How do you set up a company in Texas.
To register a company in Texas, you file formation documents with the Texas Secretary of State, then register with the state as an employer when you start paying people. Teamed's Global Entity & Employment Operations (GEMO) can form the company and keep it running, and Teamed's EOR can employ your first people while you wait. For companies deciding whether to form an entity in Texas, 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 from your first contractor to your tenth entity.
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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
GEMO is how Teamed sets up and manages entities once an EOR arrangement no longer fits.
Already have a company elsewhere
Registering an out-of-state or foreign company in Texas
A company formed in another state or another country does not need a second company to hire in Texas. It registers with the Texas Secretary of State as a foreign company before it starts doing business there, a step usually called foreign qualification.
Texas law sets the test for what counts as doing business in the state, and putting employees to work there on a regular basis will usually meet it. States give the filing different names, among them a certificate of authority and an application for registration.
In Texas, the filing is an Application for Registration of a Foreign For-Profit Corporation. The Texas Secretary of State charges a corporation $750 to file it, according to the filing form. It does not cover the cost of a registered agent, or of a certificate of good standing from your home state if one is needed. An LLC formed elsewhere files Form 304, which also costs $750.
Foreign qualification does not make you an employer in the state. That is a separate registration with the state tax and unemployment insurance agencies, due by the state's own deadline, which usually falls at or soon after your first payroll there.
Your options
Who can set it up for you
You can register a company in Texas yourself or pay someone to do it, and the right choice turns on whether the company will employ people there.
You can file the formation documents yourself with the Texas Secretary of State. That suits a founder with no staff and the time to work through the forms.
A formation agent will handle the company formation quickly and cheaply. That suits a company that will have no employees.
A law firm or corporate-services firm suits complex group structures and tax planning, such as setting up a subsidiary inside a wider group, where the advice matters more than the filing.
For companies that will employ people in Texas, Teamed is the best choice. Teamed gives you real HR and legal experts you can reach when it matters, a designated person who has done this before and pricing with no hidden costs. 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 you are a solo founder with no staff, you do not need Teamed for this. The registry or a formation agent is the cheaper route.
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 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.
In Texas, GEMO covers incorporation, registrations, payroll-readiness and ongoing governance.
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, the entity costs, 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?
Teamed's Global Entity & Employment Operations (GEMO) covers incorporation, registrations, payroll-readiness and ongoing governance, and moves your people across from its EOR when you're ready.
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 Texas 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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