How to Hire Remote Workers in Latin America as a Foreign Company

Most foreign companies get hiring in Latin America backwards.

They show up thinking “cheap labor” and walk away confused when their “contractor” gets reclassified as an employee, their Mexican team disappears for a week during Holy Week, or their Brazilian developer stops responding because they felt micromanaged.

Here’s what actually works.

Step by Step Guide to Hiring Your First Latin American Remote Worker

Here’s how to do this right from day one.

Step 1 Decide Between Contractor or Employee Status

Full-time, long-term, core role that’s central to your business? Lean toward EOR or local employment.

Project-based, flexible, contractors can serve multiple clients? Independent contractor works. But make sure your contract actually reflects autonomy and scope.

Step 2 Choose the Right Job Boards and Platforms for Latin America

Post on region-specific platforms. Use LinkedIn for senior profiles. Check local Slack groups and Discord servers for niche roles.

or better yet and your best option, use a job platform dedicated to hiring in Latin America built. 

Step 3 Create a Hiring Process That Works for Different Time Zones

Request short intro videos or audio samples for client-facing roles. Use practical take-home exercises instead of obsessing over traditional CV formats.

Respect time zones when scheduling interviews. Don’t make candidates stay up until 11pm because your calendar is easier.

Step 4 Set Competitive Salaries for Latin American Remote Workers

Pay above local averages but below US salaries. Be explicit about pay in USD when possible. Many candidates prefer USD to protect against local currency devaluation.

Step 5 Set Clear Expectations About Work Culture and Communication

Explain how direct feedback works in your company. Tell people you expect questions and disagreements.

Document which holiday calendar is followed. 

Clarify how urgent work is handled during major local holidays. 

Don’t assume people will just work through Carnival because “it’s important.”

Set up clear team management from day one. 

Track hire dates, define whether pay is hourly or fixed, and establish invoice approval workflows early.

Understanding Legal Requirements When Hiring in Latin America

First question: contractor or employee?

This isn’t just paperwork semantics. Get it wrong and you’re looking at back taxes, penalties, and a legal mess that makes your lawyer rich and you poor.

How Contractor vs Employee Actually Works Down There

Here’s the simple version.

A real contractor decides how they work, uses their own tools, serves multiple clients, and gets paid for deliverables. You tell them what you need done, not how to do it or when to be online.

The second you start setting their hours, giving them a manager, making them use your company laptop, and treating them like core team members… They’re employees under local law. 

Mexico, Brazil, Argentina, Colombia, Chile. They all have explicit rules now. And they’re actively auditing.

What an Employer of Record Actually Does

If you want someone full-time, long-term, and fully integrated into your business, you probably need an EOR.

An Employer of Record hires the person on your behalf in their country. They handle payroll, taxes, social security, mandatory benefits. You direct the work, they handle the compliance.

But a dedicated job platform works just as fine without the higher fees.

Common Legal Mistakes When Hiring in Latin America

Mexico changed the game.

Their outsourcing reform means core business functions can’t be outsourced to contractors. If your “freelance” customer support team is actually running your entire support operation, that’s a problem.

Plus, all payments need digital tax invoices (CFDI 4.0). The tax authority uses these to detect fake contractors. They’re not messing around.

Argentina has the Monotributo system.

It’s a simplified tax regime for small independent contractors with income caps. Cross the threshold and your contractor gets bumped into a more complex tax situation.

The tax authority (AFIP) actively audits freelancers whose working conditions look like full employment.

Colombia requires social security contributions.

Even contractors need to be registered for PILA and pay into health and pension. The government mandates e-invoicing for professional services and cross-checks whether people are actually contributing. Long-term, single-client relationships get extra scrutiny.

Chile requires pension and health contributions too.

Law 21.133 says independent contractors issuing “boleta de honorarios” must contribute to AFP and Fonasa/Isapre. The tax authority (SII) sees all contractor income automatically. Recurring, dependent relationships get challenged.

The trend across Latin America: governments are tightening enforcement, standardizing e-invoicing, and sharing data to catch misclassification and tax evasion.

What works: written contracts with clear deliverables, proof of contractor autonomy, and periodic reviews as relationships evolve. Don’t just set it and forget it.

The Talent Quality Everyone Gets Wrong

Let’s clear something up.

Latin American remote workers aren’t “cheap because they’re less skilled.”

They’re affordable relative to the US cost of living. Big difference.

Education is Top Notch

University of São Paulo, UNAM in Mexico, Pontificia Universidad Católica de Chile, Universidad de los Andes in Colombia.

These schools consistently rank at the top in Latin America for engineering, tech, and business. Many are globally ranked in their fields.

Your “budget-friendly” developer might have a degree from a university that outranks plenty of US state schools.

English Fluency (Written and Oral)

Top LATAM hires often speak near-native English.

But screening is critical. Don’t just trust CV claims. Use live interviews, sample recordings, short writing tests. You need to verify communication skills for client-facing roles.

Demand for English-medium and international curricula (IB, US, UK systems) is high in major LATAM cities. Many professionals deliberately prepared for international work.

That said, English proficiency varies widely. Test it properly during hiring or you’ll regret it later.

Final Thoughts

Hiring in Latin America works when you respect three things:

Legal compliance. Know the difference between contractors and employees, structure relationships correctly, and stay compliant over time.

Cultural differences. Build relationships first, invite honest feedback explicitly, and understand communication styles.

Calendar realities. Respect local holidays, plan around major observances, and don’t treat your LATAM team like they’re on the same schedule as your US headquarters.

Get these right and you’ll access incredible talent at competitive rates with teams that actually stick around.

Get them wrong and you’ll burn through contractors, face legal issues, and wonder why “LATAM hiring didn’t work for us.”

The talent is there.

The question is whether you’re willing to meet them halfway.