Hiring Remote Workers Outside the U.S: What You Need To Know

With the rising cost of hiring talent based in the United States, many companies have looked to remote nearshore workers for years. Suddenly, the Covid-19 pandemic made it clear that remote work is possible and it can help businesses thrive. Today, hiring remote international workers has become a popular option for companies, as it allows them to tap into a global pool of talent.

The benefits are clear, especially for small businesses and startups looking to bring on workers that won't break the bank. Remote workers outside the U.S. are cost-effective, educated, experienced, and enthusiastic about getting the job done right.

But what do companies need to know to hire workers outside the United States? Are there any special visa requirements or tax laws that businesses need to know to bring an international remote worker onboard the team?

Here are the essentials of hiring remote workers outside of the U.S. to help you get started.

Understand Visa Requirements for International Remote Workers

One significant hesitation many companies have when hiring international workers is the hassle of visas. For example, a U.S.-based companies may not want to deal with the red tape of sponsoring a visa for a remote worker based in another country.

Here's the great news - if you're hiring a remote worker who will remain outside of the United States, you don't need to worry about visas at all. Seriously — there's no reason to get a visa for a remote international worker who won't have to enter the United States.

However, if you ever need to bring your talent to the United States for any reason, even for a short amount of time, you will need to acquire the proper documentation.

On the other hand, if your remote employee has U.S. citizenship, you won't need to acquire any documentation, as they can come and go as they please as long as they have a valid passport.

Know Your Tax Laws

There are several different ways to calculate tax withholdings for foreign workers, and this is something that you'll want to get right the first time. Failing to pay the appropriate federal taxes on compensation can result in heavy-duty fines for your business later.

In most cases, your remote international worker will likely not hold U.S. citizenship, and all of the remote work will be performed outside the country. In that case, you'll want your worker to fill out Form W-8BEN to ensure you have the appropriate documentation.

However, if all goes well and your worker is indeed a nonresident alien, it's unlikely their wages won't be subject to withholdings at all.
If, for some reason, their status is unable to be verified, you may need to withhold up to 30% of their wages.

The tax situation is trickier if the nearshore worker is a U.S. citizen or if they perform any portion of their work within the United States.

If your worker is a U.S. citizen, they'll need to complete a W-9 form like any other in-house employee. Your employee will then be responsible for managing their wages and taxes, and you'll be responsible for producing a 1099 for that employee. (The one exception is if you're releasing your wages to the employee via PayPal, which sends its own 1099s).

Choose the Right Global Employment Solution

There are many different ways to hire and pay an international remote worker.
You could take the DIY approach, which includes finding and vetting your own candidates and dealing with all the red tape that comes with it. However, this probably isn't the best solution if you're a small business or startup with limited resources.

Instead, consider partnering with a global employment solution (GES). GES providers can help businesses of all sizes find, hire, and manage international remote workers quickly and easily.

A good GES provider will also help you with all the compliance-related issues that come with hiring international remote workers, such as payroll, taxes, and visas.

Hiring international remote workers is a great way to tap into a global talent pool. Our experts at Coders Valley have years of experience helping U.S. companies find global talent to fit their precise needs. Coders Valley is a recruitment agency that allows US-based companies to find cost-effective English-speaking developers and other digital talents from Latin America.

Contact Coders Valley today if you're ready to start hiring international remote workers for your business. We can help you find the best talent worldwide to fit your specific needs and budget.