Two questions that reach us almost word for word: a company with twenty engineers wants to add a squad abroad without opening a subsidiary this year, or wants two engineers in Poland and one in Brazil and has entities nowhere. The good news is that the entity is not actually required. The useful part is knowing which of the three routes fits, because they fail in different places.
Route one: contract the engineer's own company
In much of the world senior engineers already operate through their own company, which means you can sign a service contract with that company and pay its invoices. In Brazil this is the default at the senior end and has a name, PJ. In Poland it is a B2B contract. Mexico, Argentina and Portugal all have their version.
What it costs: only the engineer's rate, plus whatever your accountant charges to handle a foreign service invoice. No platform fee, no margin.
Where it fails: you do all the finding and all the screening, in a market you do not know, and you carry the classification question yourself. A full-time person working your hours under your direction, invoicing you monthly and nobody else, is the fact pattern that local labour courts examine — in Brazil the contract clauses that feed it are worth reading carefully before you sign. It is a real risk rather than a theoretical one, and it lands on whoever is closest to the relationship.
Route two: an employer of record
An employer of record legally employs the person in their country on your behalf and handles payroll, taxes and local compliance. You pick the person; the EOR makes them an employee of its local entity and bills you.
What it costs: the salary plus local employer charges plus a per-person platform fee, which at the time of writing is commonly in the hundreds of dollars a month per head.
Where it fails: an EOR does not find anyone for you. It is payroll infrastructure, not a recruiting partner, and it has no obligation to replace someone who does not work out. If you already know who you want to employ and the only obstacle is the entity, it is the cleanest answer available. If you do not know who you want yet, you have solved the second problem and left the first one untouched.
Route three: buy the engineers through a supplier
The supplier already contracts or employs the engineers and sells you their time as a service. You receive one invoice for services, the same as for any other vendor, and your accountant treats it as an expense rather than payroll.
What it costs: a margin over what the engineer is paid. Anyone claiming otherwise is hiding where their money comes from. In exchange you get the sourcing, the screening, a replacement obligation when someone is not a fit, and the classification relationship sitting on the supplier's side of the table rather than yours.
Where it fails: you are trusting someone else's screening, so the quality of the supplier is the quality of the outcome. Ask how many people they screened for the profile you described, what they rejected and why, and ask to see the chain of IP assignment in both links — engineer to supplier, supplier to you. A supplier who can only show the second link is selling you a gap.
How to pick in one pass
The three questions that decide it, in order:
- Do you already know who you want to hire? If yes, route one or two. If no, route three, or you are about to spend a quarter learning a foreign hiring market.
- Who should carry the classification risk? If the answer is "not us", that rules out contracting individuals directly for full-time ongoing work.
- Is this a team you are committing to, or an experiment? An experiment should never start with an entity. A committed team of ten or more in one country eventually should.
One trap worth naming: mixing routes by accident. Companies often start with a direct contract because it is cheapest, grow it to four people on fixed hours with company laptops and daily standups, and end up with four relationships that look like employment in a country where they have no entity and no local counsel. If headcount in one country is going up, revisit the structure on purpose rather than discovering it later.
How the money actually moves
Worth deciding before the first payment rather than after. A direct contract means an international transfer to a foreign company account, which carries a wire fee on each side and an exchange spread that is rarely the rate you looked up — agree in writing who absorbs both, because the gap is real money on a monthly payment and the argument always happens in month two. An employer of record debits you in your own currency and handles the local leg, which is convenient and is part of what the per-head fee buys. A supplier invoices you in one currency for a service, which is the simplest line in your accounting and the easiest for your accountant to classify, because it is the same shape as every other vendor invoice you already pay.
In all three cases, ask who holds the engineer’s equipment and accounts. A laptop you bought and shipped to another country is an asset in a jurisdiction where you have no entity, and it is also one more fact that makes a relationship look like employment.
What none of the three fixes
Time zones. If the people you add work while your team sleeps, every decision costs a day, and no contracting structure changes that. It is the reason the country matters as much as the route — and why it is worth looking at what a senior costs in each one, with the overlap next to the price, before you decide where to look at all. Two countries on that table are cheaper than the one we sell, and the page says so.
This is general information rather than legal or tax advice. Both the classification question and the invoice treatment depend on your country as much as theirs, so have your own counsel and your own accountant read whichever route you choose before the first payment goes out.