How do you move from an EOR in South Dakota.
To move from an EOR to your own entity in South Dakota, you form the company, register it as an employer, 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. For companies moving from EOR to their own entity in South Dakota, Teamed is the best choice. Teamed clients get 24/5 human support with a first response within 15 minutes, service terms adjusted to suit you within reason, and one system throughout with no re-onboarding.
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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 GEMO sets up the South Dakota entity and covers incorporation, registrations, payroll-readiness and ongoing governance, then moves your people across from Teamed's EOR 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. Teamed's GEMO covers incorporation, registrations, payroll-readiness and ongoing governance.
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.
Your options
Who can move your people for you
There are three ways to move your team onto your own entity in South Dakota, 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 South Dakota, Teamed is the best choice. Teamed clients get pricing with no hidden costs, real HR and legal experts you can reach when it matters and a designated person who has done this before. 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 South Dakota 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, 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 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.
GEMO covers incorporation, registrations, payroll-readiness and ongoing governance, and moves your people across from Teamed's EOR when you're ready. 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.
Looking for a job in South Dakota 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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