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How to Build a Remote Tech Team in Latin America Without Opening a Legal Entity

As U.S. tech companies continue to face high hiring costs and fierce competition for talent, Latin America is emerging as a strategic destination for building remote software and IT teams. But how can you hire top developers in Mexico, Colombia, Brazil, or Argentina without navigating the complex and costly process of establishing a local legal entity?

This guide explains how to legally and efficiently build your remote tech team in Latin America using an Employer of Record (EOR) or outsourcing model—so you can scale fast and stay compliant.

Why Latin America?

Latin America offers a growing pool of tech talent with strong technical skills, cultural alignment with the U.S., and geographic proximity. Key benefits include:

  • Time zone compatibility: Most Latin American countries share similar work hours with U.S. teams.
  • Lower labor costs: Hiring in LATAM can reduce payroll and operational costs by up to 40–60%.
  • English proficiency: Many developers in countries like Mexico, Argentina, and Colombia have intermediate to advanced English skills.
  • Growing startup and tech ecosystem: LATAM cities like Mexico City, São Paulo, and Bogotá are investing heavily in tech infrastructure and education.

 

The Challenge: Local Compliance

To hire full-time employees legally in another country, most companies are required to:

  • Register a local entity.
  • Set up local payroll systems.
  • Pay employer social security and tax contributions.
  • Comply with local labor laws, contracts, and benefits regulations.

This process can take 3–12 months and involve legal, tax, and HR complexities—which is not ideal for companies looking to scale quickly.

The Solution: Hire Through an Employer of Record (EOR)

An Employer of Record (EOR) is a third-party organization that hires employees on your behalf in the country of residence. The EOR becomes the legal employer, managing compliance, payroll, taxes, and benefits, while you manage the day-to-day work of the employee.

With an EOR, you can:

  • Hire full-time developers in days, not months.
  • Avoid setting up a legal entity.
  • Ensure compliance with local labor laws.
  • Retain IP and confidentiality through solid contracts.
  • Scale up or down as your project needs evolve.

🧠 Learn more about how EORs work from Globalization Partners or Remote.

The Problem with Setting Up a Local Entity

Traditionally, to legally employ workers in a foreign country, companies had to establish a subsidiary or branch. This process is:

  • Expensive (legal fees, taxes, compliance costs)
  • Time-Consuming (can take 3–6 months or longer)
  • Complex (you must comply with local tax, labor, and social security laws)

For startups or project-based teams, this is often overkill.

The Alternative: Use an Employer of Record (EOR)

An Employer of Record (EOR) is a third-party service that acts as the legal employer of your remote workers in another country—while you retain full operational control.

With an EOR, you can:

  • Hire developers in Latin America within days
  • Avoid creating a legal entity
  • Comply with local labor laws
  • Handle payroll, taxes, benefits, and contracts through a trusted partner

This model lets you scale your tech team fast, without legal risks or hidden overhead.

What Roles Can You Outsource in Tech?

You can build fully remote teams with roles like:

  • Software Developers (Front-End, Back-End, Full Stack)
  • DevOps Engineers
  • QA/Testers
  • Data Scientists
  • Product Managers
  • UI/UX Designers
  • IT Support and SysAdmins

These professionals can work remotely or in hybrid hubs, depending on your preference.

What’s the Process Like?

Working with a reputable EOR partner typically involves the following steps:

  1. Define the Role and Salary Benchmark
    Determine job requirements, market rates in the target country, and preferred working hours.
  2. Recruit and Screen Candidates
    You can do this yourself or let the EOR support you with localized recruiting.
  3. Offer and Onboard Legally
    The EOR will issue a compliant local contract, manage tax withholdings, and register your new hire with social security.
  4. Payroll and HR Support
    The EOR handles monthly payroll, benefits, paid leave, terminations, and regulatory compliance.

Pro Tip: Choose Countries with EOR Infrastructure

Some of the best countries in Latin America with strong EOR presence include:

  • Mexico
  • Colombia
  • Argentina
  • Peru
  • Brazil
  • Chile

Each country has different labor laws, so working with a provider that understands regional nuances is critical.

Related Reading & Resources

Final Thoughts

Hiring tech talent from Latin America without a legal entity is no longer just a possibility—it’s a strategic advantage. By working with an EOR, you can tap into top-tier talent, save money, stay compliant, and move fast in a competitive market.

At Global Touch, we help U.S. companies build agile, remote tech teams across Latin America—without the hassle of setting up entities or navigating local labor laws alone.