Moving from an EOR toyour own entity in Kentucky.
Teamed sets up your Kentucky entity, migrates your employees onto it, and hands you a clean, compliant company you own outright.
At a glance
What moving to a Kentucky entity actually involves
Kentucky charges a $40 fee to register a new business entity, a flat 5.0% corporate income tax, and a minimum franchise tax (LLET) of $175 for corporations. Those three figures set the floor for what running your own company here costs, before payroll, registered agent, and compliance work.
- Corporate income tax
- 5.0%
- Minimum franchise tax
- $175
- Formation / registration fee
- $40
Why teams make the move
Why companies outgrow an EOR in Kentucky
Most companies start with an EOR because it lets them hire in Kentucky without setting up a legal entity first. That works well for a first hire, a pilot project, or a market you're still testing.
Once your Kentucky team grows or you plan to stay for years, the math often shifts toward owning the entity directly. Whether that shift makes sense depends on your headcount, your salaries, and how long you intend to operate there, not a fixed rule. Teamed's crossover calculator walks through that math using your actual numbers rather than a guess.
The cost picture
What it costs to set up and run a Kentucky entity
Registering a business entity with the Kentucky Secretary of State carries a $40 filing fee. That's a one-time cost to get the entity on the books, separate from any ongoing accounting, registered agent, or legal support you choose to use.
Once the entity is operating, Kentucky taxes corporate income at a flat 5.0% rate. Corporations also owe a minimum franchise tax (the LLET) of $175 each year, even in a year with little or no profit. Budget for both the state's 5.0% corporate rate and the $175 minimum when you model what owning the entity will cost annually.
How the move happens
How Teamed handles the transition
The move from EOR to your own entity works best as a planned handover, not a scramble. Teamed forms the Kentucky entity, gets it registered and in good standing, and lines up the employment paperwork so your team's contracts, benefits, and payroll transfer without a gap in coverage.
Because Teamed already employs your team under the EOR arrangement, the migration is mostly administrative rather than a renegotiation of employment terms. You keep the people, you gain the entity, and Teamed steps back once everything is verified and running under your own name.
Before you commit
Sometimes an employer of record is the better fit
An employer of record is sometimes the better answer for Kentucky, not a compromise you settle for. If your team there is small, still changing shape, or you're testing whether Kentucky is the right market at all, staying on an EOR keeps things simple and reversible. Talk to a member of the team about your specific situation, or run the numbers yourself with the crossover calculator.
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.
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 Kentucky, that means Teamed forms the entity with the Secretary of State, gets it registered for the $175 minimum franchise tax and the 5.0% corporate income tax, and moves your employees onto it cleanly. Global Entity and Employment Operations, which we call GEMO, runs this same process across 100+ countries, so the handover follows a pattern we've done many times before.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Kentucky entity setup, answered plainly
How much does it cost to register a company in Kentucky?
The Kentucky Secretary of State charges a $40 filing fee to register a new business entity. That covers the entity formation itself, not ongoing costs like registered agent service, accounting, or the annual franchise tax.
What taxes will my Kentucky entity owe?
Corporations pay a flat 5.0% corporate income tax on Kentucky-sourced income. They also owe a minimum franchise tax, called the LLET, of $175 per year, which applies even if the company has little profit.
When does it make sense to move off an EOR in Kentucky?
It depends on your headcount, salary levels, and how long you plan to keep operating in Kentucky, not a fixed number of employees. Use the crossover calculator to compare your actual EOR costs against the cost of owning an entity.
Will my employees' contracts change when we move to our own entity?
Teamed handles the migration so employment terms carry over rather than get renegotiated from scratch. The goal is continuity for your team while the legal employer changes from Teamed to your own Kentucky entity.
Can Teamed handle the entity setup and the employee migration together?
Yes, that's exactly what the GEMO service is built for. Teamed forms the Kentucky entity, gets it compliant, and hands it back to you with your team already in place.
Where these figures come from
Sources
Figures on this page come from the Kentucky Department of Revenue and the Kentucky Secretary of State.
Looking for a job in Moving From Eor To Your Own 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.