Your best finalist for a product role lives in a country where your company has no employing entity. She accepted verbally on Monday, and the start date is six weeks away. Now three routes sit on the table: set up a local company, put her through an employer of record, or sign her as a contractor because that looks fastest. Each route changes who carries the legal, tax, and social-security risk, and a wrong pick tends to surface months later in an audit, a dispute, or a tax notice.
This guide explains how to hire remote employees in another country without guessing. It walks through the decision in order, shows where each route fits, and lists the checks to finish before the first day of work. Datassist has run payroll and employer-of-record services in Turkey and across MENA for more than 25 years. The examples here draw on what we see when foreign companies hire into new jurisdictions.
How to hire remote employees: four ways to employ someone abroad
Most international remote hiring comes down to four structures. The right one depends on what the person will do, how many people you plan to hire in that country, and how long you expect to stay.
| Route | Who is the legal employer | Typical fit | Main risk |
|---|---|---|---|
| Own local entity | Your subsidiary or branch | Sustained headcount, local leadership, long-term market | Setup effort, ongoing filings, local directors |
| Employer of record (EOR) | The EOR, in the worker’s country | One to a few hires, market testing, no entity yet | Provider quality, cost transparency, exit terms |
| Genuine contractor | Nobody, the person is independent | Project work done by a truly independent business | Reclassification as an employee |
| Own foreign registration | Your company, registered for payroll or tax abroad | Specific countries that allow it | Country-specific rules and permanent establishment exposure |
Hiring international employees is really two decisions in sequence. First work out whether the person is an employee in substance, then pick the structure that employs them lawfully.
Step 1: Decide what the working relationship really is
Calling someone a contractor does not make them one. Labor authorities and courts look at how the work is actually done, and most legal systems apply a version of the same questions.
- Who decides when, where, and how the work is performed?
- Does the person work only for you, or for several clients?
- Are they integrated into your team, using your tools, titles, and reporting lines?
- Is the engagement open-ended and paid on a fixed schedule rather than per deliverable?
- Do they carry their own business risk, such as providing their own equipment and absorbing losses?
If the honest answers describe a manager directing a full-time colleague, the person is an employee in substance, and the contractor label is a liability. Genuine independence is the only legitimate basis for a contractor agreement. A contractor route chosen mainly to avoid employment costs or speed up onboarding invites trouble. Expect back pay for social security, tax assessments, and claims for statutory entitlements such as paid leave and severance.
Risk: A contractor agreement does not protect you if the working pattern looks like employment. Several countries allow a worker to challenge the label after the relationship ends, which is when the claim is most expensive.
Step 2: Choose the route that fits your headcount and timeline
Once you know the person is an employee, the question is who employs them.
When your own entity makes sense
A local subsidiary gives you full control over contracts, benefits, and culture. It also means company registration, a registered address, statutory accounting, payroll registration, and ongoing filings. For a company planning a team in that country, those costs are justified. For a single hire, they usually are not.
Our comparison of an EOR versus setting up a legal entity covers the break-even logic in more detail.
When an employer of record fits
With employer of record remote hiring, the EOR becomes the legal employer in the worker’s country. It issues a compliant local contract, registers the employee with social security, runs payroll, and withholds taxes. You keep directing the daily work. This is the standard answer when you want one or a few employees in a country without an entity.
Provider quality varies a lot. Before you sign, ask each provider who actually holds the local license or entity, what happens at termination, how fees are itemized, and whether a named person handles your account. A Professional Employer Organization or EOR service should be able to answer all four in writing.
When a contractor is the right answer
Use a contractor when the work is a defined project, the person runs an independent business, and your control is limited to the outcome. Keep the agreement specific to deliverables, and do not give them an employee title or a place in the reporting structure. If you later want a long-term role, convert them to an employee through one of the other routes rather than stretching the contractor relationship.
When to register abroad yourself
Some countries let a foreign company register directly as an employer without a full subsidiary. This can work, but it creates tax and reporting obligations in that country and may increase permanent establishment exposure. Get local advice before you take this path.
Step 3: Run the remote employee compliance checks
Whatever route you pick, finish the same four checks before the first working day. Together they make up remote employee compliance.
Employment law. Confirm the minimum content of a local contract, probation rules, working-time limits, paid leave, notice periods, and severance entitlements. Local employment rules usually apply to a worker based in that country regardless of what your home-country contract says.
Tax. Check income tax withholding for the employee and whether the arrangement creates a taxable presence for your company. In late 2025 the OECD updated its commentary on permanent establishments to address remote work from home offices. It stresses that the answer depends on how long the person works from the location and whether the arrangement has a genuine business reason. Ask a tax adviser about your facts. Do not assume a safe harbor applies.
Social security. Identify which system covers the employee, the employer contribution rates, and registration deadlines. Contributions are often due from the first day, so late registration can mean penalties.
Right to work. A remote worker who is not a citizen of the country where they live may need a work or residence permit. A work permit consultancy can confirm the requirements before you issue an offer you cannot fulfill.
Regulation Note: Check that your offer is consistent with the worker’s actual location. If the person plans to move between countries, each move can change the applicable employment, tax, and social-security rules.
Step 4: Protect data, equipment, and intellectual property
Remote employees handle your systems from home networks, so the legal and security basics need to be set before access is granted.
Start with personal data. Employee records and customer data may fall under local privacy laws, and cross-border transfers can require specific safeguards. If the worker will access customer data, confirm the legal basis for that transfer with your privacy counsel.
Next, address equipment and intellectual property. Decide whether you ship equipment or provide a stipend, and who owns the devices. Local law may govern who owns work created by an employee, so the contract should assign intellectual property clearly and in line with local rules.
Finally, document confidentiality and acceptable use. A short written policy that the employee acknowledges at onboarding is easier to enforce than an informal expectation.
Step 5: Plan payroll and exit before day one
Payroll is where a remote hire becomes real. Define the pay currency, pay frequency, statutory bonuses, allowances, and how employer costs are reported to your finance team. Local payroll calendars and statutory deadlines drive the schedule, not your head office calendar. If you expect to add more countries, a global payroll model with one reporting format saves you from reconciling a different spreadsheet per country.
Exit terms deserve the same attention. Ask what notice, severance, and final-pay rules apply, and who bears those costs under your chosen route. An EOR agreement should state this plainly. With an entity, you carry the liability directly.
A worked example: hiring one engineer in Turkey
Take a software company with no Turkish entity that wants to hire one senior engineer in Istanbul. The role is full-time, directed by the engineering lead, and open-ended. That is employment in substance, so a contractor agreement is not appropriate.
A new subsidiary would add registration, accounting, and payroll obligations for a single hire. An EOR avoids those and puts the employee on a Turkish contract with registration at the Social Security Institution (SGK). If the company later builds a team in Turkey, it can move to its own entity or a PEO arrangement and carry the employees across.
Before the offer goes out, the company confirms contract terms, the employer cost picture, data handling for the engineer’s access to production systems, and the exit terms. Teams that want the Turkish detail can explore the guide to hiring in Turkey through an EOR. Datassist runs this model in Turkey as an employer of record, with a named relationship manager and local payroll in house. We do not promise a fixed start date, because registration timing depends on the worker’s documents and the authorities involved.
Frequently Asked Questions
Can I hire an employee in another country without a local entity?
Yes. An employer of record can employ the person locally on your behalf. Some countries also allow direct foreign-employer registration. In both cases, local employment, tax, and social-security rules still apply.
Is it cheaper to hire a contractor than an employee?
Only if the person is a genuine contractor. If the relationship looks like employment, the label can be overturned and you may owe back social security, taxes, and statutory entitlements. The apparent saving can reverse.
Does one remote employee create a permanent establishment?
Not automatically. Whether a taxable presence arises depends on facts such as how much time the person works from the location and the business reason for it. Ask a tax adviser to assess your case.
How long does it take to hire someone through an EOR?
It varies by country, the worker’s documents, and the provider’s process. Treat any promise of instant onboarding with caution and ask for the steps and timeline in writing.
What should an EOR agreement include?
Look for the identity of the local employing entity, fee structure, termination and severance handling, data protection terms, and your right to move the employee to your own entity later.
Who is responsible for compliance when I use an EOR?
The EOR is the legal employer and handles local employment, payroll, and social-security obligations. You remain responsible for the work you direct, so supervision, conduct, and instructions still need to meet local rules.
Key Takeaways
- Decide first whether the person is an employee in substance, because the contractor label does not change that.
- Use an own entity for sustained headcount, an EOR for a few hires, and a contractor only for genuinely independent work.
- Finish four checks before day one: employment law, tax, social security, and right to work.
- Set data, equipment, and intellectual property terms before granting system access.
- Agree payroll and exit terms in writing, and be cautious about instant-onboarding promises.
Hiring Abroad Without Guesswork: The Bottom Line
Hiring across borders goes well when you take the steps in order. Establish the real working relationship, pick the structure that employs the person lawfully, and complete the compliance checks before the person starts. Skipping a step saves a few days and usually costs far more later.
If you are weighing an employer of record for a hire in Turkey, Datassist can walk through the employment, payroll, and social-security requirements with you. Discuss payroll requirements with Datassist and we will map the route to your situation.
This article is for informational purposes only and does not constitute legal advice. For up-to-date Turkish regulations, consult official sources or contact a qualified advisor.
Related Reading
- EOR vs Setting Up a Legal Entity: Which Is Right for Your Expansion? – How the two routes compare on cost, control, and timing.
- What Is a PEO in Turkey? Co-Employment Explained for Foreign Companies – How co-employment works when you already employ people in Turkey.
- Employer of Record in the GCC: How to Hire Without a Local Entity – The same decision for Gulf markets.
