How US companies hire contractors in Latin America: contractor vs EOR

You found the right hire in Colombia. Now, how do you actually pay them? Most US companies that hire contractors in Latin America choose one of two setups: a direct contractor agreement, often run through a platform, or an employer of record (EOR) that employs the person locally on your behalf. Contractors are cheaper and faster to set up; an EOR costs more but handles local employment for you.

This article explains both, what they cost, and how to decide. It is not legal or tax advice. Rules change by country, so confirm your setup with the provider you choose or a local adviser.

What is the difference between a contractor and an employer of record?

A contractor is an independent professional who invoices your company for services. You sign a services agreement, they send an invoice each month and you pay it. They handle their own taxes in their country.

An employer of record is a company that legally employs the person in their country and handles local payroll, taxes, benefits and employment contracts. Your company directs the day-to-day work and pays the EOR, which pays the employee.

How much does each option cost?

Platform pricing is public, so here are the starting prices at the time of writing. Check them again before you sign, because providers update their pricing.

• Deel lists contractor management starting at US$49 per contractor per month and EOR starting at US$599 per employee per month.
• Remote lists contractor management starting at US$29 per contractor per month and EOR starting at US$599 per employee per month.

On top of the platform fee, an EOR passes through the employer costs of the person's country, such as payroll taxes and mandatory benefits. Those vary a lot by country, so ask the provider for a full quote on the salary you plan to pay.

A contractor setup has no employer costs on your side. That is part of why it is the most common way to start.

How do you hire contractors in Latin America legally?

The basic steps are the same in most countries:

1. Sign a services agreement that describes the work, payment terms, intellectual property and confidentiality.
2. Collect the right tax form. A foreign individual who is not a US person typically gives you Form W-8BEN, which the IRS says is given to the payer if you are a foreign person. Keep it on file.
3. Agree on the currency and payment method. Many contractors prefer US dollars through a payment platform or international transfer.
4. Pay on invoice, on a fixed date each month.

A contractor platform such as Deel or Remote bundles the agreement templates, tax forms and payouts, which is why many companies use one even for a single hire.

When should you use an employer of record instead?

Classification is the main reason. In many countries, someone who works full time, on your schedule, only for you, with your equipment, can look more like an employee than an independent contractor. Local labor rules decide that, not your contract.

Consider an EOR when:

• The role is full time and long term, and the person works only for you.
• You want to offer local benefits like health insurance or paid leave in a compliant way.
• The candidate asks for employment, which is common for senior people who want local job security.
• Your company is growing a team in one country and wants consistent contracts.

Some platforms also offer a middle option. Deel, for example, lists a contractor of record service from US$325 a month, where the platform takes on more of the classification risk.

Which option do companies hiring paid media people usually pick?

In our experience, most US companies start with a contractor setup for their first hire in Latin America and move to an EOR if the role becomes a long-term, full-time position. That is a common pattern, not a rule.

What matters more is that the setup matches the role. A senior media buyer who works your full day for one account is a different arrangement from a freelancer who runs two campaigns a month.

If you are still comparing markets, start with what a senior performance marketer costs in the US vs Latin America. Hours matter too, and we cover them in the Latin America time zone overlap with US teams.

What should you settle before the offer?

Before you send an offer, agree on these with the candidate, in writing:

• Contract type: contractor or employee through an EOR.
• Currency and amount: a monthly figure in US dollars or local currency.
• Working hours: the shared window with your team.
• Equipment: who provides the laptop and software seats.
• Time off: how many days and how they are requested.
• Notice period: how either side ends the agreement.

Where does fitted. fit in?

fitted. runs the search. You hire the person directly, on whatever setup suits you, including a contractor platform or an EOR like Deel or Remote. We are not the employer and we do not take a cut of the salary.

During the search we confirm each candidate's expected contract type, salary and hours, so the offer stage has no surprises. Our fee is US$3,750 flat per hire: US$750 to start and US$3,000 when your hire accepts.