Expanding your team overseas whether hiring a remote employee in Europe or launching a satellite office is a massive opportunity for growth and cost efficiency. However, this process is fraught with complex regulatory risks that can stop scaling businesses in their tracks.
If you’re considering hiring outside of your primary country, you’re likely grappling with complex questions around contracts, tax, and compliance. Let’s break down the four key global engagement models and how a strategic RaaS partner manages this complexity.
1. You’re Probably Thinking: What are the Best Global Engagement Models?
When hiring talent abroad, you typically have four primary options, each with different levels of compliance and administrative burden:
| Model | Description | Legal Status | Key Challenge |
| Freelance/Contractor | Hiring an individual on a project-by-project basis for specific outputs. | Independent contractor. | High risk of misclassification if management is too strict. |
| Employer of Record (EOR) | A third-party vendor becomes the legal employer in the foreign country. | Employee (of the EOR). | Ideal for compliant hiring without setting up a legal entity. |
| Project-Based Teams | Outsourcing a specific, time-bound function to a firm with its own staff. | Employee (of the outsourcing firm). | Best for non-core, temporary functions where liability is external. |
| Directly Managed Teams | Hiring a team locally and establishing your own foreign legal entity. | Employee (of your foreign entity). | Highest initial setup cost and ongoing complexity for the client. |
2. You’re Probably Thinking: When Should I Use Freelance vs. EOR?
(a) The Freelance/Contractor Model
This is the fastest way to inject specialist expertise, but requires careful risk management.
- Best For: Short-term projects, advisory roles, or non-core business activities.
- The Compliance Risk: The moment you treat the freelancer like an employee (mandating fixed hours, providing equipment, strict management), you risk misclassification fines in countries like the UK, EU, and Australia.
- Good Vendors (for compliance/payment): Platforms like Deel, Remote, or dedicated regional payroll services can help manage payments compliantly.
(b) The Employer of Record (EOR) Model
This is the compliant solution for hiring permanent, full-time staff in a country where you have no legal presence.
- Best For: Compliant, long-term international employee hiring without the burden of setting up a local entity.
- How it Works: The EOR manages all local payroll, benefits, tax, and labour law compliance on your behalf. You manage the employee’s day-to-day work.
- Good Vendors: Remote, Deel, and Rippling are key global EOR providers.
- You’re Probably Thinking: Which Partners Manage the Risk?
Your RaaS partner (like Glass Octopus) works with these specialist vendors to simplify the process.
- For EOR: Your RaaS partner manages the recruitment and onboarding, then hands the legal and payroll burden to a trusted EOR like Deel or Remote.
- For Project-Based Outsourcing: For functions like specific software development, vendors like Toptal (for tech) or regional BPO firms manage their own teams, handling all employment liabilities themselves.
- For Directly Managed Teams: Glass Octopus and other RaaS providers can support you with trusted partners managing the initial recruitment and setup of the local team, alongside ongoing training and development to embed your unique culture overseas.
By leveraging these partnerships, it enables you to recruit top talent compliantly in markets like the UK, NZ, and AU, eliminating the need for you to become an overnight expert in international labour law.
Conclusion: Turn Global Ambition into Operational Simplicity
Global mobility should be an accelerator, not an anchor. Trying to navigate local labour laws, contracts, and payroll single-handedly is inefficient and financially dangerous. By leveraging a strategic RaaS partner who manages the Employment of Record process and provides expertise across Freelance and Project-Based contracts, you eliminate compliance risk, significantly cut administrative overheads, and ensure your new international hires are compliant from day one.
We also offer the Go Flex model, providing expert Fractional leaders for strategic, project-based roles at home and abroad.
