Hiring Employees in Brazil: A Simple Guide for Foreign Companies 

Hiring employees in Brazil gives international companies access to one of the world’s largest and most strategic talent markets. With a deep pool of skilled professionals and strong regional influence, Brazil often becomes a natural step for global expansion.

At the same time, Brazilian labor law, payroll structure, and compliance rules can feel complex for companies without a local presence.

This guide explains how hiring in Brazil works, the main options available to foreign companies, and how you can build a local team without opening a Brazilian legal entity.

Employment relationships in Brazil are regulated by the CLT (Consolidação das Leis do Trabalho), the Brazilian Labor Code. The CLT offers strong employee protections and sets clear rules for employers.

Key points to understand before hiring:

• Employment contracts must fully comply with Brazilian labor law
• Mandatory benefits are required by law and cannot be waived
• Payroll taxes and social charges significantly increase total employment cost
• Terminations follow strict legal procedures and timelines

Because of these rules, hiring without a proper local structure can create legal, financial, and reputational risk.

Brazilian labor law requires employers to provide a set of mandatory benefits designed to protect employees and ensure long-term financial security. These benefits apply to all employees hired under the CLT framework.

Core mandatory benefits

Paid vacation
Employees are entitled to 30 days of paid vacation per year, plus an additional one-third vacation bonus paid by the employer.

13th salary
An extra annual salary paid in two installments, usually in November and December.

Severance fund (FGTS)
Employers must deposit 8% of the employee’s monthly salary into a government-managed severance fund. Employees can access these funds under specific conditions, such as termination without cause.

When combined with payroll taxes and social charges, these obligations increase the real cost of employment and require careful payroll management to avoid penalties.

1. Openinga local entity

Opening a Brazilian entity allows full local operations, but it also involves:

• A lengthy and bureaucratic setup process

• Ongoing accounting, tax, and reporting obligations

• Local legal representation

• Higher fixed operational costs

This option is typically suitable for companies with long-term plans and larger teams in Brazil.

2. Hiringthrough an Employer of Record (EOR)

An Employer of Record (EOR) allows foreign companies to hire employees in Brazil without opening a local legal entity.

With an EOR:

• The employee is legally employed by the EOR

• Payroll, taxes, benefits, and compliance are managed locally

• Your company directs the employee’s daily work and performance

This model enables fast, compliant market entry with lower upfront risk.