[sratner]

Another option for hiring outside U.S. without a local entity is to involve a global payroll provider for a reasonable fee (we have used Papaya Global, and Rippling does it now as well for certain countries).

A global payroll provider effectively acts as the "local employer" (they have a local entity in each country) and contracts out the employee to your company, so while the employment contract is with the provider, you can still sign all sorts of side-letter contracts like NDAs, IP assignments, stock grants etc without issue.

Pros are that unlike a contractor, the employee is subject to local labour laws and protections. Cons are that the employee is subject to local labour laws and protections (and the employer is subject to local labour taxes, which the payroll provider will pass through to you).

In certain countries with employee-favourable labour laws, we found it easier to attract employees this way, as they may be unwilling to forego the protections and social security / pension payments they would normally get as an employee.

[Edit: but beware of the double edge of course - if you ever want to fire such an employee, you may run up against said strong labour laws.]