If you hire a new employee at your company, you are responsible to pay taxes and social security benefits for them. This includes rates for health insurance, retirement payments, or unemployment insurance as well as income tax payments for your employees.
Now, if your newly hired worker lives and works in a different country than your business location, it quickly becomes more complicated, because your duty to pay taxes and social security benefits doesn’t stop at the border. You rather have to make these payments in your employee’s country of residence and this in turn is often only possible if you own a legal entity in the respective country.
In short, if you want to legally hire someone in a different country, you must have a legal entity there, which not only costs you a heap of money but also requires a lot of time and effort.
But that doesn’t mean that you cannot hire global talent for your business!