Navigating Global Hiring: Do We Need a Legal Entity in Each Country for Remote Workers?

I'm Nathalie, and I am extending a warm greeting to each of you. As a newcomer to the community, I seek your invaluable insights on a pertinent matter. In our relentless pursuit of encouraging diversity within our ranks, our organization has embarked on a global recruitment drive for fully remote positions. Presently, we are keen to harness talent from the African continent as full-time employees, not contractors. However, our deliberations have led us to a crucial question: Are we legally obligated, in accordance with local labor laws, to establish a legal entity in each country from which we intend to hire? Your expertise on this subject is invaluable and would be greatly appreciated.

Hello Nathalie, welcome to the community. That's great to hear your company is looking to improve its team diversity. I believe working with colleagues from different backgrounds, countries, and cultures can bring tremendous value to your organization. Kudos for this 

To answer your question directly: NO! You do not need to have a local entity in the talent's country to legally hire them as 'employees'.

Don't get me wrong - you do need to stay fully compliant with the talent's local labor laws, but you have no obligation to set up a subsidiary in the country, which can be costly and time-consuming.

One common workaround is using an employer of record service provider. These companies take away the complexity of foreign laws and assume the compliance responsibility on your behalf.

If you are looking to hire in Africa, I would advise you to look for an EOR company with a track record of delivering compliant hiring solutions. My current employer uses the services from Breedj (www.breedj.com). We have been using them for almost 2 years now, and the process has always been flawless.

Hope this helps. Let me know if you have any other questions.