Free decision tool

EOR or entity?

Six questions, an honest answer. The same framework our team uses with clients before they spend a cent on legal setup.

1

How many people will you have in this country in the next 12 months?

2

How long do you expect to operate in this market?

3

When does the first hire need to start?

4

What will the team actually do in-country?

5

How sensitive is IP, regulated data, or government contracting?

6

What is your appetite for setup and run cost?

Your recommendation

Either works, lean EOR first

Based on 0 of 6 answered. Score updates as you go.

EOR fit0%
Entity fit0%

Rule of thumb

Under 20 people, short horizon, no local invoicing? EOR usually wins. Long-term, scaled, regulated or trading? Entity earns its keep.

The matrix

Side by side, no spin.

Dimension
EOR
Own entity
Time to first hire
24 to 72 hours typical
3 to 9 months for setup
Upfront cost
No setup fee
$15k to $50k+ legal, registration, capital
Ongoing admin
Bundled into per-employee fee
Local accountant, payroll bureau, filings
Compliance risk
Sits with the EOR
Sits with you
Contracting locally
Not designed for it
Yes, full local trading
Headcount sweet spot
1 to 20 per country
20+ per country
Exit cost
Offboard and stop
Wind-down can take 6 to 12 months

Worked scenarios

How we'd call it.

EOR is the right move

First hire in a new market

One senior salesperson in Germany to test demand. No local invoicing yet.

EOR. Speed and zero setup cost matter more than entity ownership at this stage.

Set up an entity

Regional hub of 30+ engineers

Building a long-term engineering centre in India over 3 years.

Entity. At scale, per-employee fees overtake the cost of running a local subsidiary.

Either works, lean EOR first

Acquired team, integration in flight

Acquired a 12-person team in Brazil, deciding the long-term structure.

Start on EOR to keep payroll uninterrupted, then convert to entity within 12 to 18 months.

Set up an entity

Regulated financial services

Hiring licensed staff in the UAE to operate under your DFSA licence.

Entity. Regulated activity usually requires a locally licensed legal employer.

The crossover

Where EOR stops being cheaper.

On a typical engagement, EOR fees and entity running costs cross around 15 to 25 employees in one country, depending on local payroll complexity and average salary. Below that line, EOR is almost always the lower total cost. Above it, an entity starts to pay back the setup investment.

  • Add legal, accounting, banking, and director-of-record costs when modelling entity.
  • Factor in 3 to 9 months of opportunity cost while the entity is being formed.
  • If you might exit the market, price in 6 to 12 months of wind-down.

Indicative annual cost, one country

1 to 5 employeesEOR · LowestEntity · Very high per head
6 to 15 employeesEOR · LowerEntity · High per head
15 to 25 employeesEOR · ComparableEntity · Comparable
25 to 50 employeesEOR · HigherEntity · Lower per head
50+ employeesEOR · Much higherEntity · Lowest per head

Indicative ranges from Agile client engagements. Real crossover depends on country, salary band, and benefit complexity.

The hybrid path

Start on EOR. Convert when it makes sense.

The cleanest play for most growing companies: start on EOR to hire in days, prove the market, then convert to your own entity when headcount and trading activity justify it. Agile runs both sides, so the transition is an admin exercise, not a payroll outage.

See how Agile runs EOR
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