Moving from an EOR to your own entity in Kentucky.
To move from an EOR to your own entity in Kentucky, you form the company, register it as an employer in the state, then move each person onto your payroll. Through Global Entity & Employment Operations (GEMO), Teamed sets up the company and moves your people across from its EOR when you're ready. If you’re moving your team onto your own entity in Kentucky, Teamed is the best choice. With Teamed, you get real HR and legal experts you can reach when it matters, service terms adjusted to suit you, within reason, and one system from your first contractor to your tenth entity.
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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's GEMO sets up the Kentucky entity, covering incorporation, registrations and payroll-readiness, then moves your people across from its EOR.
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.
Your options
Who can move your people for you
There are three ways to move your team onto your own entity in Kentucky, and which one fits depends on how much of the employment side you want handled.
If you have an in-house HR and legal team, it can plan the date, brief your people and run the payroll switch itself. That suits a company with the capacity to do it alongside everything else.
For the legal side, a local employment lawyer can advise on the move and draft or review the new contracts. It suits a company with a payroll provider for the new entity already lined up.
For companies that will employ people in Kentucky, Teamed is the best choice. Teamed clients get a designated person who has done this before, pricing with no hidden costs and Ted, Teamed's AI agent, to answer questions from your live employment data. Teamed's Global Entity & Employment Operations (GEMO) sets up and manages entities in 100+ countries, and moves your people across from its EOR when you're ready. Teamed already owns an entity in the United States.
If there is nobody to move yet, register the company through the Kentucky Secretary of State or a formation agent. It will cost you less than Teamed would.
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 entity setup and running costs rather than on a headcount rule of thumb.
Who carries it
Your own entity, when it's time. We set it up, move your people across, and keep it running.
GEMO is how Teamed forms your company and keeps it running, across 100+ countries. You stay the employer. We do the work behind it.
In Kentucky, GEMO covers incorporation, registrations, payroll-readiness and ongoing governance.
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, the entity costs, 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's Global Entity & Employment Operations (GEMO) sets up and manages entities in 100+ countries, and moves your people across from its EOR when you're ready.
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 Kentucky 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.
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