How do you movefrom an EOR in South Dakota.
Teamed forms your South Dakota entity, transfers employment from the EOR, and hands you a fully compliant company, without disrupting payroll or benefits.
At a glance
South Dakota entity setup, in brief
South Dakota charges no corporate income tax and has no franchise tax basis, and forming an entity through the Secretary of State costs $150. Those figures shape the calculus for any company weighing its own entity against staying with an EOR.
- Corporate income tax
- 0%
- Franchise tax basis
- none
- Formation / registration fee
- $150
Why teams make the move
When your own entity makes sense in South Dakota
South Dakota often becomes attractive once a company has enough people there that the per-employee cost of an EOR outweighs running its own payroll and benefits. The state's tax environment plays a part too: South Dakota levies no corporate income tax and carries no franchise tax basis, so an incorporated company doesn't carry those recurring costs once it sets up.
Cost is only one part of the decision, though. You need HR infrastructure, a registered agent, and someone accountable for local compliance before you take payroll in house.
The transition
How the switch from EOR to your own entity works
Teamed's approach starts by forming the legal entity in South Dakota, filing with the Secretary of State and paying the state's formation fee of $150. Once the entity exists, we register it for the relevant tax and payroll accounts, then migrate each employee's contract, benefits, and payroll history from the EOR agreement into the new entity, on a schedule you control.
Employees keep the same pay, the same benefits, and the same manager throughout. They just see their employer of record change on paper, and nothing about their day-to-day work needs to move at the same time as the legal switch.
Cost and tax picture
What incorporating in South Dakota costs and how it's taxed
South Dakota's formation fee for registering a company is $150, paid to the Secretary of State. Because South Dakota's corporate income tax rate is 0% and there is no franchise tax basis, the state itself keeps your ongoing tax filing simpler than in many other jurisdictions.
That said, formation and state tax registration are only part of the picture. You'll still need payroll infrastructure, benefits administration, and a compliance function once the entity is live, which is exactly what Teamed's GEMO service is built to help you stand up and hand over.
Timing it right
When to actually make the switch
There's no fixed headcount at which an entity beats an EOR. It depends on your salary levels, how many people you have in South Dakota, and how long you plan to stay. Rather than guess, run your numbers through the crossover calculator, which compares your actual costs under each structure.
If the numbers are close, or your South Dakota headcount is still moving up and down, staying with an EOR a while longer is a legitimate choice, not a delay tactic.
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, especially for a small or still-changing team, or while you test the South Dakota market before committing to a permanent presence. Talk to a member of the team about your specific situation, or run the numbers yourself with the crossover calculator to see when your own entity starts to pay off.
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.
Global Entity and Employment Operations, which we call GEMO, is how Teamed builds and hands over entities across 100+ countries, including South Dakota. We handle the Secretary of State filing, register you for the relevant state tax accounts, and migrate your employees' contracts and benefits across without a gap in coverage. Because South Dakota charges no corporate income tax and carries no franchise tax basis, the ongoing compliance load once you're incorporated tends to stay lighter than in many other states.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Common questions about moving from an EOR in South Dakota
How much does it cost to set up an entity in South Dakota?
The South Dakota Secretary of State charges a formation fee of $150 to register a company. Beyond that filing fee, ongoing costs depend on the payroll, benefits, and compliance infrastructure you build once the entity is live.
Does South Dakota tax corporate income?
No. South Dakota's corporate income tax rate is 0%, according to the South Dakota Department of Revenue. That removes one recurring cost that companies in many other states have to plan around.
Is there a franchise tax in South Dakota?
South Dakota has no franchise tax basis. That's one reason some companies find the state's ongoing compliance load lighter once they've incorporated.
When should we move from an EOR to our own entity in South Dakota?
It depends on your salary levels, headcount in the state, and how long you plan to stay, not on a fixed employee count. The crossover calculator compares your actual costs under an EOR against running your own entity so you can see where the numbers cross.
Will our employees notice the switch from an EOR to our own entity?
Employees keep the same pay, benefits, and manager throughout the transition. The change is mostly on paper, who their formal employer is, and Teamed schedules the migration so there's no gap in coverage.
Where these figures come from
Sources
These figures are drawn from the South Dakota Department of Revenue and the South Dakota Secretary of State.
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