How do you set upa company in Texas.
Teamed forms and runs your Texas entity, or employs your team directly through its own EOR, so you can hire before you incorporate.
At a glance
Texas entity setup, fast facts
Registering a Texas entity costs $300 in state filing fees. Franchise tax is based on margin rather than revenue, and the minimum franchise tax is $0, so many new entities owe nothing in their early years.
- Minimum franchise tax
- $0
- Franchise tax basis
- margin
- Formation / registration fee
- $300
Setting up in Texas
Registering your entity with the Secretary of State
Setting up a company in Texas means filing a Certificate of Formation with the Texas Secretary of State. The filing carries a fee of $300, payable when you submit the certificate.
You'll also need a registered agent with a physical Texas address, and depending on your entity type, you may draft an operating agreement or bylaws. None of this happens overnight, and until the entity is active with an EIN and payroll registrations in place, you cannot legally put someone on payroll in the state.
Tax exposure
Franchise tax works on margin, not revenue
Texas levies a franchise tax based on margin rather than gross revenue or net income. The minimum franchise tax is $0, so many smaller or newly formed entities owe nothing in their early years even after registering.
The margin-based calculation means your actual liability depends on how the business performs, not a flat percentage applied at formation. Get this wrong on your first filing and you invite scrutiny you don't need while you're still building the team.
Before you incorporate
What Teamed handles while you decide
If you need someone working in Texas before your entity and payroll registrations are ready, Teamed can employ that person on your behalf under its own registered entity. You avoid the wait entirely, and once your Texas entity is live, Teamed helps transition the employment record across.
This route suits founders testing the Texas market, teams hiring one or two people ahead of a broader build-out, or anyone who wants payroll running correctly from day one without waiting on state paperwork.
The honest take
An employer of record is not a lesser choice
Plenty of companies treat an EOR as a stopgap, something to escape as soon as possible. That's the wrong frame.
Your own entity, when it's time
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 and hands over entities once an EOR arrangement no longer fits.
Before you commit
Sometimes an employer of record is the better fit
An employer of record is sometimes simply the better answer, not a compromise, particularly for a small or still-changing headcount, or while you're testing whether Texas is even the right market. Talk to a member of the team about what your situation actually needs, and if you want the numbers, run them through the crossover calculator rather than guessing.
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 Texas, that means Teamed can register your Certificate of Formation, handle the registered agent and franchise tax setup, and move your employees from EOR employment onto your new entity's payroll without gaps in their pay or benefits. Teamed operates this way across 100+ countries, so the same handover process applies whether Texas is your only location or one of many.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Texas entity setup questions
How much does it cost to register a company in Texas?
The Texas Secretary of State charges a filing fee of $300 for the Certificate of Formation. That covers the registration itself; you'll separately budget for a registered agent, any legal drafting, and ongoing compliance.
How does the Texas franchise tax work?
Texas franchise tax is calculated on margin rather than gross revenue. The minimum franchise tax is $0, which means many smaller or early-stage entities can owe nothing.
Can I hire someone in Texas before my entity is set up?
Yes. Teamed can employ the person under its own entity as an employer of record while your Texas registration and payroll setup are still in progress, so you don't lose time waiting on paperwork.
When does it make sense to set up my own Texas entity instead of using an EOR?
It depends on your headcount, salary levels, and how long you plan to stay in Texas, not a fixed number of employees. Run your numbers through the crossover calculator or talk to a member of the team to see where the balance sits for you.
What does Teamed do once I'm ready to move off EOR in Texas?
Through GEMO, Teamed sets up your Texas entity, handles the registered agent and franchise tax registration, and migrates your employees onto your new payroll without disrupting their pay. You get an entity that's fully yours, handed back intact.
Where these figures come from
Sources
These figures come from the Texas Comptroller (franchise tax) and the Texas Secretary of State (formation and registration fees).
Looking for a job in Entity Setup 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.