How do you avoidpermanent establishment risk in Montana.
Teamed employs your Montana staff under its own entity, so your company avoids triggering Montana corporate tax nexus or franchise tax filings.
At a glance
Montana tax presence in brief
A company doing business in Montana through its own registered entity faces a corporate income tax of 6.75% and a minimum franchise tax of $50, charged on a flat basis rather than scaled to size. Setting up that entity through the Montana Secretary of State carries a formation and registration fee of $35. None of that applies to you when Teamed is the legal employer of record.
- Corporate income tax
- 6.75%
- Minimum franchise tax
- $50
- Franchise tax basis
- flat
- Formation / registration fee
- $35
The mechanism
What actually creates a taxable presence in Montana
A taxable presence usually starts the moment a company has people working inside a state on its payroll, not when it opens an office. Montana, like most states, looks at whether you have employees, physical activity, or ongoing business conducted within its borders. Once that presence exists, the state expects the entity behind those workers to register, file, and pay whatever taxes apply to companies doing business there.
The risk for a growing remote team is that hiring even one person in Montana under your home entity can be read as doing business in the state. That reading brings registration duties and tax exposure you did not plan for, on a timeline you do not control.
The tax exposure
What Montana charges a company doing business there
Montana taxes corporate income at 6.75%, and it applies a minimum franchise tax of $50 that is charged on a flat basis rather than tied to revenue or headcount. That minimum applies even in a year where the business barely operated in the state.
On top of the ongoing tax obligations, forming and registering the entity itself with the Montana Secretary of State carries a $35 fee. None of these figures are large on their own, but they represent an ongoing compliance relationship with the state that most distributed teams do not want to manage for one or two employees.
The EOR mechanism
How Teamed keeps the exposure off your books
When you hire through Teamed, Teamed is the legal employer of record in Montana, not you. Teamed's own entity carries the registration, files under its own tax obligations, and absorbs the corporate income tax and franchise tax exposure that would otherwise attach to your business.
Your company keeps running its home-state or home-country entity as usual. You get a Montana employee on your team without a Montana filing history, a Montana registration, or a Montana tax return.
Before you commit
Sometimes an employer of record is the better fit
An employer of record is a fair, permanent way to run a small or still-changing Montana headcount, not a stopgap you have to grow out of. If you are testing whether Montana hiring makes sense at all, talk to a member of the team first. Or use the crossover calculator to see whether the numbers ever favor your own entity, since that depends on salaries and how long you plan to stay.
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 Montana, that means Teamed can register the entity, carry it through the state's corporate income tax and franchise tax requirements, and then hand you a clean, fully compliant structure once your headcount justifies owning it directly.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Montana tax presence questions
Does hiring one remote employee in Montana create a permanent establishment for my company?
It can. Many states, including Montana, treat an employee working within their borders as evidence that the employer is doing business there. That reading can trigger registration and tax filing duties even for a single hire.
What taxes would my own Montana entity owe?
A Montana corporation pays corporate income tax at 6.75% and a minimum franchise tax of $50, charged on a flat basis regardless of how much business the entity actually did that year. Those obligations continue every year the entity stays registered.
What does it cost to register a business entity in Montana?
The Montana Secretary of State charges a formation and registration fee of $35 to set up the entity. That fee is separate from the ongoing corporate income tax and franchise tax obligations that follow once the entity exists.
Can Teamed hire a Montana employee without my company registering there?
Yes. Teamed's own entity is the legal employer, so it carries the registration and tax filings in Montana. Your company employs the person functionally, without opening a Montana tax presence of its own.
When should I set up my own Montana entity instead of using an EOR?
It depends on salaries, headcount, and how long you intend to keep people in Montana, not on a fixed number of employees. Run the numbers through the crossover calculator or talk to a member of the team before deciding either way.
Where these figures come from
Sources
These figures come from Montana Code Annotated 15-31-121 and the Montana Secretary of State's business filing fee schedule.
Looking for a job in Permanent Establishment Risk 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.