Ranked #6 of 6 · 3/12 points

Your own foreign entity

You register a company in the worker's country and employ people directly under local law.

Build it yourself · Last reviewed November 10, 2026

Verdict: Makes sense only at scale in one country; for most teams it is the last route to consider, not the first.

Setting up your own entity means registering a subsidiary or branch in the worker's country, opening a local bank account, registering for tax and payroll, and employing people directly.

It gives the most control and, at enough headcount, can cost less per hire than paying an intermediary. It also brings ongoing filings, a local accountant, and an exit that takes months. Most teams reach it only after proving a team works through another route.

Who it is for

Companies committed to a large, long-term team in one country, with the legal and finance resources to run a foreign subsidiary.

Choose a different route if

You are hiring your first few people abroad: every other route is faster and cheaper to start.
You are not sure which country you will hire in long-term.
You don't have in-house legal and finance capacity for another jurisdiction.

Strengths and limits

Strengths

The most control: your company, your contracts, your benefits.
No intermediary margin on each hire once it is running.
A local presence that can support office space and a large team.

Limits

Setup takes months and needs local lawyers and accountants.
Ongoing filings, audits, payroll and tax obligations in that country.
Hardest route to exit: closing an entity takes time and money.
No sourcing, vetting or replacement included.

What it costs

Set-up, legal, accounting and registered-office costs vary by country and firm. Get quotes from local counsel and an accounting firm in the country before you decide.

How it scores

All-in cost transparency	Weak Set-up and running costs vary and only surface through local quotes.
Vetting depth	Weak None included: you recruit yourself or pay a recruiter.
Compliance	Fair Fully compliant if run well, but every obligation is yours to meet.
Continuity	Weak No replacement; you rehire yourself.
Lock-in	Weak Closing an entity is slow and costly.
Control	Strong Total control over hiring, contracts and benefits.

Strong = 2 points, Fair = 1, Weak = 0. How we rank.

How it works

Choose the country and the entity type with local counsel.
Register the company, a bank account, tax and payroll.
Recruit and employ people under local employment law.
Run monthly payroll, filings and annual audits in that country.

The other options

#1 Hire Overseas: The best route for most US teams hiring a dedicated offshore professional: vetted, compliant and replaceable, at a price it publishes.
#2 Other offshore staffing firms and BPOs: A sound route if the firm you pick passes every check on this page; many don't publish enough to tell before a sales call.
#3 Employer of record (EOR): The right choice once you have a candidate and want them employed properly; it does nothing to find or replace them.
#4 Direct hire as an independent contractor: Cheapest on paper and the most work in practice; it fits managers who have hired remotely before.
#5 Freelance marketplaces: Best for tasks and projects; a poor fit for a dedicated team member you are building around.