Compliance & Legal

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: 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: 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: 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.