When your own entitystarts to make sense.
A South African entity earns its keep when the team is settled, the company will trade here for years, and somebody is ready to carry the director duties. Teamed will tell you plainly when you are not there yet.
Start here
Four questions that decide it before the money does
Most people arrive at this question with a spreadsheet, and in South Africa the spreadsheet is unusually misleading in both directions. R175 makes entry look trivial, while a headline 27% tax rate makes the running cost look worse than it is for a small company. Both numbers mislead.
Will you still be hiring here in three years. Setting up is paid once and earns back slowly. If your plan for South Africa is shorter than the payback period, the arithmetic never closes.
Must you be the legal employer. Some contracts, licences and public tenders require it outright. When one of those applies, cost stops being the question.
Will the company make a trading profit here. Check the Small Business Corporation position before modelling anything, because the difference between 27% flat and a progressive scale starting at nothing is large enough to change the answer on its own.
Who carries the director duties. A named director takes on real legal responsibility that does not go away if things go wrong. If you cannot name that person today, you are not ready to file.
Any no is a stay signal, whatever the cost maths says.
The number everybody asks for
There is no headcount that works everywhere
The question usually arrives as a number. At how many people does an entity become worth it. There is no honest single answer, and any provider quoting one across countries is quoting a marketing figure rather than a calculation.
It moves with salary levels, with how much employer cost a country adds on top, with what professional help costs locally, and with how long you intend to stay. South Africa adds exchange control, which affects how money moves rather than how much tax you pay, and which no headcount rule of thumb has ever accounted for.
We do not print a number. The crossover calculator works it out for South Africa using the actual local figures, and it gives you a band rather than a false point.
What changes
What owning the company actually gets you
You become the employer, in name and in law. Contracts are with you, the relationship is yours, and there is no third party in the middle of it. For a team that has settled and is going to grow, that is usually the point.
The company also sits on your balance sheet. It can hold assets, sign leases, bid for local work and carry a South African trading history. Some public and corporate procurement effectively requires a local entity, which for certain businesses settles the question by itself.
What you give up is flexibility, and you take on exchange control. Moving money in and out of South Africa carries a layer of process that most of Europe does not have, and it is worth understanding before you file rather than after.
Worth saying plainly
Staying where you are is a decision, not a delay
If the team here is small, still changing shape, or you are testing whether the market works, an employer of record is very often the better answer. That is not a lesser outcome and we will say so directly rather than steering you towards the larger piece of work.
Teamed does not earn more by moving you sooner, which is why the Graduation Model exists as a path rather than a sales step.
Teamed's employer of record in South Africa is a flat $599 per employee per month, with zero FX mark-up in any currency pairing and one invoice at the end of it. Contractors, employer of record and your own entity all run on one platform, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work, not a ticket queue.
Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it for South Africa.
Who carries it
Your own entity, when it's time. We set it up, migrate you in, and hand it back intact.
Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for corporation tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it.
In South Africa that matters a little more than elsewhere, because Teamed employs through its own local entity rather than a partner. The people who would run your company are the people already running ours.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Questions about making the call
At what headcount should we open a South African entity?
There is no single number that holds across countries. South Africa pairs an almost free entry with a tax position that depends entirely on whether you qualify as a Small Business Corporation. The calculator works it out.
Is it not cheap enough to just do it?
Registering is R175. Running the company is not, because monthly payroll and labour fund declarations and an annual return continue whether or not it trades.
What is exchange control?
A layer of process around moving money in and out of South Africa that most European jurisdictions do not have. It affects how you fund and repatriate rather than how much tax you pay.
Can we change our mind afterwards?
You can close a company, but it is slower than opening one and the filing obligations continue until it is properly deregistered.
What tax rate would we pay?
27% as an ordinary company. As a qualifying Small Business Corporation, nothing on the first R99,000, then 7%, then 21%, and 27% only above R550,000.
Sources
- SARS, companies, trusts and small business corporations tax rates
- CIPC BizPortal, company registration
- Companies Act, director duties
The rest of the South Africa guides
Looking for a job in Eor Vs Entity yourself? Teamed does not hire people directly. Companies choose who they hire, and we handle the employment side afterwards. Here is why we cannot help with your search.
