--- title: "EOR vs Entity Setup in Arizona" description: "Compare forming a company in Arizona with using an EOR. See real registration costs, taxes, and when each option fits." canonical: https://www.teamed.global/country-hiring-guides/united-states/arizona/eor-vs-entity --- ![Arizona business district.](/cluster-assets/country-hiring-guides/united-states/arizona/eor-vs-entity/images/hero.webp) # Should you use an EOR orset up an entity in Arizona. Teamed's EOR lets you hire in Arizona in days, without registering a corporation or filing state tax returns yourself. Served by Teamed US Inc., Delaware · Payroll via SUNA Solutions Last reviewed 22 September 2026 · Arizona guide At a glance ## Arizona in brief Arizona charges a $50 formation fee to register a corporation with the Arizona Corporation Commission. Once formed, the entity owes a flat 4.9% corporate income tax and a minimum franchise tax of $50, also flat, regardless of how much the company earns that year. Corporate income tax4.9% Minimum franchise tax$50 Franchise tax basisflat Formation / registration fee$50 Forming an entity in Arizona ## What setting up actually involves Registering a corporation in Arizona means filing with the Arizona Corporation Commission and paying the $50 formation fee before you can legally employ anyone under that entity's name. You then need a registered agent, an EIN, state and federal payroll tax accounts, and someone qualified to run Arizona payroll correctly from day one. Once the entity exists, it doesn't go away quietly. You owe Arizona's flat 4.9% corporate income tax on profits, plus a minimum franchise tax of $50 that applies on a flat basis whether the company had a good year or a rough one. None of this is hard, but it's ongoing work that someone on your team has to own. Where an EOR fits instead ## Hiring in Arizona without the paperwork An employer of record like Teamed already holds the Arizona registration, the tax accounts, and the compliance history. You skip the $50 formation fee, the corporate income tax filings at 4.9%, and the flat minimum franchise tax entirely, because the employee sits on Teamed's entity, not yours. You still direct the work day to day. Teamed handles the contract, the payroll, the withholding, and the parts of Arizona employment law that would otherwise sit on your legal team's desk. The honest section ## When an EOR is genuinely the right call Some teams assume an entity is the grown-up choice and an EOR is a stopgap. That's not quite right. Your own entity, on your timeline ## 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 Teamed's service for building you a real entity when the numbers say it's worth it, across 100+ countries. We handle the registration, the migration of existing employees from EOR contracts into your new entity, and the handover, so you end up owning something clean rather than a half-finished project. Before you commit ## Sometimes an employer of record is the better fit For a small or still-changing headcount in Arizona, or while you're testing whether the market is worth a long-term commitment, an EOR is a fair, deliberate choice, not a lesser one. Talk to a member of the team about your specific plans, and if you want the numbers spelled out, run them through the crossover calculator first. Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than 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 on local salaries and employer costs rather than on a headcount rule of thumb. Talk to a member of the team Model the crossover for the United States 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 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 Arizona specifically, that means we absorb the $50 formation fee, register the entity properly with the Arizona Corporation Commission, and get your payroll tax accounts set up before we move a single employee over, so the 4.9% corporate income tax and the flat $50 minimum franchise tax become your accountant's routine, not a surprise. Entity Management (GEMO) The Graduation Model Employer cost calculator > They set up our EU entity and moved hires across without missing a payroll. *Helene Dubois, COO* Talk to an expert about Arizona Questions ## Common questions about EOR versus entity setup in Arizona How much does it cost to register a company in Arizona? The Arizona Corporation Commission charges a $50 formation fee to register a corporation. That fee covers registration only, not ongoing compliance costs like payroll setup or tax filings. What taxes will my Arizona entity owe once it's formed? Arizona applies a flat 4.9% corporate income tax on profits. There's also a minimum franchise tax of $50, applied on a flat basis regardless of the company's earnings that year. Can I hire an employee in Arizona without setting up a company there? Yes. An employer of record like Teamed already has a registered entity and tax accounts in Arizona, so you can hire legally without filing anything with the state yourself. When should I move from an EOR to my own Arizona entity? It depends on your salary levels and how long you plan to stay in the state, not on a fixed headcount. Run your numbers through the crossover calculator to see where the math actually turns in your favor. Does using an EOR mean I lose control over how the role is managed in Arizona? No. You still direct the work day to day. Teamed handles the employment contract, payroll, withholding, and Arizona-specific compliance behind the scenes. Where these figures come from ## Sources Figures on this page come from Arizona Revised Statutes 43-1111, tax rates for corporations, and the Arizona Corporation Commission fee schedule. ## More on entities in Arizona - [Hiring in Arizona, overview](/country-hiring-guides/united-states/arizona)parent - [Arizona setting up](/country-hiring-guides/united-states/arizona/entity-setup)sibling - [Arizona running costs](/country-hiring-guides/united-states/arizona/entity-running-costs-and-filings)sibling - [Arizona tax presence](/country-hiring-guides/united-states/arizona/permanent-establishment-risk)sibling - [Arizona moving from an eor](/country-hiring-guides/united-states/arizona/moving-from-eor-to-your-own-entity)sibling - [Set up an entity, by country](/entity-setup-by-country)hub - [Entity Management (GEMO)](/entity-management)core - [Talk to an expert about Arizona](https://www.teamed.global/contact?from=eor-vs-entity)CTA