Structuring an Offshore Hire
Contractor or EOR? Simpler than it sounds.
Most businesses engage their offshore team member as an independent contractor, the same way they'd work with a designer, a bookkeeper or an agency. The alternative is an Employer of Record, or EOR. It's flexible, it's straightforward, and it's how the majority of our clients hire. Here's how it works, and when a different setup makes more sense.
The Short Version
You agree the work. They deliver it.
An independent contractor arrangement means your team member runs their own small business. You agree what needs doing, what it's worth, and how you'll work together. They invoice you, they handle their own tax at home, and you're free of payroll setup on either side.
It suits both sides. You get flexibility to scale up or down without the weight of an employment structure. They get to build a business, keep more of what they earn, and take on other clients if they want to.
This is how most of our clients hire, and for most roles it's the right call. The rest of this page is just about setting it up so it works well, and being honest about the handful of situations where something different fits better.
Two Ways to Engage
Independent contractor or EOR? Pick what fits the work.
Independent contractor
- You engage them directly using a simple services agreement, with no middle layer
- Paid against invoices for agreed work, at an agreed rate
- Lower cost, with no employer contributions or platform fees on top
- Start in days, and scale hours up or down as the work changes
- Flexible for them too, because they run their own business and keep more of what they earn
Great for: virtual assistants, admin, bookkeeping, marketing, design, customer support, research: the roles where you care about the output, not the clock.
Employer of Record
- A licensed local entity employs them on your behalf
- Payroll, tax and local benefits are handled for you
- No entity of your own needed in their country
- Full employment structure, including set hours and local protections
- Costs more, with employer contributions plus a monthly fee
Worth considering for: regulated industries, roles with access to highly sensitive systems, or where you genuinely need to direct someone's working day. We'll introduce you to vetted partners if it's the right fit.
Not sure? Ask yourself one question: am I buying an outcome, or am I directing someone's day? Buying an outcome points to contractor, and that covers the large majority of roles. Needing real control over hours and process points to EOR. If you're somewhere in the middle, tell us about the role and we'll give you a straight answer.
Setting It Up Well
Five habits that keep an offshore contractor arrangement clean and easy.
None of this is complicated, and none of it costs anything. It's simply what a good working relationship looks like when someone is running their own business rather than sitting on your payroll.
Agree the outcome
Write down what success looks like: the deliverables, the turnaround times, the standard. Agree the outcome you're paying for and let them decide how best to get there. Setting overlap hours for calls and collaboration is completely normal.
Let them invoice you
A short monthly invoice takes two minutes and keeps the arrangement clean. Pay on a set date, in an agreed currency, with fees accounted for. Predictable payment is the single biggest driver of offshore retention.
Put it in writing
A simple services agreement covering scope, rate, notice, confidentiality and IP ownership. That last one matters more than people expect, because contractor-created work often isn't yours without a written assignment. We provide general templates to get you started, and can point you to legal providers if you want one tailored.
Be clear on tools and access
Decide what systems they need and give them access to those, not everything. If you're providing software or a device, say so in the agreement. Our data privacy guide covers the practical side.
Revisit it as things grow
Roles change. Someone hired for a project two years ago may now be core to your operation. That's a good problem, and just worth a five-minute check that the structure still matches the reality. We'll flag it if we spot the drift.
And treat them well
Pay fairly for the market, give reasonable notice, and be honest about how long the work will last. It isn't a legal requirement. It's the reason good people stay, and it's how we expect our clients to work.
Common Questions
The things people actually ask.
Is a contractor arrangement risky?
Not when the working relationship genuinely is a contractor relationship. Businesses in every one of our markets engage overseas contractors as a matter of course. What creates problems is a mismatch: calling someone a contractor while running them like an employee, with set shifts and close supervision. Keep the substance and the label aligned and you're on solid ground.
Can we agree working hours?
Yes. Most clients agree a regular window with their team member so you overlap for calls and collaboration, and that is completely normal in a contractor arrangement. Settle the hours that suit you both up front and write them into the agreement.
Do I need a lawyer to hire someone?
For a standard contractor engagement, most businesses start from a general template rather than bespoke legal work, and we provide those. If you're in a regulated industry, handling sensitive data, or hiring at scale, it's worth having a professional review it, and we can point you to providers.
Who owns the work they produce?
You do, provided your agreement includes a written IP assignment. This is the one thing worth getting right on day one, because in many countries contractor-created work stays with the contractor by default. It's a single clause: easy to include, awkward to fix later.
Can we switch to EOR later?
Yes, and plenty of clients do as a role becomes more permanent or more sensitive. It's a straightforward change and we'll help you make it when the time comes.
What does SourceU handle, and what's on me?
We source, vet and present the talent, and we'll talk you through how other clients have structured similar roles. We provide general agreements and templates to get you started, so you're not building the paperwork from scratch. We're a recruiter rather than a law firm, so where you want a document tailored to your situation, or you need EOR or IT setup, we introduce you to trusted third-party providers.
Tell us about the role. We'll tell you what fits.
No jargon, no pressure. Just a straight answer on how to set it up, and the right people to fill it.
General information only, not legal or tax advice. Your obligations depend on your circumstances, where your business is based, and where you're hiring. We recommend confirming your arrangements with a qualified adviser.