification	Low – Simple contracts but potential legal risks
Use a Payroll Company	Handles payroll & taxes	Still requires a legal entity, Limited HR support	Medium – Easier payroll but no full compliance coverage
Partner with an EOR (Employer of Record)	No local entity needed, Compliance covered, HR & legal support	Slightly higher per-employee cost than payroll-only services	Low – Quick setup, No upfront entity investment

Which Option is Best for You?

Here’s when each option makes sense:

Setting up a local entity – If you’re making a long-term investment and plan to hire a large local team (e.g., 10+ employees) in one country.

Hiring a freelancer – If you need short-term project-based work, but keep in mind that misclassification risks (treating a freelancer like an employee) can lead to penalties.

Using a payroll company – If you already have a legal entity in the country but need help processing payroll and taxes.

Choosing an EOR firm– If you want to hire quickly, legally, and without setting up a local entity. You manage your new employee and your EOR partner handles the rest. Extend your team without the hassle.

The option you choose is, off course, related to your business strategy, your budget, timeframe and the country you want to hire your new employee in.

If you want to have your employees work physically together as a team, or if you are worried of having employees work totally remote in a different country than your own, there are options like Bridgeshore EOR+. Besides the common EOR service like handling contracts, payrolling, compliance & legal and social securities and taxes, they help you recruit the best candidate and your employees can work from their fully equipped office, ensuring a stable and supported work environment where they can thrive while working for you. They are based in Portugal, where they chose for a niche and boutique style EOR firm close to Lisbon. The reasons why Portugal is a great country to consider for extending your team will be discussed in another blog.