Last updated: 15 September 2026
How do I employ someone internationally?
To employ someone in another country, you need five legal steps: pick the legal employer, register for tax and social security there, check permanent establishment risk, confirm their right to work, and give them a local contract. The number most employers meet first is 183 days: once a person spends more than 183 days in a country in any 12 months, that country can usually tax their pay.
Recruiting abroad works much like recruiting at home. Write down the skills the role needs, find candidates, and screen them with checks that are legal in their country, as set out in our guide to screening international employees. Once you have chosen someone, the legal work starts. This guide covers that legal side for one person in one country.
Step 1: decide who will legally employ them
The legal employer is the company named on the contract. It runs payroll, pays tax where the person works, and carries the duties that local law places on an employer. The choice shapes every step that follows, so it comes first.
There are three common routes. You can set up your own local entity, which takes time and brings ongoing admin. You can use an Employer of Record (EOR), a company with a presence there that employs the person for you while you manage their work. Or you can sign a contractor agreement, which only fits if the person is truly independent. We compare the routes in how to hire internationally without opening entities and EOR vs contractor of record.
Step 2: register for tax and social security where they work
Pay is usually taxed in the country where the work is done. That is the rule in Article 15 of the OECD Model Tax Convention, which most tax treaties follow. So the country your new employee works in can tax their salary, and the employer usually has to register with the local tax office and run payroll there.
There is a narrow exception for short stays, but all three of its tests must be met. The person is in the work country for no more than 183 days in any 12-month period. The employer paying them is not resident there. And the pay is not borne by a permanent establishment the employer has there. Someone who lives and works abroad full time fails the first test. The actual treaty between the two countries can differ from the model, so check it.
Social security follows its own rules. Inside the EU, a worker pays into one system only, usually the one where they work. Per Your Europe, a posted worker can stay in their home system with a PD A1 form, issued for a maximum of 24 months. If you are sending an existing employee rather than hiring someone new, read can an employee move abroad and keep their job.
UK companies have their own options, which we explain in how a UK company pays an overseas employee. If you are not sure you need payroll in the new country yet, read when you need international payroll.
Step 3: check for permanent establishment risk
A permanent establishment (PE) is a taxable presence. If your company has one in another country, that country can tax part of your profits. Per Article 5 of the OECD Model Tax Convention, a PE is a fixed place of business through which your business is wholly or partly carried on.
One employee can create a PE in two main ways. The first is a fixed place of business, such as an office, or a home office that works like one. The second is a dependent agent: a person who habitually signs contracts for you, or who plays the main role in winning contracts that you then sign without real changes.
An EOR lowers PE risk because the EOR, not you, is the employer. It does not remove all risk. A salesperson who signs deals in your name can still create a PE. Whether your hire creates one depends on their role and the country, so it is worth checking before they start. We cover this in EOR and permanent establishment.
Step 4: confirm their right to work there
The legal employer must check that the person is allowed to work in that country before they start. Who needs a work permit depends on the person's nationality and on the country. The same person may need nothing in one country and a full permit in the next, so check each hire on its own facts.
The pattern is much the same everywhere. In the Netherlands, per the Dutch Immigration and Naturalisation Service (IND), EU, EEA and Swiss nationals need no residence permit and no work permit, while others staying more than 90 days need a residence permit. In the UK, per GOV.UK's right to work checks guide, employers must check people before employing them. Permit timelines vary a lot, so plan the start date around the permit, not the other way round.
Step 5: give them a local employment contract
The contract must follow the law of the country where the person works, even if your company is based elsewhere. Local law sets rules on notice, leave, working time and pay. A contract written for your home country may break them without anyone noticing until there is a dispute.
In the EU, Directive (EU) 2019/1152 sets a deadline. Key terms, such as the job, start date, pay and hours, must be given in writing by the seventh calendar day after the first working day. The rest must follow within one month. Each EU country applies the directive through its own law, so check the local version. Then plan the first weeks with our tips for onboarding international employees.
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How these five steps play out depends on the country, the person and your plans. Talk to an Expert at Teamed to work through your situation. Teamed employs people for you in 187+ countries, from first hire to your own presence in-country.
Frequently asked questions
Do I need a local entity to employ someone abroad?
No. You can employ someone through an Employer of Record, which acts as the legal employer in that country while you direct their daily work. A contractor agreement is another option, but only if the person is truly independent, because treating an employee as a contractor can lead to back taxes and penalties.
How long does it take to employ someone internationally?
It depends on the route and the person. Setting up your own entity takes time. If the person needs a work permit, the immigration authority sets the timeline, and it varies by country, so the permit is often what decides the start date.
Does a home office create a permanent establishment?
Usually not, if the person works from home for less than 50% of their working time over any 12-month period. That is the test in the 2025 update to the OECD commentary. At 50% or more, the facts decide, including whether there is a business reason for them to be in that country. The commentary is guidance, not law, and some countries read parts of it differently.
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