Hiring remote developers in Latin America can be one of the smartest moves for a U.S. company — faster access to talent, reduced costs, and better time zone alignment. But many founders and CTOs underestimate one thing: legal and compliance risk.
If you’re hiring international talent without a proper structure, you may be exposing your business to hidden liabilities — from tax exposure to IP ownership disputes. And in the long run, those risks can outweigh any initial savings.
Here’s what you need to know — and how to avoid costly mistakes.
The first big red flag is misclassification. Many companies hire LATAM developers as freelancers or independent contractors. It feels easier, faster, and cheaper. But in most countries, if someone works full-time under your direction, with fixed hours and long-term responsibilities, local labor laws may consider them an employee — even if you don’t.
That misclassification can come back to haunt you. You might be responsible for back taxes, benefits, penalties, or even lawsuits. And while it might feel like a small risk for a tiny startup, regulators are paying more attention than ever as remote work goes global.
Another issue is IP ownership. When you work with an international contractor, unless you have proper legal agreements in place, you may not fully own the code or product they create. In the U.S., it’s easy to assume “work for hire” applies — but many LATAM jurisdictions have different laws around intellectual property. Without the right documentation, your IP may not be protected the way you think it is.
Then there’s the issue of payments and compliance. Sending money directly via PayPal, Wise, or crypto might feel simple — but it can trigger problems on both sides. Inconsistent payments, lack of local tax reporting, and failure to meet legal standards can create liabilities for your company and stress for the developer. Worse, it makes retention harder — your engineer starts looking for a more stable employer who pays properly.
At Nefter, we’ve designed our model to eliminate all of this friction. When you hire through us, we contract locally with the developer, handle all legal requirements in their country, and issue proper monthly payments. You stay compliant, your team stays focused, and your engineers feel secure.
We also provide clear IP transfer agreements that ensure everything your team builds belongs fully to your company — no gray areas, no guesswork.
Nearshoring only works if it’s built on the right legal foundation. Cutting corners might save a few dollars in the short term, but it’s not worth the risk to your product, your reputation, or your future fundraising.
If you’re serious about building a distributed team in LATAM, do it the right way — with a partner that handles the hard stuff so you can focus on what matters.
At Nefter, we help U.S. companies hire vetted developers in LATAM, with full legal coverage, compliance, and peace of mind.
Let’s talk — and make sure your next hire is secure, compliant, and fully aligned!