A Brazilian company that wants to hire an American runs into a question most local guidance never covers, because most local guidance is written the other way around.
Nearly everything published about Brazil and foreign capital is about money coming in: the RDE-IED registration every foreign investor is warned about, the Central Bank filings, the rules for putting capital into a Brazilian company. Hiring an American is the reverse flow. You are sending money out and paying someone in the US, and those are two different things with two different rulebooks.
Sending capital abroad to build a US company is a regulated foreign-exchange event with a tax attached. Paying someone in the US for their work is not the same event, and it does not require a US company at all.
Which of those you are actually doing decides the cost, the timeline, and the paperwork. So it is worth separating them before you start.
The Câmbio Question: What Leaving Brazil With Capital Involves
If you incorporate and fund a US subsidiary, you are moving capital out of Brazil, and Brazil regulates that through the foreign-exchange market rather than a pre-approval regime.
Since the New Foreign Exchange Law (Lei 14.286, in force since 2022) consolidated the old rules, the process is lighter than it once was, but it is not free. Two things apply.
IOF on the exchange transaction. Converting reais to dollars to fund an overseas investment triggers IOF-Câmbio, Brazil's tax on foreign-exchange operations. The rate depends on the nature of the flow, and for investment-related outbound transfers it currently sits around 1.10%, while general outbound availability was raised to 3.50% in mid-2025. The exact rate depends on how the transfer is classified, which is a question for your câmbio bank and accountant before you move anything, because it changes the real cost of standing up a US entity.
The CBE declaration. Once your company holds assets abroad, including a US subsidiary, you fall under the Declaration of Brazilian Capital Abroad (CBE) filed with the Banco Central. The annual CBE is mandatory once your foreign assets reach USD 1,000,000, and it becomes quarterly at USD 100,000,000. Below the annual threshold, you may not need to file, but the obligation tracks the value of what you hold offshore, and penalties apply for late or missing declarations.
None of this applies when you pay an Employer of Record. Paying an EOR is a service payment for work performed, not an outbound capital investment, so it does not create a CBE obligation,n and it is not the same câmbio event as funding an entity. It carries the ordinary IOF treatment of a service remittance rather than the investment framework. For a company putting two or three people in the US to test the market, that difference is the whole decision. Confirm your specific position with your câmbio bank and a contador, since the IOF classification and the CBE thresholds have real conditions.
Employing the American: Three Routes
Using an Employer of Record
An Employer of Record is a US company that employs your hire on your behalf. It runs their payroll, withholds federal and state taxes, files with the IRS and the state, enrolls them in health coverage and benefits, and holds the legal employment relationship. Your team directs the work. On paper, the EOR is the employer.
You pay salary, employer-side taxes, and a per-employee fee. No US incorporation, no outbound capital investment, no CBE obligation, no state registrations in your name.
This fits a company hiring one to fifteen Americans that wants them working in days. It fits less well once twenty or more people sit in one state, and the US has become a permanent base, since the fee then starts to lose to your own entity.
The trade-off is that the EOR sits between you and the employment relationship. Contract changes, terminations, and unusual benefits requests route through them.
Setting Up Your Own US Entity
You incorporate, usually a Delaware LLC or C-corp, get an Employer Identification Number, open US banking, register as an employer in each state where someone lives, build payroll, and appoint a US accountant.
The US incorporation is fast and cheap, which is the part that misleads people. A Delaware LLC files in about a day, and the EIN is issued quickly for under $100. The cost sits in everything after: state-by-state registration, multi-state payroll, federal and state filings, and US benefits administration, running $5,000 to $40,000 all-in depending on how many states you touch. On the Brazil side, add the IOF on the capital you send and the CBE obligation once the entity exists.
Worth doing when the US is a committed long-term market and headcount in one state is heading past ten or fifteen. If you already run payroll in more than one country, the US mechanics will feel familiar, even if the câmbio side does not.
One thing to rule out early: a US PEO is not a substitute for an EOR here. A PEO works on co-employment and assumes you already own the US entity. With no US company, a PEO has nothing to work alongside. An EOR does the whole job.
Engaging a Contractor
A contractor arrangement is fast and cheap, and legitimate when the relationship genuinely is contracting: their own hours, their own equipment, other clients, invoices for deliverables, their own tax. You collect a Form W-9, pay invoices, and issue a 1099 at year-end.
It stops being legitimate when the person is a full-time employee in all but name: exclusive to you, on your schedule, on your systems, reporting to your manager. The IRS applies one test and states apply their own, with California's ABC test treating most full-time workers as employees, whatever the contract says. Misclassification brings back taxes, unpaid overtime, penalties, and the employer contributions you skipped.
Brazilian companies know misclassification risk well from the CLT side at home, where an informal arrangement can be recharacterized as employment. The US applies the same logic with different tests. A full-time role dressed as contracting is no safer there than it is in Brazil.
One Country, Fifty Rulebooks
US employment is regulated at the state level as well as the federal level, which surprises Brazilian companies used to a single national labor code, the CLT, that applies from Amazonas to Rio Grande do Sul.
The US does not work that way. Your engineer in Seattle sits under different tax, wage, and leave rules than your salesperson in Austin. A third hire in New York adds a third set of employer registrations, a third state tax regime, a third unemployment insurance account, and in some states a separate paid-family-leave contribution.
Incorporating does not fix this. A Delaware entity makes you a US employer; it does not register you in the states where your people live. You file in each one either way, so a US team that looks small on a headcount chart can carry a wide compliance footprint.
What a US Hire Costs
The federal employer burden is low, and for a Brazilian company the contrast is stark.
US employer-side FICA is 7.65% of wages, made up of 6.2% Social Security up to the annual wage cap and 1.45% Medicare, with federal unemployment adding a small amount per head. Set against Brazil's employer costs, where INSS contributions, FGTS at 8% of salary deposited monthly, the 13th salary, and various encargos can push the real cost of a CLT employee well above the headline wage, the US statutory burden is dramatically lighter.
The state layer is where US costs become unpredictable rather than high. Unemployment insurance carries a different rate and wage base in every state; several states add disability or paid-leave contributions, and workers' compensation is mandatory almost everywhere and priced by role and location.
Health insurance is the cost with no direct Brazilian public equivalent. There is no US national system funded by employer contributions the way SUS underpins healthcare in Brazil. American candidates in professional roles expect employer-sponsored medical cover as a baseline, and for a small team it can be one of the larger budget lines. An EOR provides group rates that a Brazilian company with three US employees could not secure alone.
If you use an EOR, add the fee. Ours is $579 per employee per month, flat, with no deposit and no pre-funding. Some providers hold a deposit worth a month of salary or charge a percentage of payroll, so ask for the full structure rather than the headline rate. It also helps to compare what a hire costs across countries before you fix where the role sits.
The Time Zone That Actually Works
Here is where Brazil has an advantage almost no other country in this position holds.
São Paulo runs one to two hours ahead of US Eastern time for most of the year, and the gap narrows or closes depending on daylight saving on both sides. That means a Brazilian company hiring on the US East Coast shares almost the entire working day with its American employee. A 9 am start in New York is a 10 or 11 am start in São Paulo. There is no night shift, no async-only workaround, no standing meeting that someone has to take at a punishing hour.
That single fact makes a US hire from Brazil operationally easier than the same hire from Asia, where the gap runs to twelve hours or more. Brazil shares this advantage with its neighbors: across Latin America, the short time-zone gap is the region's biggest edge in hiring US talent. From Brazil specifically, you mostly do not have to design around the clock at all.
The West Coast is a wider gap, four to five hours, but still workable within a normal day. Brazil's time zone is arguably its strongest reason to hire in the US rather than treat the two markets as separate operations.
What Surprises Brazilian Employers
At-will employment. Most US states let either side end the relationship at any time, with no statutory notice and no severance. After the CLT, where dismissal without cause triggers the FGTS penalty, notice, and a structured set of verbas rescisórias, this feels like an absence of rules rather than flexibility. Notice and severance in the US are things you write into a contract, not protections that apply by default.
No 13th salary, no FGTS, no férias framework. None of the Brazilian statutory structure carries over. There is no mandatory 13th salary, no FGTS deposit, and no 30-day vacation entitlement with the one-third bonus. Your statutory obligations are far lighter, which is a saving, but American candidates expect health coverage and often a 401(k) instead, so the money reappears as market-rate benefits.
Benefits are market-driven, not legislated. In Brazil, vale-refeição, vale-transporte, and plano de saúde are near-universal expectations shaped by law and convention. In the US, there is no equivalent statutory list. You offer what the market for that role expects, which for a professional hire means health insurance and retirement, and you build it into the offer rather than reading it off a table.
A US salesperson can create a tax question. If someone in the US is concluding contracts on your company's behalf, it can create a taxable presence there, separate from any employment matter. Raise it with your tax adviser before the first large deal, not after.
A Sequence That Works
Start on an EOR for the first hires. It avoids the outbound-capital route and the CBE obligation entirely, needs no incorporation, and puts someone on payroll in days. If the US market does not develop, you end a service agreement rather than unwinding a company and bringing capital back through the câmbio market.
Incorporate once the case is clear: one state past roughly ten people, revenue that justifies both the US compliance overhead and the IOF cost of funding the entity, and a firm decision that the US presence is permanent. Then run the entity for the concentrated team and keep scattered remote employees on the EOR, which is where most companies settle.
Use contractors only where the work is genuinely independent. A full-time role labeled as contracting costs more than it saves once a US state disagrees with the label.
If you are past the route decision and comparing providers, our breakdown of EOR providers operating in the United States covers pricing, onboarding speed, and compliance coverage across twelve platforms.
Frequently Asked Questions
Can a Brazilian Company Hire a US Employee Without a US Entity?
Yes. An Employer of Record employs the person through its own US entity and handles federal and state payroll, tax withholding, benefits, and compliance while your team directs the work. Incorporating is the alternative, and it takes longer, because funding the US entity means sending capital out of Brazil through the foreign-exchange market and taking on the CBE reporting obligation, which paying an EOR does not.
What Brazilian Rules Apply to Funding a US Subsidiary?
Sending capital abroad to fund a US entity is a foreign-exchange operation under the New Foreign Exchange Law (Lei 14.286). It triggers IOF-Câmbio on the conversion, at a rate that depends on how the transfer is classified, and once your company holds assets abroad, you fall under the annual Declaration of Brazilian Capital Abroad (CBE) with the Banco Central at the USD 1,000,000 threshold. Confirm the IOF rate and CBE position with your câmbio bank and accountant before committing.
Can We Pay a US Employee From Our Brazilian Payroll?
No. Someone working in the US is employed under US federal and state law, with US tax withholding, FICA, and US benefits. A Brazilian payroll system cannot produce a W-2 or remit to the IRS, and paying a full-time worker by invoice risks reclassification, back taxes, and penalties in whichever state they live in.
How Much Should We Budget Above Salary for a US Hire?
Employer-side FICA is 7.65%, plus state unemployment and workers' compensation, which vary by state. That is far lighter than Brazil's INSS, FGTS, 13th salary, and other encargos. Health insurance is the offsetting cost, since it is employer-funded in the US with no SUS equivalent and American candidates expect it. Add either an EOR fee or the setup and ongoing cost of a US entity, which starts around $5,000 and reaches $40,000 depending on state coverage.
Does the Time Difference Make a US Hire From Brazil Difficult?
No, and this is a genuine advantage. São Paulo sits one to two hours ahead of US Eastern time, so a Brazilian company shares almost a full working day with an East Coast hire. The West Coast is four to five hours behind but still workable. Brazil has one of the easiest time-zone fits of any country hiring into the US.
Does Our US Hire Need a Visa?
Not if they are a US citizen or already authorized to work in the US and are staying there. You are employing an American where they already live, so no immigration process applies. Sponsorship only arises if you relocate someone to the US, which is a separate exercise.