Perimattic

EOR vs Entity Setup Comparison

Should you use an EOR or set up a legal entity? Compare total cost, timeline, compliance burden, and scalability for your international hiring plans.

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  • Decision Framework
  • Break-Even Analysis
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EOR vs Entity Setup Comparison

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FAQ

Frequently asked questions

At what team size does a local entity become cheaper than EOR?

Typically 10-15 employees in most countries. Below that, EOR fees are less than the fixed costs of maintaining a local entity (accounting, compliance, legal counsel, registered office).

How long does entity setup take?

It varies by country: Singapore ~4 weeks, UK ~6-8 weeks, India ~8-12 weeks, Germany ~8-12 weeks, Brazil ~4-6 months. EOR lets you hire in as little as 48 hours.

Can I start with EOR and transition to an entity later?

Yes, this is a common and recommended approach. Start hiring immediately via EOR, then set up an entity when you reach 10-15 employees. The EOR provider can help transition employees to your entity.

What are the compliance risks of not using either?

Hiring contractors who work like employees (misclassification) risks permanent establishment tax liability, back-taxes, penalties, and mandatory benefits owed. Some countries impose criminal liability.

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Expanding Internationally?

We provide end-to-end guidance on international hiring — from EOR selection to entity setup to contractor compliance. Book a discovery call.

Or email sales@perimattic.com