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Thursday, October 1, 2026

Considerations for US Companies Hiring Abroad // Cooley // Global Law Firm - Cooley LLC

There are many reasons your business might consider hiring in or transferring current employees to a country where your company currently does not have a presence. Perhaps you are expanding into a new geographical market, have identified a talented individual you want to bring onboard, or have a key employee you want to retain who needs to move overseas.

Whatever the rationale, there are important employment-related issues that you need to consider each time you plan to hire in a new jurisdiction.

Permanent establishment risk

In short, you could create a corporate tax presence of the entity that you use to employ individuals within the jurisdiction they are working from. For example, if you use a company incorporated in the UK to employ an individual who lives and works in Germany, there may be a risk that you will create a taxable presence of the UK company in Germany as a result. Check the permanent establishment risk with your accountants or your tax counsel, who may advise that it would be better to incorporate a local subsidiary.

Immigration

You will need to check that employees have the legal right to live and work in the jurisdiction that they are working from.

Applicable law

Individuals are likely to benefit from the protection of the employment laws of the country that they are working from, such as mandatory minimum holiday time, benefits and termination rights. For that reason, you will need to establish a local law-compliant employment contract to ensure that...



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