--- title: "EOR or Entity in Rhode Island" description: "Compare hiring through an EOR versus setting up your own entity in Rhode Island, with real tax and filing figures from state sources." canonical: https://www.teamed.global/country-hiring-guides/united-states/rhode-island/eor-vs-entity --- ![Rhode Island business district.](/cluster-assets/country-hiring-guides/united-states/rhode-island/eor-vs-entity/images/hero.webp) # Do you need an entityor an EOR in Rhode Island. Teamed employs your Rhode Island hires under our own entity today, so you skip incorporation and the state's fixed annual costs until you're ready. Served by Teamed US Inc., Delaware · Payroll via SUNA Solutions Last reviewed 22 September 2026 · Rhode Island guide At a glance ## What Rhode Island charges once you're incorporated Rhode Island taxes corporate income at 7.0%, but it also charges a minimum franchise tax of $400 even in years you make no profit. Filing your Articles of Organization with the Secretary of State costs $150. None of that touches you if Teamed employs your team under its own entity instead. Corporate income tax7.0% Minimum franchise tax$400 Formation / registration fee$150 The entity route ## What incorporating in Rhode Island actually involves Setting up your own company in Rhode Island starts with filing Articles of Organization with the Secretary of State, which carries a $150 fee under Form 400. That gets you a legal entity, but not a compliant one. You still need a registered agent, state and federal tax registrations, payroll set up correctly, and benefits that match Rhode Island's rules for employees. Once you're incorporated, the state expects 7.0% corporate income tax on profits, and it expects the $400 minimum franchise tax whether or not you turned a profit that year. That second figure matters most for a company still finding its footing. You pay it as the cost of existing on paper in Rhode Island, not as a reward for growth. The EOR route ## How Teamed hires without any of that When Teamed acts as your employer of record, your Rhode Island hire signs with an entity that already exists, already files correctly, and already carries the compliance history the state expects. You get someone working legally on day one, without touching the $150 formation fee, the $400 minimum franchise tax, or the 7.0% corporate income tax that comes with running your own books there. This works cleanly for a single hire, a small pilot team, or a market you're still testing. You pay Teamed a straightforward fee for the employment relationship, and the entity-level tax exposure simply isn't yours. Where the crossover sits ## Doing the real math before you commit The honest comparison isn't EOR fee versus zero. It's EOR fee versus formation cost, plus $400 a year in minimum franchise tax regardless of profit, plus 7.0% corporate income tax once you're profitable, plus the internal time it takes to run payroll and filings correctly. For a handful of hires, that fixed state cost often outweighs what an EOR charges. Where the lines cross depends entirely on your salaries and how long you plan to stay in Rhode Island, not on a fixed headcount number. Run it through the crossover calculator with your own figures rather than guessing, and talk to a member of the team if you want a second opinion on the math. The honest answer ## When an EOR is genuinely the right call An employer of record is sometimes the better answer, not a lesser one, for a small or still-changing team, or when you're testing whether Rhode Island is even the right market. Committing to $150 in formation costs and an ongoing $400 minimum franchise tax makes little sense before you know the hire, or the market, is going to stick. Talk to a member of the team about your specific plan, and run the crossover calculator once you have real numbers to test. Your 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 how Teamed builds your own legal entity when you're ready to own it outright, across 100+ countries. We handle formation, tax registration, and the operational setup, then move your existing employees onto it without a gap in their pay or benefits. In Rhode Island, that means we file the Articles of Organization, register you correctly with the Division of Taxation, and get you positioned for the 7.0% corporate income tax and $400 minimum franchise tax before either one becomes a surprise. You end up with a clean, fully yours entity, handed back intact, not a half-finished project you inherit. Before you commit ## Sometimes an employer of record is the better fit An employer of record is sometimes the better answer, not a lesser one, for a small or still-changing team, or when you're testing whether Rhode Island is even the right market. Committing to $150 in formation costs and an ongoing $400 minimum franchise tax makes little sense before you know the hire, or the market, is going to stick. Talk to a member of the team about your specific plan, and run the crossover calculator once you have real numbers to test. 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 Rhode Island, that means we file the Articles of Organization, register you correctly with the Division of Taxation, and get you positioned for the 7.0% corporate income tax and $400 minimum franchise tax before either one becomes a surprise. You end up with a clean, fully yours entity, handed back intact, not a half-finished project you inherit. 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 Rhode Island Questions ## Rhode Island EOR and entity questions Do I need to register a business entity to hire someone in Rhode Island? No. If Teamed employs your hire under its existing entity as an employer of record, you can pay and manage that person legally without registering anything in Rhode Island yourself. You only need your own entity if you want to employ people directly under your own name. What does it cost to form a company in Rhode Island? Filing your Articles of Organization with the Rhode Island Secretary of State costs $150 under Form 400. Beyond that filing, you also take on the state's ongoing corporate income tax at 7.0% and its $400 minimum franchise tax. Is Rhode Island's minimum franchise tax charged even if my company loses money? Yes. The $400 minimum franchise tax applies regardless of profit, so a company with no income in a given year still owes it. That's a key reason smaller or early-stage teams often use an EOR instead of forming an entity right away. When should I move from an EOR to my own entity in Rhode Island? It depends on your salaries and how long you intend to keep operating there, not a fixed number of employees. Run your own figures through the crossover calculator, and talk to a member of the team if you want help reading the result. Can Teamed set up my Rhode Island entity later, once I'm ready? Yes. Teamed's Global Entity and Employment Operations, which we call GEMO, handles formation and tax registration in Rhode Island and migrates your existing hires onto the new entity without disrupting their pay. Where these figures come from ## Sources These figures come from the Rhode Island Division of Taxation and the Rhode Island Secretary of State, Form 400, Articles of Organization. ## More on entities in Rhode Island - [Hiring in Rhode Island, overview](/country-hiring-guides/united-states/rhode-island)parent - [Rhode Island setting up](/country-hiring-guides/united-states/rhode-island/entity-setup)sibling - [Rhode Island running costs](/country-hiring-guides/united-states/rhode-island/entity-running-costs-and-filings)sibling - [Rhode Island tax presence](/country-hiring-guides/united-states/rhode-island/permanent-establishment-risk)sibling - [Rhode Island moving from an eor](/country-hiring-guides/united-states/rhode-island/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 Rhode Island](https://www.teamed.global/contact?from=eor-vs-entity)CTA