Hiring remote employees in other countries: A practical guide for UK businesses

Struggling to hire the right people in the UK without blowing your budget?

You’re not alone. For many UK businesses, the move towards global hiring comes down to two things: cost and access to talent. Salaries, office space, and competition for skilled workers in the UK have risen sharply, making it harder for startups and growing companies to build teams locally.

It’s no surprise that 86% of companies in the UK, US and Germany plan to increase overseas recruitment by 2027, according to a survey of 423 HR and talent leaders.

The good news? Yes, a UK company can legally hire a foreign employee remotely. The key is making sure employment contracts, payroll, and compliance follow the labour laws in the employee’s country.

In this guide, we’ll explain how to hire remote employees in other countries, the legal options available to UK businesses, the best regions to hire from, and the practical steps to build a global team that actually works.

Related read - Benefits of working remotely for employees and employers

Why UK companies are hiring remote employees internationally

1. Access to global talent

What if the perfect candidate for your role simply doesn’t live in the UK?

Many industries across the UK face ongoing talent shortages. In fact, 76% of UK employers report difficulty filling roles because they cannot find skilled talent.  

Hiring remote employees internationally changes that equation completely. Instead of searching within a small local talent pool, businesses can suddenly access professionals from across the world.

Common roles UK companies hire internationally include:

• Software developers

• Customer support teams

• Designers

• Marketing specialists

2. Cost efficiency

What if you could grow your team without doubling your hiring budget?

Cost is one of the biggest reasons companies start hiring remote employees in other countries. Salaries vary widely between regions, and this creates opportunities for businesses to build strong teams while keeping costs under control.

Take technical roles or customer support, for example. Skilled developers or support staff in certain countries can often cost 30-60% less (with Black Piano, often even more!) than equivalent hires in the UK. That doesn’t mean underpaying people, of course. In fact, companies should always aim to offer competitive salaries based on local market standards.

The advantage simply comes from differences in living costs and salary benchmarks. Businesses can reduce hiring expenses while still offering attractive, competitive compensation in the employee’s country - a win for both sides!

3. 24-hour business operations

Imagine your business making progress even while you sleep. Distributed teams across different time zones make this possible. When employees are located in multiple regions, work can continue round the clock.

For example, a UK company might have developers in India or Eastern Europe working while the UK team is offline. By the time the UK team logs in the next morning, progress has already been made.

This approach is especially useful for:

• Customer support teams

• Software development

• Global digital services

Many growing companies use this model to maintain faster delivery cycles and provide better service coverage for international customers.

4. Faster scaling for startups

Need to grow your team quickly, but local hiring is moving at a snail’s pace?

Startups and scaling businesses run into this problem all the time. Finding the right person locally can take weeks, sometimes months, especially in competitive sectors where everyone is chasing the same talent.

Hiring remote employees internationally changes the pace completely. Instead of waiting around for the perfect local candidate to appear, businesses can tap into skilled professionals across global markets.

For startups that need to move fast, that flexibility is a game changer. It means launching projects sooner, handling growing workloads more easily and building specialised teams without getting stuck in long hiring queues.

3 Best ways to hire a foreign employee remotely

Now, how does the whole thing actually work?

Good question. When UK companies start hiring remote employees in other countries, there are usually 3 main ways to do it. Each option comes with its own pros, cons, and level of complexity.

1. Set up a local entity in that country

Want complete control over your overseas team? You’ll need a local entity.

This approach means registering a subsidiary or branch in the country where your employee is based. Once that entity is set up, your company becomes the legal employer in that country.

This model is common for larger businesses planning long-term expansion in a new market.

Pros

• Full operational control over employees

• Ability to build a long-term presence in that country

• Suitable for companies opening offices abroad

Cons

• Expensive and time-consuming to set up

• Requires legal, accounting, and tax compliance in the new country

• Ongoing administrative responsibilities

• Often unnecessary if you only want to hire a few remote employees

For many startups and SMEs, setting up an entity just to hire one or two people abroad can be far more effort than it’s worth.

2. Hire international contractors

Need someone quickly for a short project? Contractors can be the fastest route.

In this model, workers operate as independent freelancers rather than employees. They invoice your company for their services, usually on a monthly or project basis.

This approach is popular for short-term work or specialist projects.

Pros

• Quick and flexible hiring process

• No need to run international payroll

• Ideal for temporary projects or specialist tasks

Risks

• Potential worker misclassification penalties if contractors are treated like employees

• Less control over working hours and processes

• Contractors may work with multiple clients at the same time

• Not always suitable for building a long-term team

Because of these risks, many businesses avoid relying heavily on contractors for core roles or permanent team members.

3. Use an Employer of Record (EOR)

This one’s for you if you want to hire globally without becoming an overnight expert in international employment law.

An Employer of Record legally employs workers in another country on your behalf. The employee works day-to-day for your business, but the EOR handles all the complicated employment requirements locally.

These responsibilities usually include:

• Local employment contracts

• Payroll and tax compliance

• Statutory benefits and local employment requirements

• HR administration and onboarding

At Black Piano, our unique end-to-end EOR services model simplify global hiring even further. Along with everything mentioned above, we also offer recruitment without upfront costs!

Let’s take an example!

Let’s say a UK SaaS company wants to hire two software developers and a customer support specialist. Hiring locally could take months and cost well over £150,000 a year in salaries alone.

Instead, they partner with Black Piano. We help them build a dedicated team in India, handling recruitment, employment contracts, payroll and compliance through our Employer of Record service.

The employees work full-time for the UK company, just like any other team member, while we take care of the legal and HR side locally.

This approach allows the company to hire faster, access highly skilled talent, and reduce hiring costs by 50–70%, all without setting up a legal entity overseas.  

Best countries to hire remote employees

Not every country offers the same advantages when it comes to remote hiring. The best locations usually combine strong talent pools, good English communication, and competitive salary levels.

1. India

Looking for a large talent pool without the eye-watering salary costs? India is often the first place UK companies look.

India has become one of the world’s biggest hubs for remote talent. India accounts for about 31.7% of the world’s STEM (Science, Technology, Engineering and Mathematics) graduates and is projected to produce around 18 million STEM graduates by 2027, giving businesses access to one of the largest technical talent pools globally.

Common roles UK companies hire in India include:

• Software developers

• IT specialists

• Data analysts

• Accountants

• Marketing professionals

• Customer support teams

Why UK companies choose India

• Competitive salary levels compared with the UK

• A mature outsourcing and remote work ecosystem

• A large and continually growing pool of skilled graduates

• A huge English-speaking workforce

Also read - Why India is the right choice for offshoring?

2. Philippines

Philippines is widely known for its strong business process outsourcing (BPO) industry and highly service-oriented workforce. English is an official language, and professionals are accustomed to working with Western companies.

Typical roles hired from the Philippines include:

• Customer support representatives

• Virtual assistants

• Finance and administrative staff

Why businesses hire here

• Excellent spoken and written English

• Cultural compatibility with Western businesses

• Deep experience in customer service and back-office support

Related read - India vs. Philippines offshoring: Which country is better?

3. Poland

Poland has developed one of the most impressive tech ecosystems in Europe. Cities like Warsaw, Kraków, and Wrocław have become major hubs for software engineering and fintech development.

Because Poland is part of the EU, hiring can sometimes be simpler from a regulatory perspective compared with hiring in more distant regions.

Why companies hire in Poland

• Highly skilled technical workforce

• Strong European tech ecosystem

• Geographic proximity and cultural alignment with UK businesses

Key legal and compliance challenges when hiring internationally

Hiring someone overseas sounds exciting - until the legal paperwork enters the chat.

Here are the key compliance challenges UK companies need to understand when hiring internationally.

1. Local employment laws

Every country has its own employment rulebook, and it’s rarely a short one. Employers must follow local laws covering things like:

• Minimum wage

• Working hours and overtime

• Termination and notice periods

• Statutory benefits such as holiday leave or pensions

Miss those rules and things can get messy quickly. Non-compliance can lead to penalties, employee disputes, or even legal action. In short, contracts and employment terms must follow the laws of the employee’s country, not the UK.

2. Global payroll and taxes

Paying someone overseas isn’t quite as simple as sending a bank transfer and calling it a day. International payroll involves managing currency conversions, payroll deductions, social contributions, and local tax reporting.  

Multiply that across several countries and suddenly you’re juggling multiple tax systems, filing deadlines and compliance requirements.

Without the right structure, payroll can become complicated surprisingly fast.

3. Worker misclassification

Thinking of hiring contractors instead of employees? It can work - but it comes with risks.

Worker misclassification happens when someone is treated as a contractor even though their role looks and behaves like an employee. Governments are increasingly strict about this.

If authorities decide a contractor has been misclassified, businesses may face back taxes, penalties, and legal disputes.

4. Permanent establishment risk

Here’s one many companies don’t see coming!

Hiring employees in another country can sometimes create a permanent establishment, meaning tax authorities may view your company as having a taxable presence there. That could trigger corporate tax obligations, VAT registration, and additional reporting requirements.

Simplify international hiring with Black Piano

Want to hire globally without dealing with legal paperwork, payroll rules, and compliance headaches? That’s exactly what we do at Black Piano.

Actually, more!

Our end-to-end Employer of Record (EOR) service manages everything behind the scenes, so you can focus on growing your team.

This includes:

• Recruitment services

• Employee onboarding

• International payroll management

• Locally compliant employment contracts

• Continuous HR support  

In short, we take care of the complicated bits - compliance, payroll, and HR - while your team member works directly with you.

Our EOR services start from just £550 per employee per month, making global hiring simple and accessible for startups, SMEs and fast-growing companies.

Thinking about building an international team? Contact us today to get started.

FAQs

1. How much does it cost to hire remote employees in other countries?

Costs vary by country and role. Many UK companies reduce hiring costs by 30-70% compared with local salaries. At Black Piano, we help UK businesses find top talent in India and save costs up to 70% or more.  

2. How long does it take to hire a remote employee internationally?

Hiring timelines depend on the role and location. With an Employer of Record, companies can usually hire internationally within a few weeks instead of months required for setting up entities. Black Piano finds the best talent based on your requirements in as little as 3-5 working days!

3. Do remote international employees pay UK tax?

Usually, no. Remote employees pay income tax in their own country based on local regulations. Employers must follow that country’s payroll and tax rules rather than UK PAYE requirements.