How to hire staff in Latin America without a local company?

Would you like to hire employees from other parts of the world but you don´t know where you start? Perhaps this article will help you take courage and take the first step.

Post main image. Illustrative EOR vs PEO

Thanks to the rapidly growing information flow and an ever-present internet access, it has become extremely easy to interact with people, companies, and governments around the globe. The emerging markets of Latin America are no exception to this transition process.

Traditionally, Latin American markets have been reliant on agriculture and on the extraction of natural resources. However, in recent years, these have begun to be substituted for industrial production and services. As a result, increasing amounts of foreign direct investments which come to this region are in a great extent a reason for this shift.

Are you thinking of doing business in Latin America, an attractive option is through an employer of record (EOR)? 

 

What is an EOR?

An EOR is an organization that supports companies through the provision of human resources services. That generally means recruiting, hiring, firing, and paying all taxes and benefits to local employees, as part of a comprehensive EOR service. However, a more limited service can also be provided based on your needs.

Essentially, an EOR will manage time-consuming HR tasks, leaving their clients to focus on other aspects of their businesses.

 

Benefits of contracting through an EOR in Latin America

Besides saving your company time and manpower, other benefits of hiring an EOR in includes:

Profitability: Hiring staff through an EOR reduces administrative and recruiting expenses and saves you money if you want to hire local staff but do not have operations large enough to warrant company incorporation or branch formation.

Recruitment: A reliable EOR will have an established recruitment team with abundant knowledge of the local market, which will quickly be able to find the most suitable and qualified personnel for your company.

Compliance: With their experience and knowledge of the local market, EORs will ensure as a matter of course that you are in full compliance with all the countries labor laws and regulations.

 

Benefits of not having a local company

The EOR is charged with carrying out the legal and regulatory requirements of immigration, employment and payroll, but does not participate in day to day work activity.

In essence, the EOR is the registered employer for the worker, but does not have any supervisory or management role vis a vis the employee’s position. The original employer maintains the substantive work relationship, making all decisions on compensation, position duties, projects and termination.

Specifically, the employer of record is the legal entity that:

  • Arranges all visas and work permits for the employee, avoiding delays or refusals
  • Provides a registered entity for running a local, compliant payroll inside the country
  • Meets all host country labor laws pertaining to local contracts and worker protections
  • Advises the client of required notice periods, termination rules and severance pay
  • Is the host country interface between the employee and government authorities

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