London-based startups are hiring talent from Nairobi, Manila, and Buenos Aires - not because it’s trendy, but because it’s smarter. The city’s tech scene is bursting with innovation, but the local talent pool can’t keep up. Salaries for senior engineers in London now hit £90,000+. Meanwhile, a similarly skilled developer in Poland or Mexico might cost half that - and still deliver top-tier work. The real challenge? Keeping it legal.
Why London Startups Are Going Global
London has the funding, the networks, and the ambition. But it doesn’t have enough engineers willing to work for £70k when they can earn £85k in Berlin or £65k remotely from Bogotá. Startups like Revolut, Depop, and Monzo didn’t grow by hiring only from the M25. They scaled by building teams across 15+ countries.
One founder I spoke with - who runs a Series A SaaS startup in Shoreditch - hired his entire backend team remotely: two in Ukraine, one in Colombia, and one in Poland. He didn’t open an office abroad. He didn’t hire local contractors. He used a global employer of record (EOR) to legally employ them as full-time staff. His team now works across five time zones. His product launched six months faster than if he’d tried to hire locally.
Remote hiring isn’t about cutting costs alone. It’s about access. Need a UX designer who understands Latin American mobile users? Hire one in Lima. Looking for a compliance expert who’s lived through GDPR and Brazil’s LGPD? Find them in São Paulo. London’s startup scene isn’t shrinking - it’s expanding beyond its borders.
What Happens When You Ignore Compliance
Let’s be clear: hiring someone in Spain and paying them via PayPal isn’t a workaround. It’s a legal landmine.
In 2024, the UK’s HMRC fined a London fintech startup £187,000 for misclassifying a remote employee in Germany as a freelancer. The employee had been working full-time hours, using company equipment, and reporting to a London manager. HMRC ruled it was an employment relationship - and the company owed back taxes, National Insurance, and penalties.
Other risks? Violating local labor laws. In France, remote workers have the legal right to disconnect after hours. In the Netherlands, you must provide a work-from-home allowance. In Brazil, you’re required to pay a 13th salary and contribute to a mandatory severance fund (FGTS). Miss one of these, and you could face lawsuits, fines, or even criminal charges.
Some founders think, “I’ll just use a contractor.” But if you control their hours, give them tasks daily, or integrate them into your Slack team like a full-time employee - you’ve created an employment relationship under most countries’ laws. Contractors don’t get sick pay. They don’t get holiday entitlements. And if you treat them like employees, courts will treat them like employees.
How to Legally Hire Remote Workers from London
You have three real options. Two are risky. One works.
- Set up a legal entity abroad - This means registering a company in every country you hire in. Cost: £20,000-£50,000 per country. Time: 6-12 months. Only makes sense if you’re hiring 10+ people in one location.
- Use freelance platforms - Upwork, Fiverr, Toptal. Easy to start, but you can’t offer benefits, equity, or long-term stability. These workers aren’t employees. They’re gig workers. You’ll struggle to build culture or loyalty.
- Use a global Employer of Record (EOR) - This is what 80% of fast-growing London startups use now. Companies like Deel, Remote, and Oyster act as the legal employer. They handle payroll, taxes, benefits, and compliance in over 180 countries. You manage the work. They handle the law.
One startup founder switched from using freelancers to Deel last year. He hired 14 people across 9 countries in 3 months. His HR team didn’t grow. His legal team didn’t panic. His remote hires got pensions, health insurance, and paid parental leave - all compliant with local laws.
What You Actually Need to Pay
Let’s say you want to hire a senior software engineer in Romania. You think: “I’ll pay them €45,000. That’s cheaper than London.” But here’s what that really costs:
- Base salary: €45,000
- Employer social security (Romania): €10,200
- Statutory holidays (20 days): ~€3,000
- Health insurance (mandatory): €1,800
- Employer of Record fee (Deel/Remote): ~€3,000/year
- Total: ~£63,000
Compare that to hiring in London: £85,000+ salary, £15,000+ employer NI and pension, £10,000+ for office space and equipment. Suddenly, Romania isn’t just cheaper - it’s a better deal.
And you’re not just saving money. You’re gaining flexibility. If a team member in Indonesia needs to take three weeks off for family reasons? No problem. In London, that’s a HR headache. In Indonesia, it’s normal.
Building Culture Across Time Zones
Remote teams don’t die from lack of pay. They die from lack of connection.
One London AI startup holds weekly “Coffee Roulette” calls - randomly pairing team members for 20-minute chats. No agenda. Just talk. They also run monthly “Culture Days” where teams share food, music, or traditions from their home countries. One engineer from Lagos sent a video of her family preparing jollof rice. It got 37 likes on Slack. That’s the kind of moment that binds a team.
Don’t try to force a London culture onto a global team. Let them bring theirs. Celebrate Diwali, Eid, and Lunar New Year. Let people work when they’re most productive - whether that’s 6am in Mexico City or 10pm in Manila.
And be transparent. If you’re offering equity, say so. If you’re not offering health insurance in certain countries, explain why - and what you’re doing to fix it. Remote workers don’t need perks. They need trust.
Tools That Actually Work
You don’t need 12 apps to run a global team. Here’s what works:
- Deel or Remote - For payroll, compliance, and contracts
- Notion - Central hub for docs, onboarding, and processes
- Slack - Keep it light. Use threads. Avoid @here at 2am.
- Calendly - Let people book meetings in their local time
- Loom - Record quick video updates instead of holding endless Zoom calls
One founder told me he cut meeting time by 60% after switching to Loom for weekly updates. His team now has 12 hours a week back - time they use to learn, rest, or spend with family.
What’s Next for London Startups
The future isn’t hybrid. It’s global.
London will still be a hub - for investors, mentors, and events. But the teams? They’ll be everywhere. The next unicorn won’t be built by 30 people in a Shoreditch co-working space. It’ll be built by 120 people across 20 countries, all connected by shared goals, not shared addresses.
If you’re a founder in London thinking about hiring remotely - don’t wait for perfect compliance. Start now. Use an EOR. Document everything. Talk to your hires about their needs. Build trust before you build processes.
The rules are changing. The best startups aren’t waiting for them to settle. They’re writing the new ones.
Can I hire someone in the EU as a freelancer to avoid compliance?
No. If you direct their work, set their hours, or integrate them into your team like an employee, UK and EU labor authorities will classify them as an employee - not a freelancer. HMRC and EU tax agencies have cracked down hard on this. You risk fines, back taxes, and legal action. Use an Employer of Record instead.
Do I need to pay UK National Insurance for remote workers outside the UK?
No. UK National Insurance only applies if the employee is working in the UK or is a UK resident. If someone is based in India, Brazil, or Poland and works remotely from there, you pay their local social security taxes - not UK NI. An Employer of Record handles this automatically.
What’s the cheapest country to hire remote developers from?
Countries like Ukraine, Vietnam, and Colombia offer strong technical talent at lower total costs. But “cheapest” isn’t always best. Consider time zone overlap, language skills, and cultural fit. A developer in Poland might cost slightly more than one in the Philippines - but if you need real-time collaboration with your London team, Poland is the smarter choice.
Do remote employees get the same benefits as UK staff?
Legally, no - but ethically, you should aim for parity. UK employees get 28 days’ holiday, pensions, and sick pay. Remote workers get what’s required by their country’s law - which might be 20 days of vacation or no pension. Many London startups now offer a global benefits package: minimum 20 days off, mental health support, and learning stipends - regardless of location.
Can I hire someone in the UK on a remote contract if they live outside London?
Yes - and you should. Many London startups now hire across the UK - in Manchester, Bristol, or Glasgow - to reduce costs and access wider talent. These workers are UK employees, so you pay UK salary, NI, and pension. You don’t need an EOR. Just make sure your payroll system supports remote UK workers.