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How to Legally Hire Remote Developers Without Setting Up a Local Entity




Remote is no longer a perk—it's the default.

But here's the problem most founders don’t discover until it’s too late:

Hiring a developer in another country without the right legal setup can cost you. Fines, lawsuits, tax penalties, even bans from operating in certain regions.

So how do fast-scaling startups hire top talent across borders without the legal and financial mess?

This guide breaks it down.



The Risks of Hiring Without Legal Structure

Too many founders go the “quick and dirty” route:

  • Pay a freelancer through PayPal or Wise

  • Skip contracts or use a generic one they found online

  • Treat the person like an employee (set hours, full control)

That’s called misclassification—and it can lead to:

  • Back taxes & penalties

  • Legal liability in the developer’s home country

  • Being banned from hiring in that region

The solution? Hire legally without setting up a local entity.

Here’s how.



Option 1: Use a Contractor Agreement (When It’s Short-Term or Flexible)

Best for:

  • MVP builds

  • Freelancers or part-time specialists

  • Founders just starting out

How to stay compliant:

  • Use a clear independent contractor agreement

  • Let them control their own hours, tools, and methods

  • Avoid offering employee-style benefits or long-term exclusivity

Pro tip: We recommend tools like Deel, Remote, or our own vetted contractor agreements for Southeast Asia (SEA) developers.



Option 2: Use an Employer of Record (EOR) (When It’s Long-Term or Full-Time)

Best for:

  • Scaling remote teams

  • Full-time or high-commitment roles

  • Startups raising or post-traction

What is an EOR? An EOR is a company that legally employs your developer on your behalf in their home country. You pay the EOR, they handle:

  • Payroll

  • Taxes

  • Local compliance

  • Benefits & contracts

It’s like having a back-office HR team in every country—without opening an entity.

Popular EOR platforms: Deel, Remote, Oyster, or partners like us who bundle EOR with tech hiring.



Bonus: What We Do for Founders

We help startup founders:

  • Hire pre-vetted remote developers across SEA

  • Choose the right model (Contractor vs EOR)

  • Handle payroll, contracts, onboarding & compliance

All without:

  • Setting up a local entity

  • Getting buried in legal paperwork

  • Wasting 3–6 months searching on your own



Ready to Build a Global Team (the Smart Way)?

Let’s make your next hire fast, legal, and headache-free.


Book a free consult to talk strategy—or

Drop us a message about what you're building, and we’ll send you tailored options.




 
 
 

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