Hiring shouldn’t stop at the border. Forward-thinking teams are expanding into Latin America, where skilled engineers, designers, and data pros work in the same time zones.
The numbers tell the story: 86% of small and mid-sized US businesses now hire internationally, and more than half do it to fill domestic skill gaps, according to 2025 data from Gusto. Nearshoring — building teams in countries like Mexico, Colombia, and Brazil — has quickly become the go-to strategy for growth-minded tech leaders. US demand for Latin American tech talent has surged, with nearly half of US companies planning to increase nearshoring through 2025.
The opportunity is clear. Compliance is where most companies get stuck.
The challenges of hiring internationally
Hiring in another country directly may seem straightforward, but it rarely is. Each Latin American market has its own labor laws, tax rules, and HR expectations. Missing even one detail can create problems.
Common compliance pitfalls include:
- Entity setup: Most countries require a local legal entity to hire full-time employees, a process that can take months and involve multiple layers of bureaucracy.
- Labor law & benefits: Every country has its own employment protections — like mandatory 13th-month salaries or healthcare contributions.
- Payroll & taxes: Employers must correctly withhold and remit taxes, social security, and pension payments. Errors can trigger fines or delays in paying staff.
- Worker classification: Labeling full-time workers as "contractors" may seem easier, but it risks misclassification penalties and back taxes.
- IP & data protection: Without airtight contracts governed by enforceable law, your code and customer data may lack full legal protection.
Even minor compliance issues can escalate into costly legal trouble. The result can be stalled projects, frustrated teams, and damaged reputations.
How US-based nearshoring partners simplify compliance
Partnering with a US-based nearshoring provider like Howdy.com eliminates these risks. Acting as the Employer of Record (EOR) in each country, Howdy manages the legal and administrative details so you can focus on building great teams.
Here’s how this model makes compliance effortless:
- Full legal employment: Your engineers in Bogotá or São Paulo are full-time employees of Howdy’s local entities, eliminating gray areas and misclassification risk.
- Built-in expertise: Howdy’s in-country HR and legal teams stay up to date on every regulation, from tax changes to new social contributions.
- Simplified payroll: You receive a single monthly USD invoice while Howdy handles local payroll, benefits, and compliance filings.
- IP protection under US law: Contracts secure your company’s IP rights under enforceable US or international law.
- Faster, lower-risk scaling: Because Howdy already operates across multiple Latin American markets, you can onboard compliant hires in days instead of months.
Global hiring doesn’t have to mean global risk. By working with a US-based nearshoring partner, companies can access top Latin American talent quickly, confidently, and compliantly.
At Howdy.com, we’ve helped US companies expand faster while keeping every hire fully compliant. By combining nearshore reach with local legal infrastructure, Howdy turns compliance from a burden into a strategic advantage. Book a demo to learn more.
FAQs about US-based nearshoring and compliance
What makes US-based nearshoring different from traditional outsourcing?
US-based nearshoring combines local accountability with Latin America’s talent advantages. Partners like Howdy handle hiring, payroll, and compliance through US-governed contracts so your team stays protected under familiar laws.
Why is compliance such a challenge when hiring internationally?
Every country has its own labor laws, tax codes, and HR requirements. Without local expertise, it’s easy to misclassify workers or miss filings, leading to fines or legal exposure. Howdy’s local entities and in-country legal teams eliminate that risk.
What is an Employer of Record (EOR), and how does it help?
An EOR is a trusted partner that legally employs your team members in another country. Howdy acts as the EOR for your nearshore hires, managing contracts, payroll, taxes, and benefits — so you can hire quickly without setting up foreign entities.
How does Howdy protect my company’s IP and data?
All Howdy contracts are governed by US or international law, ensuring that your intellectual property and data remain secure and enforceable. Our compliance framework includes strong confidentiality and data protection standards.