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EOR vs your own entity

At a certain headcount, the fixed cost of opening a local entity beats per-employee EOR fees. Here's where the lines cross for your specific country and salary band.

At 10 hires in United States
EOR is cheaper
Saves $34,830 USD over 3 years vs the other option
Break-even point
32 hires
Above this, opening an entity beats RemoFirst.

3-year total cost curve

EOR baseline: RemoFirst · stand-up ~3 mo
EOR (RemoFirst)Own entityYour headcount (10)
Break-even
32 hires
EOR · 3y · 10 hires
$2,656,500 USD
Entity · 3y · 10 hires
$2,691,330 USD

Entity line includes the ~3-month stand-up window where you're still paying EOR per employee. Setup ($15,000 USD), annual compliance ($12,000 USD/yr), and payroll software ($150 USD/employee/mo) are baked in.

FX: Bundled fallback rates · updated 2026-08-28

Next step

Compare EOR providers for this scenario

Cost is only half the decision

The calculator answers the dollar question. These trade-offs answer the rest.

DimensionEOROwn entity
Time to first hire5–10 business days2–4 months (6+ in IN, CN, BR)
Up-front costDeposit (~1 month payroll)$15k–$80k setup + legal
Per-employee cost$199–$699/mo platform fee + payrollLower at scale, fixed overhead applies regardless
Compliance burdenProvider absorbs itYou own filings, audits, statutory reporting
Statutory benefitsStandard packages, limited customisationFull control, design your own
IP chain of titleVia EOR contractor agreementDirect, cleaner for VC / M&A diligence
PE / tax nexus riskRises after 12–24 months in DE/FR/ESResolved: you are the local taxpayer
Exit / downsizingCancel monthly, no liability tailWind-down 6–12 months, residual filings
Best for1–10 hires per country, testing markets10+ hires, regulated sectors, long-term commitment

Assumptions & formulas

Exact inputs powering the chart above for United States, billed in USD. Change HQ, country, or salary and these update live.

EOR inputs (baseline: RemoFirst)

Employer cost / mo
$7,180 USD
Platform fee / mo (verified, before FX)
$199 USD
One-time setup fee
$0 USD
One-time offboarding fee
$0 USD
FX markup applied
None assumed: FX cost is stated per provider, not folded into totals
EOR 3-year formula (per employee × N)
EOR = N × [ (comp/mo + platform_fee/mo) × 36 + setup_fee + offboarding_fee ]

Own-entity inputs (United States)

One-time entity setup + legal
$15,000 USD
Annual compliance / filings
$12,000 USD/yr
Payroll software / employee / mo
$150 USD
Stand-up window (still on EOR)
3 months
Employer cost / mo
$7,180 USD
Entity 3-year formula
Entity = setup + (annual_compliance × 3) + N × (comp/mo + payroll_sw/mo) × (36 − standup) + N × (comp/mo + platform_fee/mo) × standup

Comp/mo = (employee total annual cost incl. employer taxes) ÷ 12, converted to USD at the live mid-market rate. FX: Bundled fallback rates. Entity setup, compliance, and payroll-software figures are USD constants converted to USD at the same rate.

Break-even at a glance

Lines cross at 32 employees in United States.
HeadcountEOR 3y totalEntity 3y totalΔ (entity − EOR)Cheaper
1$265,650 USD$315,033 USD+$49,383 USDEOR
5$1,328,250 USD$1,371,165 USD+$42,915 USDEOR
10$2,656,500 USD$2,691,330 USD+$34,830 USDEOR
25$6,641,250 USD$6,651,825 USD+$10,575 USDEOR
50$13,282,500 USD$13,252,650 USD−$29,850 USDOwn entity

Positive Δ means the entity costs more than the EOR at that headcount; negative Δ means the entity is cheaper. The break-even chip flips at 32 employees.

Stay on EOR if...

  • You have under 5 hires in the country
  • You're testing market viability or hiring a first founding engineer
  • Speed matters: you need the hire onboarded this month
  • The country is high-friction (Brazil, India, China) and entity setup eats 6+ months
  • You may exit the market within 24 months

Open your own entity if...

  • You're past the break-even headcount the calculator shows
  • The country is PE-strict (Germany, France, Spain) and hires have decision authority
  • You're in financial services, healthcare, or defence, audit chain matters
  • M&A or fundraising in the next 18 months and IP cleanliness is a diligence point
  • You want full control over benefits design and equity treatment

FAQ

The break-even point is typically 5–15 employees per country, depending on local entity setup cost, ongoing compliance burden, and EOR platform fees. Cheap-entity countries (UK, Netherlands, Singapore) flip around 5–8 hires. Expensive ones (Brazil, India, Germany) often stay EOR-favourable past 20 hires.

Registering a local legal entity (Ltd, GmbH, SAS, Pvt Ltd, etc.) that becomes the legal employer. You then need a registered office, local payroll provider, tax registrations, statutory filings, and usually a local director or fiscal representative. Stand-up is 2–4 months in most jurisdictions, 6+ months in India, China, and parts of LatAm.

Local accounting, annual audit (mandatory above revenue thresholds), legal opinion letters for IP and contract reviews, statutory benefits administration, HR compliance software, and intra-group transfer pricing documentation. Add 15–25% on top of headline entity-running cost for the full operational load.

In Germany, France, Spain, and a handful of other jurisdictions, EOR usage beyond 12–24 months (especially if the employee signs contracts or holds decision authority) can still trigger taxable nexus. If you're past the break-even headcount AND in a PE-strict country, opening an entity can also reduce that regulatory tail risk. This is general information, not legal advice.

Yes. Most EOR contracts are month-to-month and employees can be transferred to your new entity via TUPE-style transfer (EU), novation (UK/US), or re-employment with continuity-of-service preserved. Plan 3–6 weeks for the transition and budget for legal fees and any statutory severance triggered by the transfer.

Reputable EORs pass IP rights to your operating company via the contractor agreement chain. For deep-tech or patent-heavy roles, owning the entity gives a cleaner IP chain of title, a meaningful factor for VCs and acquirers during due diligence.

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