What is the difference between an EOR and setting up my own entity?

An EOR legally employs your people, runs payroll and carries the local-employer obligations, so you hire in weeks with no entity. Your own entity makes you the direct employer with full control of contracts, benefits, IP and data, but you carry incorporation cost and ongoing accounting, payroll and compliance. EOR favours speed and low headcount; your own entity favours control and high headcount.

At what headcount does my own entity become cheaper than an EOR?

It depends on the country. An EOR is a per-employee fee; your own entity is a largely fixed cost. The crossover is where the cumulative per-seat fee passes that fixed cost, and it varies widely by country, so it is best modelled per country rather than guessed. Teamed models it against your real salary mix and the crossover calculator gives a quick first read.

How long does each option take before I can hire?

An EOR can hire in weeks because the entity already exists. Your own entity typically takes months: incorporation, registrations, banking and often a local director before you can pay anyone. If you need someone working soon, EOR is the route, with the option to move to your own entity later.

Who carries the legal risk under each model?

Under an EOR the provider is the legal employer and carries the local-employer obligations while you direct the work. With your own entity you carry every obligation directly. Neither removes local law; the difference is who holds it. The exact EOR allocation sits in the MSA. Teamed does not provide legal services and this is not legal advice.

Can I move from an EOR to my own entity later?

Yes. EOR is a stage, not the destination. Teamed models the crossover per country and flags when your own entity wins. GEMO then sets up and runs your own entity in 90+ countries on the same system, migrating people with no re-onboarding. Because Teamed earns either way, the advice is not tied to keeping you on EOR.

Is there a deposit to start an EOR with Teamed?

Yes, a refundable deposit equal to one month of salary starts an EOR engagement, which is standard for the model. There are no onboarding or offboarding fees, though leaving within the first three months may incur a fee set out in the contract. The flat EOR fee is $599 USD or £479 GBP per employee per month, FX absorbed at zero markup.

EOR vs Own Entity

EOR vs your own entity, an honest build-vs-buy guide

It is a build-vs-buy decision, not a right-or-wrong one. An Employer of Record (EOR) is the buy option: you hire in weeks with no entity, and the EOR is the legal employer that carries the local obligations. Your own legal entity is the build option: full control, but setup time and cost plus ongoing accounting, payroll and compliance that you carry. The deciding factor is headcount per country. Below the crossover point, EOR usually wins on speed, cost and risk. Above it, your own entity wins. Teamed models that crossover honestly and, when your own entity becomes the better structure, can set it up and keep running it for you in 90+ countries.

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Hire through an EOR in weeks with no entity, versus months to incorporate and register your own.: 90+
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Last reviewed 18 June 2026By Tom Price-Daniel, Co-founder, Teamed

EOR vs your own entity, which way should you hire in a new country?

At a glance

EOR

EOR delivered by Teamed, rated 4.8 on G2

Best for: testing a market, hiring one to a handful of people in a country, or needing someone on the ground in weeks without taking on a legal entity, local payroll or the obligations of an in-country employer.

Own Entity

Own entity built and run by Teamed via GEMO

Best for: a large, stable, permanent headcount in one country where you want full control of contracts, benefits, IP and data residency, and the per-seat EOR fee has grown past the fixed cost of running your own entity.

Shared by both: compliant local employment · local payroll and statutory contributions · a path between the two as you scale

Where it matters	Who leads	Why
Time to your first hire	EOR	EOR puts a compliant hire on the ground in weeks. Incorporating and registering your own entity typically takes months before you can pay anyone.
Cost at low headcount in a country	EOR	A per-employee EOR fee beats the fixed cost of incorporation, local accounting and filings when you have only a few people in that country.
Cost at large, stable headcount in one country	Own Entity	Once you have many permanent employees in one country, the cumulative per-seat fee passes the fixed cost of running your own entity.
Who carries the local-employer obligations	EOR	With an EOR, the provider is the legal employer and carries the in-country obligations. With your own entity, you carry them in full.
Control of contracts, benefits, IP and data	Own Entity	Your own entity gives you direct control of employment terms, benefits design, IP assignment and data residency in that country.
Ongoing admin burden	EOR	EOR absorbs local payroll, statutory filings and compliance. Your own entity means ongoing accounting, payroll, filings and a local director where required.
Speed and ease of exit	EOR	Leaving an EOR is mostly notice and a clean cutover. Winding down your own entity is a formal deregistration that takes time and cost.
Permanence and local presence	Own Entity	Your own entity signals long-term commitment to a market and supports a registered office, local banking and a permanent footprint.

EOR on G2

Who EOR is for

This guide is for fast-growing companies with an international footprint who are weighing how to hire in a new country: through an EOR, or by setting up their own legal entity. If you want the honest crossover maths rather than a one-sided pitch, and a partner who can run either side and move you between them as you scale, this is your fit.

Not the right fit if

Already certain your own entity is the answer?. Skip the crossover modelling and go straight to entity setup. Teamed can build and run your own entity via GEMO in 90+ countries, or you can use a local incorporation specialist directly.

Find your pick in 20 seconds

If you are…	Start with	Why
Testing a market or hiring a handful of people in a country	EOR	Compliant hire in weeks, no entity, the obligations carried for you.
Large, stable, permanent headcount in one country	Your own entity	Past the crossover, the fixed entity cost beats the cumulative per-seat fee, with full control.
Growing across several countries, not sure where the line is	EOR now, model the crossover per country	Stay flexible while headcount is small, and flip the countries that cross the line.
Want one partner who can run EOR and your own entity	Teamed	Honest crossover modelling plus GEMO to build and run your own entity in 90+ countries.

What is EOR vs your own entity?

An Employer of Record (EOR) legally employs your people in a country through its own entity or a vetted local partner. It issues the contract, runs payroll, remits income tax and statutory contributions, and carries the obligations of the local employer while you direct the day-to-day work. This is the buy option: you hire compliantly in a market in weeks, before you have a legal entity there, and someone else holds the in-country employer risk.

Setting up your own legal entity is the build option. You incorporate and register a company in the country, become the direct legal employer, and gain full control of employment terms, benefits, IP assignment and data residency. In exchange you take on incorporation time and cost, and the ongoing work of local accounting, payroll, statutory filings and a local director where the law requires one. The obligations that an EOR would carry now sit with you.

The decision turns on headcount per country, not on which model is better in the abstract. At a low headcount in a country, the per-employee EOR fee is usually smaller than the fixed cost of running your own entity, the speed is far higher, and the risk is carried for you. As permanent headcount in that one country grows, the cumulative per-seat fee approaches the fixed entity cost, and the control of your own entity starts to pay for itself. That tipping point is the crossover, and because it is country-specific it is best modelled per country. The honest move is to start where the maths and the stage point today, and revisit as you scale.

Speed, how fast can you actually hire?

The first question is how soon you need someone on the ground. An EOR can put a compliant hire in place in weeks: the contract, payroll and statutory registrations run on an entity that already exists. Setting up your own entity means incorporation, tax and payroll registration, local banking and often a resident director, which typically runs to months before you can pay your first employee. If speed matters, EOR wins this one outright.

Detail	EOR	Own Entity
Time to first compliant hire	Weeks. The employing entity already exists, so onboarding starts almost immediately.	Months. Incorporation, registrations and local banking must complete before you can pay anyone.
Setup work you do	Sign the agreement and provide the hire details. The provider handles the local mechanics.	Incorporate, register for tax and payroll, open local banking, appoint a director where required.
Good fit when	Testing a market or hiring a small number of people quickly.	You can plan months ahead and want a permanent registered presence.

A practical read

If you have found the person and want them working next month, an EOR is the only option that gets there. You can always move to your own entity later, once headcount and certainty justify it.

The crossover economics, where buying beats building

This is the heart of the decision. An EOR charges a per-employee fee. Your own entity carries a largely fixed cost: incorporation, local accounting, payroll administration and annual filings, roughly the same whether you employ three people or thirty in that country. At low headcount the per-seat fee is cheaper. As permanent headcount in one country grows, the cumulative fee climbs towards, then past, the fixed entity cost. That tipping point is the crossover. Because it depends on local salaries, statutory costs and incorporation expense, it is country-specific and should be modelled per country.

Detail	EOR	Own Entity
Cost shape	Per-employee fee. Scales linearly with headcount in the country.	Largely fixed cost of incorporation, accounting, payroll and filings, broadly flat across headcount.
Cheaper at low headcount	Yes. A few seats cost less than running a whole entity.	No. The fixed cost is hard to justify for one or two people.
Cheaper at high headcount in one country	No. The cumulative per-seat fee overtakes the fixed entity cost.	Yes. Past the crossover, the entity is the better unit economics.

Model it, do not guess it

The crossover varies widely by country, so a rule of thumb will mislead you. Teamed models it per country against your real salary mix and local costs, and the crossover calculator gives you a first read in a couple of minutes.

Open the crossover calculator

Risk and obligations, who is on the hook?

Under an EOR, the provider is the legal employer in-country and carries the obligations of that role: compliant contracts, payroll, statutory contributions, terminations within local law. You direct the work; the provider holds the local-employer risk. With your own entity, those obligations sit with you in full, from employment law and payroll accuracy to permanent-establishment and director duties. Neither model removes local law. The difference is who carries it day to day. Teamed does not provide legal services and this is not legal advice; the exact allocation under any EOR sits in the Master Services Agreement.

Detail	EOR	Own Entity
Legal employer	The EOR provider is the legal employer in-country and carries the local-employer obligations.	Your own entity is the direct employer; you carry every local-employer obligation.
Compliance work	Contracts, payroll, statutory filings and terminations handled within local law by the provider.	You run compliance in-house or with local advisers, and own the outcome.
Permanent-establishment exposure	The provider employs locally, reducing the entity-creation question for you.	You hold a registered entity and the director and tax duties that come with it.

The honest limit

No EOR removes local employment law, and no entity makes it simpler, it just moves where the obligation sits. With an EOR, Teamed coordinates a contested case with real HR and legal experts and local counsel. With your own entity, that responsibility is yours. Teamed does not provide legal services and this is not legal advice.

Control, contracts, benefits, IP and data

This is where your own entity earns its keep. As the direct employer you control employment terms, benefits design, equity and IP assignment, and where employee and payroll data sit. Under an EOR you get compliant local contracts and competitive benefits, but within the provider framework rather than fully bespoke to you. For most companies at small headcount that framework is an advantage, less to build and maintain. For a large, permanent team in one country, the control of your own entity is often worth the overhead.

Detail	EOR	Own Entity
Contracts and terms	Compliant local contracts issued by the provider, within its framework.	Fully bespoke employment terms you design and own.
IP and equity	Handled per country with legal support; assignment runs through the provider structure.	Direct assignment to your own entity, with equity schemes you administer.
Data residency	Configurable, but data sits within the provider environment.	Full control of where employee and payroll data resides.

Why control follows scale

A handful of hires rarely need bespoke contracts or in-house data residency. A large, permanent local team often does, which is one reason control and the crossover economics tend to point the same way: towards your own entity.

Exit, how easily can you change your mind?

Optionality cuts both ways. Leaving an EOR is mostly a notice period and a clean cutover, so it suits a market you are still testing. Winding down your own entity is a formal deregistration: final filings, employee transfers or terminations, closing local banking and tax accounts, which takes time and cost. The flip side is that an EOR keeps you flexible while your own entity commits you. Match the model to how certain you are about the market.

Detail	EOR	Own Entity
Leaving the model	Notice period and a managed cutover. Most EOR contracts are month-to-month or 30 to 90-day notice.	Formal deregistration, final filings, account closures and employee transfers.
Suits	Markets you are testing or where headcount may not last.	Markets you are committed to for the long term.
Reversibility	High. Easy to scale up, down or out.	Low. Setting up and winding down are both deliberate projects.

Keep optionality while it is cheap

When you are unsure a market will last, the flexibility of an EOR is worth a lot. You can commit to your own entity once the headcount and the certainty are both there.

The path between them, a route off EOR, not just onto it

Most EOR providers earn only while you stay on EOR, so they have little reason to tell you when your own entity becomes the better structure. Teamed is built the other way. It models the crossover per country and flags the month your own entity wins. When that point arrives, Global Entity & Employment Operations (GEMO) sets up your own entity in 90+ countries and keeps running the employment operations on the same system, migrating your people with no re-onboarding. Because Teamed earns either way, on EOR or by running your entity, the advice is not tied to keeping you on EOR.

Detail	EOR	Own Entity
Crossover modelling	Teamed flags, per country, the month your own entity becomes the better structure.	You confirm the move when the maths and your plans line up.
Building your own entity	Stay on EOR until the crossover, with no pressure to move early.	GEMO incorporates and registers your own entity in 90+ countries.
Migration	Employees stay employed throughout the transition.	People move to your entity on the same system, with no re-onboarding.

A path off EOR, not just onto it

The useful question is not only how you start, but whether your provider will help you leave EOR for your own entity when that is right, and keep running it for you. Teamed does both, which is rare in the category.

See how Teamed compares to Deel

Why the comparison matters

Behind every line item is a real person, in a real place.

The fee, the FX and the support model are not abstractions. They decide whether the person you hired in Barcelona or Rome is paid right, on time, by someone who knows their employment law. That is the comparison worth running.

What each stakeholder evaluates

Criterion	Legal	Finance	People Ops	Security
Cost at your current headcount	Confirm the legal-employer status under each model before signing. Under an EOR the provider is the in-country employer; with your own entity you take on every employer duty directly.	Model the crossover per country: the per-employee EOR fee against the fixed cost of incorporation, local accounting, payroll and filings. Below the crossover, EOR is usually cheaper; above it, your own entity wins.	At low headcount, an EOR removes the local payroll and benefits build. At high headcount, your own entity lets you design benefits and terms in full.	Under an EOR, data sits in the provider environment with configurable residency. Your own entity gives you full control of where employee and payroll data resides.
Speed and certainty about the market	An EOR lets you hire compliantly in weeks without an entity. If you are unsure the market will last, that reversibility limits your wind-down exposure.	Incorporation is a months-long, largely fixed investment. If headcount is uncertain, the per-seat EOR fee keeps the cost variable and avoids stranded entity costs.	EOR gets people working fast. Your own entity is worth the wait only when you are committed to a permanent local team.	A managed EOR cutover is simpler to reverse than deregistering an entity, so an EOR keeps optionality while you validate the market.
The path off EOR when your own entity wins	Ask whether the provider will tell you when your own entity becomes the better structure, and whether it can incorporate and run it without re-onboarding your people. EOR is a stage, not the destination.	Teamed models the crossover and flags it proactively. Because Teamed can keep running your own entity, its advice is not tied to keeping you on EOR. A provider that earns only on EOR has the opposite incentive.	A managed transition via Global Entity & Employment Operations (GEMO) keeps employees on their contracts and history. No re-onboarding, no gap in coverage.	Your own entity gives you full control over data residency and employment contracts in that country. GEMO sets it up in 90+ countries on the same system you already use.

How to decide between EOR and your own entity

The decision is a sequence, not a coin toss. Work through it in order and the answer for each country usually falls out of the maths and the stage you are at.

Step 1
Count the headcount per country
List how many people you plan to employ in each country, and how permanent that headcount is. The decision is per country, so do not average across your whole footprint.
Step 2
Model the crossover
For each country, compare the cumulative per-employee EOR fee against the fixed cost of running your own entity: incorporation, accounting, payroll and filings. The crossover calculator gives a first read in a couple of minutes.
Step 3
Weigh speed, control and exit
Factor in how fast you need to hire, how much control you need over contracts, benefits, IP and data, and how certain you are about the market. Speed and reversibility favour EOR; control and permanence favour your own entity.
Step 4
Start where the stage points, and revisit
Begin with whichever model the maths and the stage support today, usually EOR while headcount is small. Teamed flags the month a country crosses the line, and GEMO can build and run your own entity when it does.

Dyke Yaxley · UK chartered accountancy

100% audit capacity added. Zero entity setup.

Audit capacity in 2024: +100%
Compliance issues across the engagement: 0
South Africa hires, both retained: 2
Entity setup required: None

Challenge

Dyke Yaxley, a UK chartered accountancy with over a century of history, was turning down audit work in 2024. Local UK talent supply for qualified auditors had not kept pace with client demand. Cross-border hiring felt too legally complex for a firm whose brand sits on compliance discipline, and setting up a South African entity for a first couple of hires made no economic sense.

Approach

Dyke Yaxley partnered with Teamed to hire two qualified audit professionals in South Africa via EOR rather than incorporating an entity. Teamed handled the South African employment-law side end-to-end: compliant contract, local payroll, statutory tax obligations, and onboarding logistics. No entity setup, no South African legal counsel on retainer, no permanent-establishment exposure, and no fixed entity cost to carry for two people.

Result

Both hires exceeded expectations on technical work, client satisfaction, and cultural fit. Audit capacity doubled in 2024. Zero compliance issues across the engagement. Because headcount in South Africa sat well below any entity crossover, EOR was clearly the right structure, and the firm kept the option to revisit if the team there grows.

Read the full case study →

Interactive tool

Model your crossover point per country

Enter your headcount and salary mix per country. The crossover calculator shows where the cumulative EOR fee passes the fixed cost of running your own entity, so you can see which countries are still firmly EOR and which are approaching the line.

Open the crossover calculator

Decision checklist

Choose an EOR when you want a compliant hire in weeks, have a low headcount in the country, and want someone else to carry the local-employer obligations while you direct the work.
Choose your own entity when you have a large, stable, permanent headcount in one country, want full control of contracts, benefits, IP and data, and the cumulative per-seat fee has passed the fixed entity cost.
Decide per country, not across your whole footprint. The same company can rightly run EOR in one market and its own entity in another.
Model the crossover against your real salary mix and local costs rather than a rule of thumb, because the tipping point varies widely by country.
Pick a partner who will tell you when your own entity wins and can build and run it for you. Teamed models the crossover and, via GEMO, sets up and runs your own entity in 90+ countries with no re-onboarding.

Email this to legal

Honest take

When your own entity is the better choice

Choose your own entity when you have a large, stable, permanent headcount in one country and the cumulative per-employee EOR fee has clearly passed the fixed cost of incorporation, accounting, payroll and filings there.
Choose your own entity when you need full, bespoke control of employment terms, benefits design, IP assignment or data residency that a provider framework cannot give you.
Choose your own entity when a permanent registered presence in the market matters for the brand, local banking or long-term commitment, and you are confident you will stay.

EOR is a stage, not the destination. When your own entity is genuinely the better structure, we say so, and Teamed can still be the partner that builds and runs it for you via GEMO in 90+ countries. A path off EOR, not just onto it.

Questions to ask any EOR before you sign

1At what headcount in this specific country does my own entity become cheaper than the per-employee EOR fee?
2How long until my first compliant hire under each option, weeks via EOR or months to incorporate?
3Under an EOR, who is the legal employer and who carries the local-employer obligations?
4If I set up my own entity, what is the ongoing burden: accounting, payroll, filings, a local director?
5Will my provider tell me proactively when my own entity becomes the better structure, or only when I ask?
6Can the same partner set up and keep running my own entity, and migrate my people without re-onboarding?
7What are the exit terms each way, EOR notice versus winding down a registered entity?
8Is there a deposit or pre-funding requirement to start an EOR engagement, and is it refundable?
9How is IP assignment and equity handled under an EOR versus under my own entity?
10Where does employee and payroll data sit under each model, and can I control data residency?

Frequently asked questions

What is the difference between an EOR and setting up my own entity?
An Employer of Record (EOR) is the buy option: it legally employs your people through its own entity or a vetted local partner, runs payroll and statutory contributions, and carries the local-employer obligations while you direct the work, so you can hire in weeks with no entity. Setting up your own entity is the build option: you incorporate and register a company, become the direct legal employer with full control of contracts, benefits, IP and data, and you carry the incorporation cost plus ongoing accounting, payroll and compliance. EOR trades some control for speed and lower risk at low headcount; your own entity trades speed and simplicity for control and better unit economics at high headcount.
At what headcount does my own entity become cheaper than an EOR?
There is no single number, because it depends on the country. An EOR charges a per-employee fee that scales with headcount, while your own entity carries a largely fixed cost of incorporation, accounting, payroll and filings. The crossover is the headcount where the cumulative per-seat fee passes that fixed cost. It varies widely with local salaries, statutory costs and incorporation expense, so it should be modelled per country rather than estimated with a rule of thumb. Teamed models the crossover per country against your real salary mix, and the crossover calculator gives a first read in a couple of minutes.
How long does each option take before I can hire?
An EOR can put a compliant hire on the ground in weeks, because the employing entity already exists and onboarding starts almost immediately. Setting up your own entity typically takes months: incorporation, tax and payroll registration, local banking and often a resident director must all complete before you can pay your first employee. If you need someone working soon, an EOR is the only option that gets there, and you can move to your own entity later once headcount and certainty justify it.
Who carries the legal risk under each model?
Under an EOR, the provider is the legal employer in-country and carries the obligations of that role, from compliant contracts and payroll to statutory contributions and terminations within local law, while you direct the work. With your own entity, those obligations sit with you in full, including employment law, payroll accuracy, permanent-establishment and director duties. Neither model removes local employment law; the difference is who carries it day to day. The exact allocation under any EOR sits in the Master Services Agreement, and Teamed does not provide legal services, so this is not legal advice.
Can I move from an EOR to my own entity later?
Yes, and a good provider helps you do it. EOR is a stage, not the destination. Teamed models the crossover per country and flags the month your own entity becomes the better structure. When that point arrives, Global Entity & Employment Operations (GEMO) sets up your own entity in 90+ countries and keeps running the employment operations on the same system, migrating your people with no re-onboarding. Because Teamed earns either way, on EOR or by running your entity, the advice is not tied to keeping you on EOR, which is unusual in the category.
Is there a deposit to start an EOR with Teamed?
Yes. A refundable deposit equal to one month of salary is required to start an EOR engagement. This is standard for the EOR model rather than a Teamed-specific surcharge, and it is refundable. Teamed charges no onboarding or offboarding fees, though leaving within the first three months may incur a fee that is set out in the contract. The headline EOR fee is $599 USD or £479 GBP per employee per month, flat, with FX absorbed at zero markup on the fee.

Common questions

Should I use an EOR or set up my own entity to hire in a new country?
It depends on headcount, speed and how committed you are to the market. Use an EOR when you want a compliant hire in weeks, have a low headcount in the country, and want someone else to carry the local-employer obligations: it is faster, cheaper at small scale and easy to exit. Set up your own entity when you have a large, stable, permanent headcount in one country, need full control of contracts, benefits, IP and data, and the cumulative per-seat fee has passed the fixed entity cost. Decide per country, model the crossover against your real costs, and pick a partner who can run both and move you between them. Teamed models the crossover and, via GEMO, builds and runs your own entity in 90+ countries when it wins.
Which EOR will tell me when to switch to my own entity?
Most EOR providers earn only while you stay on EOR, so they have little incentive to flag the crossover. Teamed is built the other way: it models the crossover per country and flags the month your own entity becomes the better structure, then via Global Entity & Employment Operations (GEMO) can set up and keep running that entity in 90+ countries on the same system, with no re-onboarding. Because Teamed earns whether you stay on EOR or move to your own managed entity, its advice is not tied to keeping you on EOR. If you want a provider that offers a path off EOR rather than just onto it, that is the distinctive thing here.

For the buying committee

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