What nobody tells you about hiring internationally

In partnership with

👋 Welcome back to All Things Remote: weekly tips for building a better remote team.

At some point, almost every remote team hires across borders, but many founders will figure this out as they go, which is usually the expensive way to do it.

🤔 This week's riddle:
What fills up a room but never takes up any space? (scroll for answer)

In today's send:
✅ The most common mistakes founders make when hiring internationally
✅ Contractor vs employee & what you actually need to know
✅ How to get it right without it becoming a full-time job

But first…

Top reads this week

• The daily habits founders are loving.

• Is remote work making it harder to hire young talent?

• The unexpected downside of remote work nobody talks about

• What actually matters for founders in an AI-first world

Most founders I've worked with don't sit down one day and decide to build a global team, it often happens gradually.

You find a great developer in Eastern Europe. A brilliant marketer in Southeast Asia. A customer support person who happens to be based in South America and is perfect for the role. Before long, you're paying people in four different countries, and you've never stopped to think about whether you're doing it correctly.

That’s where the problems start, not because anyone meant to cut corners, but because international hiring has a lot of moving parts that aren't obvious until something goes wrong.

The contractor trap

The most common mistake I see is misclassifying employees as contractors. It feels like the simpler option with no payroll complexity or employer contributions required (at least that’s what you think).

You draw up a contract, agree on a rate, and get started…

The problem is that most countries have their own definition of what makes someone an employee, and it has nothing to do with what your contract says. If someone is working full-time hours, using your tools, following your processes and reporting to your managers, many countries will treat them as an employee regardless of how you've classified them.

The penalties for getting this wrong can be significant: back taxes, fines, and in some cases, legal action that's difficult and expensive to resolve.

I've seen founders genuinely blindsided by this. They thought they were being practical. In reality, they were sitting on a compliance risk they didn't know existed.

What hiring an employee internationally actually involves

If you want to hire someone as a full employee in another country, you generally have two options. You either set up a legal entity in that country, which takes time, costs money, and brings ongoing admin, or you use an Employer of Record (EOR), which essentially acts as the legal employer on your behalf while your new hire works for you day to day.

For most early-stage remote teams, an EOR is the more practical option. It lets you hire compliantly in a new country without the overhead of setting up an entity, and it means someone else is handling local payroll, benefits, and compliance on your behalf.

The payroll and FX side that catches people out