Remote work is no longer a temporary trend. According to global workforce data, around 28% of employees worldwide were working remotely at least part of the time in 2024, a share that has remained stable since the post-pandemic peak – showing that flexible work has become a permanent part of modern employment rather than a short-term experiment.
But here’s the part many companies underestimate. International growth brings an entirely new set of challenges: compliance, payroll, taxes, and local labor laws. Misclassifying an employee as a contractor may seem like a shortcut – until regulatory risk and financial penalties enter the picture.
Let’s explore how tech teams can scale across borders without legal messes, delayed payrolls, or sleepless nights worrying about compliance gaps.
Table of Contents
Table of Contents
Why International Hiring Became the New Standard for Tech Teams
For the last decade, the narrative around hiring has shifted from “hire the best in your city” to “hire the best anywhere.” This change wasn’t just about COVID-19 normalizing remote work – it was about competition, cost, and access. Workplace research shows that over 70% of employees globally now prefer hybrid or flexible work models, even when that flexibility comes with trade-offs.
Cross-border hiring opens doors, but those doors come with locks – and most of them require legal keys you don’t have. It’s not as simple as sending someone a contract over email and wiring them money. Labor laws differ wildly country by country. What’s standard in Germany might be illegal in India.
Companies that don’t understand this quickly find themselves in risky territory. That’s the exact point when many smart startups realize they need an employer of records.
The Realities of Global Employment: It’s Not Just About Paying People
What gets overlooked in international hiring is just how many rules are stacked behind each salary. For instance, if you want to hire Odoo consultant in Switzerland, you will be required to:
- Register your business as a Swiss employer or operate through a local employing entity.
- Comply with Swiss employment regulations covering notice periods, working hours, paid leave, and contract terms.
- Contribute to mandatory social security programs including pension (AVS), unemployment insurance, accident insurance, and family allowances.
- Run payroll in line with cantonal tax and reporting rules, including social contributions and, when applicable, withholding tax.
- Provide statutory employer insurance coverage, such as occupational accident insurance.
- Adapt to canton specific requirements, since employment and tax rules vary across regions.
This isn’t optional – it’s the law. And if you get it wrong, you’re exposed. Back taxes, fines, and even lawsuits can hit your business, all while your new hire feels like they’re stuck in legal limbo.
Some companies try to skirt this by calling full-time workers “freelancers” and hoping no one notices. Spoiler: governments notice. And more importantly, your team notices. It’s hard to build trust with remote employees if their employment status is legally shaky.
Of course the problem may be solved through IT nearshoring companies, but in case you’ve already found the perfect candidate to hire and are ready to fully cover HR overhead, you may not need services of such agencies in full.
What EOR Platforms Actually Do – and Why It Matters
An Employer of Record (EOR) serves as a legal intermediary. You choose who you want to hire, define their role and compensation, and the EOR becomes their official employer in the eyes of the local government.
This setup allows you to:
- Hire employees in countries where you have no legal entity
- Stay compliant with tax and labor laws
- Manage global payroll in local currency, including deductions and contributions
- Offer locally required benefits without building it all yourself
- Focus on growing your tech team instead of becoming an expert in global employment law
The EOR handles contracts, pays your employees, files taxes, and ensures the local law is followed – all while you maintain control over their day-to-day work.
And here’s the key difference: contractors can’t be treated like employees. Employees – through an EOR – can. That’s better for retention, loyalty, and company culture.
The Hidden Costs of Non-Compliance
Skipping the EOR route and taking shortcuts can be expensive. You might hire a “freelancer” full-time in Brazil, provide a company laptop, and include them in team meetings. Six months later, they leave and file a claim with the local labor ministry.
If they worked full-time under your direction, they’re effectively an employee. You could be on the hook for unpaid taxes, benefits, penalties, and severance. Governments are actively cracking down on misclassification, and audits can now cross borders.
These risks can also impact fundraising or acquisition. Investors don’t like surprises, especially legal ones with a price tag.
When and How to Use an EOR to Scale Smartly
If you’re hiring one or two people in a new market, an EOR is often the smartest move. It lets you move fast while staying compliant. Onboarding can happen in days, and your new hire receives local benefits and a legal safety net.
EORs are also ideal for market testing. Thinking about Southeast Asia? Hire a customer success manager in the Philippines through an EOR. If it works, scale up. If not, offboard compliantly.
Be strategic. Hiring dozens of employees in one country over time? Eventually, setting up a local entity may make more sense financially. EORs come with monthly per-employee fees – great for early moves, but long-term it might not be the leanest path.
Choosing the Right EOR Partner
Choosing an EOR is high-stakes. You’re entrusting a third party with the legal responsibility of employing your people.
Look beyond the sales deck:
- Local infrastructure: do they operate through their own entities or partners?
- Legal contract strength: are agreements reviewed by employment lawyers?
- Termination procedures: can they handle complex offboarding?
- Employee experience: support in local language, fast payroll issue resolution
And yes, some comparisons are useful. The Deel vs Multiplier conversation often comes up. Deel leads in coverage and integrations, while Multiplier shines with strong local insights in emerging markets. The right fit depends on your hiring roadmap and complexity – not which platform raised more funding.
Scaling Global Tech Teams Safely with EOR Platforms
Expanding a tech team internationally requires more than hiring talent, it demands a reliable framework for compliance, payroll, and employment obligations. EOR platforms allow companies to scale global tech teams without setting up legal entities in every country, providing consistent contracts, benefits, and payroll management. This ensures teams grow efficiently while staying compliant with local labor laws.
Using an EOR early helps companies avoid operational risk. Proper classification, onboarding, and offboarding processes reduce legal exposure, while structured systems allow leaders to focus on building products instead of managing international employment logistics.
Final Thoughts: Make Global Hiring a Strategic Advantage
International hiring is essential for tech companies competing globally, but scaling without structure creates risk. EOR platforms give teams the tools to hire internationally with confidence, maintain compliance, and manage operations efficiently.
For founders and tech leaders, the decision is not whether to hire globally – it’s how to scale global tech teams effectively and safely. Companies that treat EOR platforms as a strategic part of their growth plan can expand faster, reduce risk, and turn global hiring into a competitive advantage.
