4 Legal Ways to Hire Remote Employees in Latin America (2025 Guide)

Latin America has emerged as the premier destination for remote talent across all business functions, with the region’s 2+ million professionals offering expertise spanning operations, finance, marketing, customer service, and technical roles. Brazil and Mexico alone produce over 350,000 skilled graduates annually, while countries like Colombia and Argentina consistently rank among the top regions globally for talent quality and business acumen. For US companies struggling with escalating payroll costs and persistent talent gaps, nearshoring to this talent-rich region isn’t just an alternative. It’s a competitive advantage.

This guide delivers four battle-tested strategies to access Latin America’s professional workforce at up to 70% lower costs than US equivalents. Each approach breaks down into clear steps, measurable benefits, and honest risks. No theory. Just actionable intelligence you can deploy this quarter.

Strategy 1: Employer of Record (EOR)

What It Is

An Employer of Record acts as the legal employer for workers you hire in Latin America. You don’t establish a local entity. The EOR handles contracts, payroll, taxes, benefits, and compliance with local labor laws. You control the work; they manage the administration. Hire a senior developer in Mexico, and the EOR ensures they’re paid correctly, insured properly, and compliant with Mexican labor regulations while you onboard them into your projects immediately.

How to Implement

Step 1: Select an EOR with deep Latin America expertise. Look for providers like Viva Global that specialize in the region rather than generic global platforms.

Step 2: Define your needs precisely. Specify the role, required skills, and budget (e.g., $45,000 annually for a senior React developer in Colombia).

Step 3: Let your EOR handle recruitment. At Viva Global, we recruit, vet, and provide access to our database of 10,000+ pre-screened candidates. Some EORs only handle paperwork after you recruit.

Step 4: Launch quickly. With proper EOR support, your hire is operational in 1-4 weeks, depending on background checks and any required medical screenings in certain countries.

Benefits

Speed: Hire in 1-4 weeks versus 60-90 days for domestic US recruiting. The global EOR market reached $4.9 billion in 2025 and is projected to hit $8.3 billion by 2033, driven largely by companies seeking faster international hiring.

Compliance confidence: Zero legal risk. No surprise fines. 47% of US companies engaged EOR providers in 2024 specifically to manage tax, legal, and payroll risks effectively.

Cost efficiency: Avoid $15,000-$50,000 entity setup fees. Monthly EOR costs ($599-$700) are negligible compared to legal entity overhead.

Flexibility: Scale your team up or down without long-term commitments. 60% of startups used EOR services to enter two or more new markets within a single year.

Time zone alignment: LATAM talent works in real-time with US teams, with only 0-3 hours difference across most major cities.

Numbers You Should Know:

72% of organizations expanding into new markets used hiring solutions like EORs in 2023
47% of startups rely on EOR for initial LATAM hires
EOR services reduce hiring timelines by 50% compared to domestic recruiting
Global EOR market growing at 6.8% CAGR through 2033

Risks

Less direct control over specific employment terms, though you maintain full control over day-to-day work and performance management.

Fees accumulate for large teams. However, ROI remains positive because you eliminate monthly compliance management, legal reviews, and HR overhead that typically consume 20+ hours monthly.

The EOR model is plug-and-play: fast, compliant, and minimal setup investment. If you need talent deployed quickly without legal complexity, this strategy dominates.

Strategy 2: Independent Contractors

What It Is

Independent contractors are self-employed professionals you hire for specific projects or defined scopes with no long-term employment commitment. Think of a Brazilian QA engineer testing your app for eight weeks. You agree on deliverables, timeline, and payment (e.g., $6,000 for the engagement), then pay them directly via invoice. No employer duties like payroll taxes or benefits. It works brilliantly for short-term or highly specialized work, but only when you maintain proper legal boundaries.

How to Implement

Step 1: Source talent through specialized platforms. Use Upwork or Fiverr for quick projects, or partner with regional staffing agencies for vetted LATAM contractors.

Step 2: Define crystal-clear terms. Document specific deliverables, deadlines, and payment schedules in writing. Ambiguity creates misclassification risk.

Step 3: Vet thoroughly. Review portfolios, technical skills, prior client feedback, and availability before committing.

Step 4: Launch fast. Contractors can often start within days once agreements are signed and initial payments processed.

Benefits

Rapid deployment: Onboard in days, not weeks. Perfect for urgent projects or skill gaps.

Maximum adaptability: Hire precisely what you need, when you need it. No overhead when projects end.

Specialized expertise: Access niche skills (blockchain developers, UX researchers) without full-time commitments.

Numbers You Should Know:

38% of global companies used contractor platforms to onboard freelancers in 2024
Contractor relationships cost approximately $29/month per contractor versus $599/month for EOR employees
LATAM has 2+ million software developers available for contract or full-time work

Risks

Misclassification penalties: This is the killer risk. A 2023 IRS audit found 38% of contractors were misclassified, costing the US government $3.4 billion in lost tax revenue. Labor authorities globally are cracking down hard. In Latin America specifically:

Brazil’s labor courts consistently rule in favor of workers in misclassification cases, requiring retroactive benefits and severance
Mexico requires contractors to register with REPSE, and violations trigger back-pay obligations
Penalties can exceed $100,000 per worker in high-compliance enforcement actions

Limited control: You cannot manage contractors like employees. Setting schedules, requiring specific tools, or providing extensive direction in Mexico or Argentina automatically implies employment status, triggering reclassification.

Contractor taxation complexity: In some LATAM countries, independent contractor tax filing is complicated, which shrinks your available talent pool. Many skilled professionals prefer employee status for stability and benefits.

Lower loyalty: Top talent typically wants long-term stability, retirement contributions, and insurance. Contractor-only arrangements struggle to retain high performers beyond 6-12 months.

Contractors work well for nimble, project-based needs. Keep boundaries clear, document everything, and understand that this approach limits your talent pool to those comfortable with gig arrangements.

Strategy 3: Building a Subsidiary

What It Is

Building a subsidiary means establishing your own legal entity in Latin America. You’re opening a branch in Santiago or Medellín. You become the direct employer, controlling hiring, culture, and compliance. It’s a substantial undertaking: $15,000-$50,000 and 2-16 weeks to launch, with ongoing complexity navigating each country’s unique registration requirements and labor regulations.

How to Implement

Step 1: Choose your initial country strategically. Mexico offers proximity and trade agreements. Colombia provides cost efficiency. Brazil delivers the largest talent pool (500,000-760,000 developers). Focus on one country initially to contain costs.

Step 2: Engage local legal and HR experts immediately. Entity registration, tax setup, and labor law compliance require specialized regional knowledge. Trying to DIY this process courts disaster.

Step 3: Register officially. Complete all government registrations, obtain tax IDs, establish bank accounts, and file required documentation. This process takes 2-16 weeks depending on the country and documentation completeness.

Step 4: Build local HR infrastructure. Hire or contract local payroll specialists, compliance managers, and benefits administrators. Budget $2,000+ monthly for this team.

Step 5: Recruit actively. Use local job boards, university partnerships, and regional recruiting firms to build your talent pipeline.

Benefits

Total control: Your team, your culture, your processes. No intermediaries. No compromises.

Long-term foundation: Once established, your subsidiary becomes a stable platform for sustained regional growth and market presence.

Scalability: As you grow, your local entity scales with you. Add 5 or 50 employees using the same legal infrastructure.

Numbers You Should Know:

Only 5% of companies start with subsidiary approach when entering LATAM markets
Companies using subsidiaries report 20% higher team retention than those using other models
Incorporation costs: $15,000-$50,000 in Mexico, Colombia, or Brazil
Ongoing overhead: $2,000+/month for local HR, payroll, and compliance management
Time to complete registration: 2-16 weeks depending on country

Risks

High initial investment: Between incorporation fees, legal costs, banking setup, and initial compliance infrastructure, you’re investing $20,000-$75,000 before hiring your first employee.

Ongoing overhead: Local HR staff, payroll systems, tax filing, benefits administration, and compliance monitoring create permanent monthly costs regardless of team size.

Compliance burden: Every labor law violation, tax filing mistake, or benefits error is your direct responsibility. Brazil’s labor system is notoriously complex. Mexico’s IMSS (social security) requirements are rigid. Mistakes trigger personal liability.

Time investment: 2-16 weeks minimum to establish legal presence. Some countries (like Brazil) require 60-90 days just for entity setup, not including bank account establishment.

A subsidiary represents a bold, long-term commitment. If you have substantial capital, patience for bureaucracy, and vision for a major LATAM presence, it builds a powerful foundation. For companies testing the waters or seeking speed, it’s overkill.

Strategy 4: Local Partnerships

What It Is

Local partnerships involve collaborating with an established Latin American company to access their talent pool and infrastructure. You’re not hiring independently or building your own entity. You’re teaming with a firm already operational in the region. This could be a Mexican staffing agency supplying developers or a Colombian tech provider managing portions of your operations. The catch: finding the right partner requires extensive vetting, strong connections, and patience.

How to Implement

Step 1: Identify potential partners with proven track records. Research firms through referrals, industry associations, and regional business networks. Prioritize companies with US client experience.

Step 2: Vet thoroughly. Check references obsessively. Review past projects. Verify legal standing and compliance history. Interview leadership teams. Poor vetting here creates massive downstream problems.

Step 3: Negotiate clear terms. Define responsibilities, costs, performance metrics, and timelines explicitly in written agreements. Include exit clauses for underperformance.

Step 4: Launch collaboratively. Expect several weeks to months for partnership agreements, compliance verification, and operational integration. This isn’t fast.

Benefits

Faster than building solo: Quicker than establishing your own subsidiary because you leverage existing infrastructure, though still slower than EOR solutions.

Shared operational burden: Your partner manages local compliance, HR administration, and payroll complexities while you focus on work direction and outcomes.

Local expertise access: Your partner brings deep knowledge of regional labor markets, cultural norms, and regulatory requirements.

Numbers You Should Know:

Only 2% of LATAM hiring begins through partnership approaches
Partnerships can lower market entry costs by 35% compared to building subsidiaries
20% of partnerships falter due to poor coordination or misaligned expectations
Finding and vetting proper partners typically requires 4-8 weeks minimum

Risks

Time-intensive vetting: Without existing connections, finding trustworthy partners in Brazil, Mexico, or Colombia takes significant research. Cold outreach rarely works. You need referrals and extensive reference checking.

Quality variance: A weak partner tanks your outcomes. 20% of partnerships fail due to poor quality control, missed deadlines, or cultural misalignment. Your reputation suffers alongside theirs.

Reduced direct control: You’re dependent on your partner’s processes, systems, and management quality. When they underperform, your options are limited without contract termination.

Hidden costs: Partnership fees, revenue sharing, and coordination overhead can approach subsidiary costs without providing equivalent control or transparency.

Partnerships offer acceleration if you find the right collaborator. But “if” is doing heavy lifting. You’ll invest serious upfront time building trust and verifying capabilities. Choose wisely, document everything, and maintain realistic expectations about control and coordination complexity.

Which Strategy Fits Your Needs?

Strategy	Time to Start	Control Level	Best For	Startup Adoption
EOR	1-4 weeks	Medium-High	Quick hires, compliance confidence, speed-to-market	47% of startups
Contractors	1-2 weeks	Low-Medium	Short projects, specialized expertise, maximum flexibility	38% use contractor platforms
Subsidiary	2-16 weeks	High	Long-term regional presence, total control, scaling ambitions	5% of companies
Partnerships	4-8 weeks	Medium	Faster entry with local guidance, shared infrastructure	2% of companies

The numbers tell the story. EOR dominates because it balances speed, compliance, and cost. Contractors work for tactical needs but carry serious legal risk. Subsidiaries and partnerships serve niche use cases requiring either total control or deep local collaboration.

Quick Trivia: Did you know that US companies increased their LATAM hiring by 50% year-over-year in 2023, while international companies’ hiring interest in the region jumped 156% in just the past year? The nearshoring wave isn’t coming. It’s here.

Your Next Move in LATAM Talent Acquisition

You’ve got the playbook: four strategies, unfiltered. The EOR path delivers speed and simplicity. Partnerships and subsidiaries serve specific strategic needs. Contractors fill gaps but demand careful legal boundaries.

Here’s what matters: Latin America’s 2+ million developers, producing 220,000+ new STEM graduates annually, offer you a competitive edge your competitors are already exploiting. While you’re reading this, they’re hiring. More than 60% of large US companies now hire from three or more LATAM countries.

The question isn’t whether to hire in Latin America. It’s how fast you can deploy the right strategy for your situation.

The Viva Global Advantage

At Viva Global, we’ve transformed remote hiring through our proprietary Smart Matching System™. We don’t just connect you with Latin American talent. We find the perfect match for your specific needs while handling all compliance and administrative complexity.

Our system evaluates technical skills, communication styles, cultural compatibility, and remote work aptitude to ensure seamless integration with your existing team. With access to 10,000+ pre-screened candidates and a streamlined process delivering top candidates in just 7-10 days, we’ve eliminated the guesswork from remote hiring.

Ready to transform your team with elite LATAM talent? Book a free consultation call today.