EOR vs. Opening an Entity: How to Choose

EOR vs. opening an entity: the direct answer

An employer of record (EOR) is usually the more practical first step when you need to employ a small or uncertain team quickly in a country where you have no entity and do not yet need a durable operating presence. A local entity is usually the stronger long-term structure when you have sustained headcount, revenue, or regulated activity in the country, need direct control over your employment infrastructure, and can support local tax, payroll, governance, banking, reporting, and exit obligations. There is no universal employee-count threshold at which one path becomes cheaper or safer, and the answer is country-specific by construction — the same company can reach opposite conclusions in two markets. The break-even point is an output of country-specific cost, time-horizon, control, and risk inputs — which is why this page gives you the decision model and the worksheet to run it, rather than a number.

The decision has four realistic outcomes, not two. Call them the Four Paths: the complete set of answers this question actually has, including the two that are not "pick a structure."

Path	Choose it when	Do not use it as a shortcut for
Use an EOR	You need fast or uncertain hiring at limited headcount, have no suitable local entity, the service is lawful and available in the worker's country, and you do not yet need a durable commercial presence.	Permanent-establishment/tax, immigration, regulated-activity, data, IP, or past-classification analysis.
Open an entity	You have a sustained local team or revenue, need direct employer infrastructure, licenses, banking, contracts, or premises, intend strategic permanence, and can resource local governance and payroll.	A belief that incorporation alone makes every employment practice compliant.
Use a staged EOR-to-entity path	You have an urgent hire now plus a credible plan for larger or permanent operations — with a trigger date and a transition budget.	Indefinite postponement of a known entity need.
Consider neither yet	The worker may be a genuine contractor, work authorization is unresolved, the provider model is not permitted or verified in the country, or you need business-activity or tax advice first.	Continuing a potentially misclassified or unauthorized arrangement.

One caveat before anything else. Under an EOR arrangement, the client company generally still directs the day-to-day work even though the provider's local employing entity is the legal employer. The exact allocation of obligations depends on local law, the provider's operating model, and the signed agreement. No path transfers "all liability."

Check the governing gates before comparing costs

Six questions decide whether either structure is available to you at all. Call them the Six Gates: pass/fail tests that run before any cost comparison, because a failed gate overrides a favorable price.

1. The worker's country. Employment structures are creatures of national law; nothing else on this page means anything until the country is fixed.
2. EOR legality and operating model there. Confirm the arrangement is permitted for your case and whether the provider employs through its own local entity or a partner — country availability alone proves neither. An owned-entity model means the provider employs through a local company it controls; a local-partner model means a third company employs the worker under a commercial arrangement with your provider. The chain matters when something goes wrong.
3. Worker classification. If the person may be a genuine independent contractor — or is currently engaged as one — resolve contractor misclassification risk before choosing an employment structure.
4. Work authorization. Citizenship, visas, and sponsorship are an immigration question neither path answers by default.
5. Business activity. Selling, contracting, or operating locally raises corporate-tax and permanent-establishment questions that sit outside the employment choice.
6. Local entity need. Regulated roles, licenses, local invoicing, or premises can require an entity regardless of cost.

If Gates 3 to 6 are unresolved, escalate to qualified employment, tax, or immigration counsel for that country before you commit to either structure.

The criteria that then decide it: time horizon (a market test favors an EOR; permanence favors an entity), headcount trajectory, total employer cash requirement under identical assumptions, how much direct control you need over contracts, benefits, and policies, whether you will earn local revenue or perform regulated activity, and what each exit costs.

First action. Do not start by collecting EOR quotes or incorporation proposals. Complete the decision worksheet at the end of this page first: fix the country, worker status, start date, headcount path, horizon, and activity profile, and assign each input an owner. Comparable quotes and adviser estimates gathered against that one set of assumptions are the only inputs the break-even model can use.

On this page

• What actually changes under an EOR and an owned entity?
• EOR vs. entity: the criteria that change the decision
• Calculate total cost and the break-even point
• Match your situation to a path
• What an EOR does not remove
• Where an EOR arrangement is itself licensed or restricted
• When to switch from EOR to entity, and how to plan the exit
• Complete the decision worksheet
• Frequently asked questions

What actually changes under an EOR and an owned entity?

An employer of record is a service arrangement in which a provider's local entity becomes the legal employer of your worker in a country where you have no entity of your own, while your company continues to direct the work.

Under that arrangement, the provider's local employing entity signs the employment contract and administers defined obligations — typically payroll, statutory contributions, mandatory benefits, and core employment processes — under its contract and local structure, while your company manages the role, the work, and the business relationship. This is what people mean when they talk about hiring abroad without an entity: you are buying employment infrastructure, not avoiding employment law. What any provider actually covers in a given country is defined by the signed agreement and local law, not by a glossary, and the EOR is not a globally uniform legal category. Using one does not remove your employer-adjacent responsibilities toward the person doing the work. For the mechanics of the model, see how an employer of record works.

Under an owned entity, your local company is the employer, and every piece of employment infrastructure is yours to build or buy. The categories are broadly consistent even though the rules are strictly national. In the EU, for instance, employers must meet minimum employment-terms requirements that national law can exceed, and must register as an employer with local authorities before running social security and payroll — a step whose timing is set nationally, and which in some countries must be completed before the employee starts work. The UK illustrates the entity lifecycle: forming the company (directors, shareholders, people with significant control, registration), ongoing director and record-keeping responsibilities that remain yours even when you hire an accountant, registering as an employer before the first payday — no earlier than two months before you start paying people, with a documented late-submission route if the PAYE reference has not arrived in time — and filing annual accounts. These are representative examples only, checked August 1, 2026; every country defines its own registers, filings, and employer duties.

The practical difference, then, is where the employment infrastructure lives — not who manages the person. Under an EOR you buy the infrastructure per employee and accept the provider's frameworks for contracts, payroll timing, and benefits; under an entity you own the infrastructure, can shape it, and carry every registration, filing, and deadline that comes with it — outsourcing the bookkeeping or the payroll run changes who does the work, not who is responsible for it.

If you already have a suitable local entity, the closer comparison is usually co-employment rather than an EOR. A PEO or co-employment arrangement splits defined employer obligations between a provider and your own local employing entity, which means it presupposes the entity an EOR replaces; an agency-of-record arrangement contracts and pays independent contractors rather than employing anyone, so it answers a different question entirely. For the first comparison, see EOR vs PEO.

EOR vs. entity: the criteria that change the decision

The three tables below carry the side-by-side comparison, grouped so that each one answers a single question; the prose after them interprets rather than repeats. Where an answer depends on the country, salary, provider, or contract, the tables say so instead of inventing a universal figure.

Who employs, and where

An EOR compared with an owned entity: the structural gates and the setup path.

Criterion	Under an EOR	Under an owned entity	The decisive question
Legal employer	The provider's local employing entity, per contract and local law	Your own local entity	Who must be the employer for this role and country?
Country gate	The EOR service must be lawful and available; the operating model varies	The entity type must fit the activity; some sectors are restricted	Is each path actually permitted for this worker and activity?
Setup	Provider contract, worker onboarding, funding setup	Entity formation, registrations, banking, payroll, advisers	How much structure must exist before an offer is possible?
Speed to first compliant hire	Often faster; depends on country, immigration, notice, documents, payroll cutoffs	Slower where registrations and banking precede payroll; country-dependent	What actually gates your target start date?

What it costs, and who runs it

The recurring economics and the control you keep.

Criterion	Under an EOR	Under an owned entity	The decisive question
Recurring administration	The provider administers defined tasks; you manage the relationship	You own or outsource payroll, filings, accounting, governance	Who runs the machine every month?
Cash requirement	Under an EOR: salary, employer costs, benefits, service fee, possible deposits or prefunding	Under an owned entity: salary, employer costs, benefits, setup, run costs, internal labor	What is the total cash requirement under identical assumptions?
Control	Contract terms, benefits, and policies constrained by the provider's frameworks	Direct control within local law, as the employer	Which employment decisions must you own directly?
Payroll and benefits	The provider's calendar, cutoffs, and benefit plans	Your own providers, plans, and timing	Can you live with someone else's payroll and benefits stack?
Scaling	Per-employee economics; provider limits may appear	A fixed base that spreads across a growing team	Which shape fits your headcount trajectory?

What neither path settles, and what leaving costs

The obligations that survive the choice, and the exit.

Criterion	Under an EOR	Under an owned entity	The decisive question
Corporate tax / permanent establishment	Under an EOR, not resolved by the arrangement; it depends on your own activities	An owned entity creates a local tax presence by design, with its own obligations	What does your activity create, whoever employs the worker?
Immigration	Under an EOR, sponsorship support varies by provider and country; never assume it	Your own entity may sponsor where eligible	Does this worker need authorization, and who can sponsor?
Data and IP	Split across you, the provider, and the contracts; needs a DPA and an assignment chain	Held within your entity, under local rules	Where do employee data and work product legally sit?
Local revenue, banking, licenses	Not provided; an EOR employs people, it does not trade for you	An entity enables local invoicing, banking, and licenses where permitted	Do you need to transact or hold licenses locally?
Exit	Under an EOR, provider notice, employee transition or termination	Closing an entity means terminations plus wind-down, filings, tax clearance	What does leaving cost — for the people and the structure?
Not ideal when	You need local trading, licences, or direct control of contracts and benefits from the start, or the role must sit inside a locally authorized entity	The horizon is short or uncertain, headcount is one or two, or nobody can own local filings and deadlines	Which constraint would you rather not have to fix later?
When it stops being the right answer	Per-employee fees exceed your modeled entity run-rate, or you need something an EOR does not sell: local trading, licenses, direct control	The market fails, headcount falls, or the local operation no longer justifies its governance load	What would have to change for this to become the wrong structure?
Trigger to reassess	A written headcount or date, reviewed quarterly	Annual review against run-rate, headcount, and strategic intent	Who owns the review, and when is it next?

Read them in order: the first two rows of the first table are gates, not preferences. An EOR concentrates the setup burden into a contract and shifts recurring administration to the provider, at the price of per-employee fees and constrained control. An entity concentrates control and permanence in your hands, at the price of building and running employment infrastructure — and of a real exit cost if the market test fails. Rows where you cannot accept the EOR column's constraints, or cannot resource the entity column's obligations, decide the question faster than any price comparison.

On speed, any onboarding timeline a provider advertises is vendor-stated and conditional — the real start date is gated by the country's requirements, the worker's immigration position and notice period, document collection, and the next payroll cutoff, none of which a service contract accelerates. The fourth column is the working tool: assign each decisive question an owner from the worksheet at the end of this page and require a written answer for your specific country. A row you cannot answer yet is an open gate.

The staged path and "neither yet", field by field

The tables above compare the two end states. The other two of the Four Paths carry the same fields, in the same order and the same three groups, so you can compare any two paths directly.

Who employs, and where.

Criterion	Under a staged EOR-to-entity path	Under "neither yet"
Legal employer	The provider's entity until transfer, your entity after — a change of employer, not an administrative migration	Undetermined; do not sign either arrangement until the failed gate closes
Country gate	Both gates must pass: the EOR must be lawful now, the entity type must fit the intended activity later	The gate that failed is the whole answer
Setup	Both, overlapping: provider onboarding now, formation and registrations in parallel	None; the work is advice, evidence, and remediation
Speed to first compliant hire	The EOR gates the first hire; incorporation runs on its own national clock	Slower than either path, and cheaper than getting it wrong

What it costs, and who runs it.

Criterion	Under a staged EOR-to-entity path	Under "neither yet"
Recurring administration	Provider-run, then in-house, with a handover period where both exist	None yet
Cash requirement	Per-employee EOR economics plus entity setup and run costs incurred before anyone sits under the entity, plus one-off transfer costs	Adviser fees, and any remediation the advice identifies
Control	Constrained now, direct later; benefits and contract terms usually change at transfer	Not applicable until the failed gate closes
Payroll and benefits	The provider's calendar until cutover, then yours; benefit plans rarely transfer unchanged	Not applicable until the failed gate closes
Scaling	Per-employee economics now, fixed-base economics after transfer — the crossover is the point of the plan	Not applicable until the failed gate closes

What neither path settles, and what leaving costs.

Criterion	Under a staged EOR-to-entity path	Under "neither yet"
Corporate tax / permanent establishment	Unresolved throughout, and the entity creates a local tax presence by design once formed	Unresolved, and part of what the advice must settle
Immigration	Cases may need transfer or re-sponsorship at cutover; confirm before the transfer date, not after	Unresolved; authorization is usually the gate itself
Data and IP	Two employers in sequence means two assignment chains and a transfer basis for employee records	Not applicable until the failed gate closes
Local revenue, banking, licenses	Unavailable until the entity is live and registered	Not applicable until the failed gate closes
Exit	Two exits, sequentially: provider notice and any early-termination charge, then full statutory exposure under your own entity	Not applicable until the failed gate closes
Not ideal when	The hiring plan is aspirational rather than budgeted, or immigration cases would need re-sponsorship on a timeline nobody has confirmed	The failed gate has already closed — at which point the structural question reopens and this stops being the answer
When it stops being the right answer	The trigger has been reviewed twice without moving, or headcount confidence has fallen below what justified incorporating	It stops the moment the failed gate closes and the structural question reopens
Trigger to reassess	A written date or headcount, set before the first hire and reviewed quarterly	The date the advice is expected, tracked like any other deliverable

The discipline that makes the staged path work is the trigger: a written date or headcount, set before the first hire, reviewed quarterly, with a transition budget attached. Without one, "staged" quietly becomes indefinite postponement of a known entity need, at compounding per-employee cost.

Three adjacent structures, and where each belongs

Three other arrangements come up in this decision and are routinely confused with an EOR. Depth on each belongs to a sibling page; what you need here is enough to rule each in or out.

Criterion	PEO / co-employment	Agency of record	Independent contractor
Legal employer	Your own local entity, with defined obligations shared with the provider	Nobody is employed under this model	Nobody, if the classification genuinely holds
What it presupposes	That you already have the local entity an EOR replaces	That the relationship is genuinely a contractor relationship	That the facts satisfy that country's own classification test
When it beats an EOR	You have the entity and want to outsource administration rather than employment	You are paying genuine contractors and need contracting and payment infrastructure	Never as a substitute for employment — only where the classification is independently sound

The first is the comparison to run when you already own the entity, covered on the EOR vs PEO page. The classification test that governs the third sits on contractor misclassification risk, and it decides whether the third column is available to you at all.

Calculate total cost and the break-even point

What the published thresholds actually say

Published EOR-versus-entity comparisons routinely name a headcount at which an entity becomes cheaper. The table below records what seven of them state, checked August 1, 2026. Each page is cited only as evidence of its own published figure, never as authority for the underlying economics.

Publisher	Threshold stated	Country scope stated	Governing source cited	Threshold moves with the publisher's own cost assumptions
Foothold America	Six or more employees	Yes — United States	No	Not stated
Teamed	Ten or fewer, where entity running costs fall	Yes — United Kingdom	No	Yes — derived from its own assumed per-employee EOR fee and entity run cost
Borderless	10 to 15 per country	No — "per country," country unspecified	No	Not stated
Team Up	15 to 25 in a single country	No	No	Not stated
Remote	Often 15 to 25 or more	No	No	Not stated
Wisemonk	25 to 35 per market	No	No	Yes — states the threshold moves with the provider's fee level
PamGro	25 to 35, moving to 35 or more under its own flat fee	Yes — India	No	Yes — moves to 35 or more under its own flat fee

The stated thresholds run from six employees to thirty-five — a spread of roughly six to one, in which the lowest and highest figures are not even describing the same country. None identifies a governing source. Three of the seven say in terms that the crossing point moves with cost assumptions the publisher itself supplies: two with the provider's own fee level, and one by working the arithmetic from its own assumed per-employee EOR fee and entity run cost. A number that swings sixfold across the literature, and that its own publishers say moves with the seller's price list, is not a benchmark. It is a modeling output that has been detached from its inputs.

What each path actually costs

The other common failure is compression: salary, statutory employer costs, fees, deposits, and one-time charges collapsed into a single unexplained number for each path. Keep the components separate, and only compare the two paths under the same country, worker, salary, benefits, headcount, and horizon assumptions. EOR fees are a separate line from gross salary, statutory employer contributions, benefits, deposits, foreign-exchange costs, and exit costs; detailed fee structures, deposits, and quote fields are covered in EOR fees, deposits, and quote math.

Statutory employer contributions are the payroll taxes and social-insurance charges an employer owes on top of gross pay, set by the country's own rules. They are not the deductions withheld from the employee's pay, and they are not the EOR's fee. All three are separate lines, and a comparison that merges any two of them cannot be checked.

EOR annualized cash requirement = gross salary + statutory employer costs + mandatory additional compensation + selected benefits + EOR service fees + nonrefundable one-time fees + minimum-commitment or early-termination charges + applicable service taxes + FX cost + a termination or severance reserve where local law or the contract creates one. Track refundable deposits and prefunding separately as cash tied up, not as expense.

Entity annualized cash requirement = gross salary + statutory employer costs + mandatory additional compensation + selected benefits + annualized formation and setup costs + payroll, HR, accounting, legal, tax, governance, banking, insurance, and office costs + internal labor + a nonrefundable exit allowance. Track required capital and recoverable cash separately.

Break-even logic: for each month of the expected horizon, compare the cumulative EOR cash requirement with the cumulative entity cash requirement under identical worker, salary, benefit, and country assumptions. Report the crossing point only when every material input is verified; otherwise report "not established."

Mandatory additional compensation — a 13th or 14th month, a holiday subsidy, or a statutory bonus — is an extra payment some countries require by law on top of twelve monthly salaries. It is employer cost, and it is the most commonly omitted line in cross-country comparisons. Check whether your country requires it before you enter any salary figure.

Check also whether the country caps the contribution base, because a cap changes the shape of the cost curve at senior salaries — and check which contributions the cap actually reaches, because that is where the modeling error usually sits. Poland caps the annual base for pension and disability contributions at thirty times the projected average monthly wage, administered by ZUS; for 2026 the ceiling is PLN 282,600 (checked August 1, 2026). Above it, the employer stops paying pension and disability contributions on the excess — but the ceiling reaches only those two. Accident insurance and the Labour Fund, Solidarity Fund, and Guaranteed Employee Benefits Fund levies, all employer-funded, continue with no annual limit. The marginal employer cost falls sharply at the ceiling; it does not stop. Where no cap applies at all, employer cost rises with salary without limit. Two countries with similar headline rates can therefore produce different answers for the same senior hire.

Every input needs a source before the output means anything. Each figure you enter should carry its country, currency, unit, date, and scope:

Input	Required source	If missing
Statutory employer burden	Governing official source for the country (statute, tax or social-security authority)	Mark "not verified" — never estimate from a regional average or a neighboring country
Contribution caps, floors, and bands	Same governing source; caps are usually published annually	Mark "not verified"; do not assume the headline rate applies to the whole salary
EOR fee, deposit, one-time fees, add-ons	A comparable, dated quote or the provider's current published terms	Mark "quote required" or "not verified"
FX rate and markup	The rate source, date, and any disclosed conversion margin, in writing	Mark "not verified"; an undisclosed spread is a cost you cannot model
Entity filing and registration fees	Official registry or tax authority	Mark "not verified"; a vendor estimate is not a sole source
Legal, accounting, payroll run costs	Written, scoped estimate from a qualified local adviser or provider	Use a labeled range with assumptions, or omit
Internal labor	Your own estimate by role and hours	Use a visible assumption — not zero by default
Compulsory insurance	The national regulator plus an insurer quote for your activity classification	Mark "not verified"; do not fold it into the service fee without confirming
Termination or severance reserve	Country rules plus the provider agreement or employment contract	Treat as a scenario range; state the contract type and seniority it assumes
Exit cost (each path)	Country rules, contract terms, adviser estimate	Treat as a scenario range; separate employee exit from entity wind-down

A worked example: Portugal, one employee

This example shows what the model looks like when the official lines are actually sourced and the unsourceable ones are left visibly open. It is a modeled illustration, not a quote, a market rate, or a legal opinion.

Assumptions. Portugal; euros; one employee on an indefinite contract in the private-sector general regime; no sectoral collective agreement overlay assumed; annual gross remuneration of €45,000, which is an assumption rather than a market figure; no contribution ceiling applied, so confirm the base rules for your own worker category; horizon 24 months; figures checked August 1, 2026. Portuguese law requires two statutory additional payments — the Christmas and holiday subsidies under the Código do Trabalho (Lei n.º 7/2009), articles 263.º and 264.º. The Christmas subsidy equals a month's remuneration and falls due by 15 December; the holiday subsidy is payable before the holiday period. In practice the Portuguese year runs to fourteen payments rather than twelve, so a model built from a monthly base salary multiplied by twelve understates it. Enter annual gross remuneration with both payments already inside it, as this example does.

Portugal, annual, in euros; all figures checked August 1, 2026.

Line item	EOR path	Entity path	Source and status
Gross remuneration	€45,000	€45,000	Not applicable — modeled input, stated in the assumptions above
Portugal — employer social security, 23.75% of gross remuneration	€10,687.50	€10,687.50	Instituto da Segurança Social via gov.pt, page updated May 26, 2026 — Verified with limitation: the general rate for private-sector employees, and other rates apply to other employer and worker categories
Portugal — employee contribution, 11%	Withheld from pay, not employer cost	Withheld from pay, not employer cost	Same source — Verified
Portugal — work-accident insurance	Carried by the employing entity; confirm whether it is passed through at cost or marked up	Your figure	Compulsory for employees in Portugal; the premium is set by the insurer against activity risk — Not verified
Portugal — company registration, one time	Not applicable	€220 with a pre-approved model constitution; €360 where the shareholders draft their own	Instituto dos Registos e do Notariado via gov.pt — Verified
Accounting, payroll, legal, governance run rate	Included in the service fee, scope varies by contract	Your figure	Not verified — obtain a scoped local estimate
EOR service fee, one-time fees, deposit, FX	Your figure	Not applicable	Quote required — a published list price is not a total
Internal labor	Your figure	Your figure	Not verified — your own estimate by role and hours
Termination or severance reserve	Your figure	Your figure	Not verified — depends on contract type, seniority, and any collective agreement

What the verified lines settle. At the same salary, the headline statutory employer cost is the same on both paths — about €10,690 a year at €45,000 — so it largely cancels out of the structural comparison, and what it drives instead is your monthly cash requirement, deposit exposure, and severance reserve. That cancellation holds for the headline rate only. It does not automatically hold for activity-classified lines such as work-accident insurance, for a sectoral collective agreement binding the provider's entity but not yours, or where a provider marks up statutory pass-through rather than remitting at cost; confirm all three in the quote. Contributions are a funding-calendar fact, not a cost, and the calendar is currently in transition: gov.pt states a payment window from the 10th to the 25th of the month after the one they cover, while the Código dos Regimes Contributivos sets the 10th to the 20th. Confirm which window applies to your registration. On the entity side, the official cost of incorporating in Portugal is €220–€360 for a non-urgent online filing, once — roughly €9 to €15 a month across a two-year horizon. Any comparison that opens with a four- or five-figure "entity setup cost" is describing adviser and accounting fees, not the official fee. Ask which it is.

What they do not settle. The two lines that decide this comparison — the entity's recurring run rate and the EOR's service fee — have no governing source. Neither can be taken from a regional average, a neighboring country, or a vendor's estimate. So the break-even reduces to a single question: does the annual EOR service fee exceed the entity's annual run cost plus internal labor plus roughly €110 to €180 of registration amortized over a 24-month horizon? Obtain the scoped run-rate estimate and one comparable quote and you have your answer for this country. Without them, the honest output is "break-even not established" — and the useful part of that answer is that it names exactly which two documents to go and get.

What this example excludes. Benefits above the statutory floor, meal allowance, any sectoral collective agreement overlay, immigration costs, banking and office costs, foreign-exchange conversion, urgent or trademark-linked registration surcharges, and corporate tax. Add each line back for your own case; every one of them can change the answer, and none of them is inside the figures above.

Comparability, and running the model three ways

Comparability is the other discipline. EOR quotes are only usable in the model when they were requested against identical inputs — the same country and worker location, salary and currency, start date, worker type, benefits package, headcount, and contract term. Quotes gathered on different assumptions cannot be averaged into a "market rate"; a sampled quote is one dated data point with its own exclusions. On the entity side, the equivalent discipline is amortization: spread one-time formation, setup, and expected exit costs across the horizon you actually believe in. A short or uncertain horizon punishes the entity's fixed base; a long, confident horizon dilutes it — which is why the same country can produce opposite answers for two companies with different plans.

Then run the model three ways. "Case" here means the entity's annualized fixed burden, which the horizon drives. Using the Portugal figures above:

Input	Low case — 36-month horizon	Base case — 24-month horizon	High case — 12-month horizon
Registration, annualized	€73–€120	€110–€180	€220–€360
Statutory employer cost at €45,000	€10,687.50	€10,687.50	€10,687.50
Entity run rate: accounting, payroll, legal, governance	Your figure — scoped local estimate	Your figure	Your figure
EOR service fee and one-time charges	Your figure — comparable quote	Your figure	Your figure
Internal labor	Your figure	Your figure	Your figure
Exit allowance, each path	Your figure	Your figure	Your figure
Modeled crossing point	Not established until the unsourced lines are obtained	Not established	Not established

The single line driving the spread is the entity's recurring run rate. Across the whole horizon range the official registration fee moves by at most €287 a year and the statutory cost does not move at all, while the run rate is unbounded until someone quotes it. The cases are assumptions, not probabilities, and a modeled result is not a quote, a legal opinion, or a guaranteed payroll outcome. If a material input is unverified, the model's output is that status, not a number.

Track two cash-flow items separately, because they distort comparisons when buried in "cost": refundable EOR deposits or salary prefunding (cash tied up, recoverable on exit under the contract) and any capital your entity must hold. Both affect how much cash the path requires; neither is an expense until it stops being recoverable.

How the break-even point moves with the two open inputs

At the same salary both paths carry the same gross remuneration, the same statutory employer cost, and the same mandatory additional compensation, so those lines cancel and cannot move the crossing point. What is left is a two-input problem: the entity's fixed annual burden against the EOR's annual fee per employee. The grid below demonstrates the mechanic. Every value in it is an assumption chosen to show the range — none is a market rate, a quote, or a benchmark, and none should be carried into your own model.

Assumed inputs only. Headcount at which the entity's fixed annual burden first costs less than the cumulative EOR fee. Portugal, 24-month horizon, registration amortized at €110 a year inside the fixed burden.

Entity fixed annual burden — run rate, internal labor, amortized registration	EOR fee €300 per employee per month	EOR fee €500 per employee per month	EOR fee €800 per employee per month
€12,000	4 employees	3 employees	2 employees
€24,000	7 employees	5 employees	3 employees
€48,000	14 employees	9 employees	6 employees

Across that grid the crossing moves from two employees to fourteen, and neither input is knowable from any published source: the fixed burden depends on a scoped local estimate and your own labor, and the fee depends on a comparable quote. That is the entire reason the published thresholds run from six to thirty-five. Two numbers you have to go and get decide the answer, and the plausible range for them is wider than the range of thresholds anyone publishes.

The grid also excludes what it cannot model: refundable deposits and prefunding, one-time onboarding and setup fees, exit costs on either path, foreign-exchange cost, compulsory insurance, corporate tax, and any benefit above the statutory floor. It assumes the entity's fixed burden stays flat as headcount grows, which stops being true once payroll, HR, and governance work scales, and it assumes a single country. Replace both open inputs with your own figures before acting on any crossing point, including this one.

Match your situation to a path

Find the row closest to your situation. Every row assumes you have already worked the Six Gates. Two situations turn on reasoning a row cannot carry; they follow the table. The scenarios are hypothetical and illustrative — none is a quote, an average, or a legal conclusion.

Situation	Footprint	Primary need	Path to test first	Why	Not ideal when	Residual risk to manage	Next action
One hire, one country, fixed-term market test	One country, temporary	Speed and reversibility	EOR	An entity's fixed base cannot amortize across one employee over one year	The role is regulated, or you already trade locally	Permanent establishment from your own activity; IP assignment chain	Gather two or three comparable quotes against one assumption set, with deposits and one-time fees itemized
Durable team, local revenue, premises	One country, permanent	Control and the ability to trade locally	Entity	Trading, banking, and contracts already require local presence	Headcount confidence is below what justifies the governance load	Corporate tax regardless of employer; works council thresholds as headcount grows	Obtain a scoped formation and run-rate estimate plus official fee schedules, and test both against the current EOR run-rate in the model
Urgent hire now, substantial hiring planned	One country, scaling	Speed now, control later	Staged EOR-to-entity	The trajectory justifies the entity; the calendar does not permit waiting	The hiring plan is aspirational rather than budgeted	Duplicated cost during overlap; continuity of employment at transfer	Set a written trigger and transition budget before the first hire
Regulated role, or unresolved worker status	Any	Legality before economics	Neither yet	A failed gate overrides every cost input	Never — the gate is resolved first	Prior-period classification exposure; licensing; work authorization	Pause and obtain country-specific legal, regulatory, or tax advice
Contractors converting to employees	One or several countries	Remediation, then structure	Neither yet, then EOR or entity per country	Conversion does not cure prior-period exposure	Never route to a vendor before counsel has scoped the exposure	Back-liability, contributions, and retroactive entitlements	Counsel before any vendor conversation; scope exposure per country
No provider verifiably employs in the target country	One country	Coverage before economics	Neither yet	A country listed on a coverage page is not proof of an employing entity there	Never — get the employing entity named first	Contracting into a partner chain you cannot see or assess	Ask which entity employs there, owned or partner, and get the answer in writing
Modeled cost exceeds what you can fund	Any	Funding, not structure	Neither yet	Deposits and prefunding tie up cash before any hire is productive	Never — choosing a structure does not close a funding gap	Committing to a contract you cannot sustain through its notice period	Rerun the model with deposits and prefunding separated from expense, then confirm what you can carry through a full notice period on either path
You already have a suitable local entity in that country	Has an entity in-country	Use the infrastructure you own	Neither an EOR nor a second entity	An EOR replaces an entity you already have	The existing entity cannot lawfully employ this role or worker category	Duplicated employer obligations; an unclear legal-employer chain	Compare co-employment models before quoting either
Acquired team in a new market	Inherited, one or more countries	Continuity, not speed	Depends on what actually transferred	The employment relationships predate your decision	Never change anyone's employer before mapping what transferred	Continuity of employment; inherited contract terms; prior-period classification	Map what transferred, then take local advice before changing anyone's employer

The urgent first hire, with fifteen hires planned inside two years

Speed argues for an EOR now; the trajectory argues for an entity. The decisive inputs are the confidence of the hiring plan and the country's realistic entity setup time. Likely path: a staged EOR-to-entity transition — start the first hires under the EOR while incorporating in parallel, with a written trigger (a date or headcount), a transition budget, and an employee-transfer plan drafted before it is needed.

The regulated role, or the worker whose status is unresolved

A licensed function — in financial services, healthcare, or another supervised sector — may have to sit inside a locally authorized entity, and a worker who may be a genuine contractor, or is already engaged as one, raises a classification question no employment structure answers by itself. Here a failed gate overrides every cost input. Likely path: neither yet. First action: pause the structural decision and obtain country-specific legal, regulatory, or tax advice; choosing a structure first and asking afterward converts an open question into an incurred exposure.

What an EOR does not remove

The most expensive misunderstanding in this decision is treating an EOR as a blanket compliance solution. An EOR service arrangement may reduce or administer defined employment risks — it does not eliminate risk categories, and the Ten Risk Lanes below are the ten domains that remain yours to assess in every country, whoever signs the employment contract.

Risk lane	An EOR arrangement may support	You must still separately assess
Employment administration	Contracts, statutory processes, local employment practice	Your conduct as the directing company
Payroll and social security	Registration, calculation, remittance	Accuracy of the data and funding you provide
Corporate tax and permanent establishment	Nothing — outside the arrangement	What your activities create locally
Immigration	Sponsorship in some countries, per provider terms	Each worker's authorization before hire
Agency-work and labor-leasing rules	Compliance with its own licensing, where applicable	Whether the model is permitted for your case
Works councils and representation	Administration of some obligations	Consultation duties your decisions trigger
Data protection	Processing under its role and DPA	Your responsibilities for employee data
Intellectual property	Contract chains that pass IP to you	Whether assignment is valid under local law
Worker classification	Employment status for the new arrangement	Any exposure from the period before it
Termination and disputes	Process administration under local law	Costs, risk, and the decision itself

One assumption travels worse than any other. At-will termination is close to unique to the United States. Nearly everywhere else, notice periods, grounds, process, and severance are set by statute, and a termination plan shaped by US practice is the fastest way to turn a routine exit into a claim. Check the country's own rules before you plan an exit under either structure.

Three lanes deserve emphasis. First, tax. Permanent establishment is a tax concept: a taxable presence your company creates in a country through its own activities, assessed under that country's rules and any applicable treaty, independently of who employs the worker. A related test asks whether someone habitually concluding contracts on your behalf is acting as a dependent agent, which can create that presence through a person rather than a place. Company-tax rules are set nationally and differ by country (checked August 1, 2026), and whether your sales, contracting, or management activity creates a taxable presence is a treaty- and country-specific analysis for a qualified tax adviser — the employment contract's signature block does not decide it.

Second, employee representation. Works councils are elected employee bodies with information and consultation rights; a collective bargaining agreement is a sector- or company-level agreement that can set pay, hours, benefits, and termination terms above the statutory floor. Both can bind your operation regardless of who signs the employment contract, and in much of Europe they are decisive rather than marginal.

Third, data. Under the GDPR's controller and processor framework (checked August 1, 2026), the client company typically retains data responsibilities for employee data it decides how to use, and cross-border transfers need safeguards regardless of who signs the employment contract; outside the EU, the applicable national regime governs. Intellectual property moves the same way: it reaches you only if every link assigns it — worker to employing entity, employing entity to your company — and each link has to be valid under the law governing it, which is why the assignment chain is a contract question in two jurisdictions rather than one clause in yours. And moving an existing contractor onto an EOR arrangement does not automatically cure past misclassification exposure — that history is a separate, jurisdiction-specific question for counsel.

Where an EOR arrangement is itself licensed or restricted

An EOR is a triangular structure: one company employs, another directs the work. Several countries regulate that structure directly, through licensing, admission requirements, headcount caps, duration limits, or outright prohibition of personnel supply. The three groups below name regimes verified against a governing source. The set is not exhaustive, and absence from it is not evidence that a country leaves the arrangement unregulated.

Where a permit or licence is required

Verified against the governing instrument. No row is a conclusion about any provider or any arrangement — whether a particular EOR engagement falls inside a country's definition of labor leasing, dispatch, or contract labour is a question for local counsel.

Regime	Where it applies	What it requires or limits	Regulator and governing source	Status
Labor leasing (Arbeitnehmerüberlassung)	Germany	A permit is required to place employees with a third party who directs their work. The same worker may not be assigned to the same hirer for more than 18 consecutive months, and earlier assignments count where the gap between them is three months or less. A collective agreement may set a different limit. Separately, a collective agreement may depart from equal pay only for the first nine months of an assignment, or up to 15 months under a sector-supplement agreement with stepped increases.	Bundesagentur für Arbeit — § 1 and § 8 Arbeitnehmerüberlassungsgesetz	Verified
Admission to the hiring-out market (Wtta)	Netherlands	Companies that hire out workers must be admitted before they may do so, and companies that hire workers in may only contract with admitted providers — an obligation that falls on the client, not only the provider. Phased: providers using the transitional regime register between November 1, 2026 and January 1, 2027; admission applications run from May 1 to June 30, 2027; assessment and the public register open on July 1, 2027; the client-side prohibition and inspectorate enforcement begin January 1, 2028.	Nederlandse Arbeidsinspectie and the Nederlandse Autoriteit Uitleenmarkt — Wet toelating terbeschikkingstelling van arbeidskrachten	Verified with limitation — partially in force since July 1, 2026; the core admission scheme applies from January 1, 2027 and the client-side prohibition from January 1, 2028
Worker dispatching (労働者派遣)	Japan	A license from the Minister of Health, Labour and Welfare is required to carry on a worker-dispatching business; the license runs three years initially and five years on renewal. Dispatch is excluded for specified categories of work, including port transport, construction, security, and most medical services.	Ministry of Health, Labour and Welfare — Act on Securing the Proper Operation of Worker Dispatching Businesses and Protecting Dispatched Workers, arts. 4, 5 and 10	Verified with limitation — assignment-period limits on the receiving company sit elsewhere in the Act and should be confirmed for the specific role
Contract-labour licensing	India	A contractor who supplies workmen to an establishment must hold a license, and the establishment must register as principal employer, where twenty or more workmen are engaged as contract labour on any day of the preceding twelve months. States may set their own threshold — Haryana applies the Act at fifty. The principal employer is liable for wages the contractor fails to pay.	Chief Labour Commissioner and state labour departments — Contract Labour (Regulation and Abolition) Act, 1970, ss. 1(4), 7 and 12	Verified with limitation — the Act governs "workmen" engaged as contract labour; whether a given professional or managerial role falls inside that definition is fact-specific

Where the model is restricted or prohibited

Verified against the governing instrument. No row is a conclusion about any provider or any arrangement — whether a particular EOR engagement falls inside a country's definition of personnel subcontracting, dispatch, or agency placement is a question for local counsel.

Regime	Where it applies	What it requires or limits	Regulator and governing source	Status
Prohibition of personnel subcontracting	Mexico	Supplying or placing your own workers for the benefit of another company is prohibited. Subcontracting is permitted only for specialized services or works that fall outside the client's corporate purpose and preponderant economic activity, and only where the contractor holds a current entry in the public register.	Secretaría del Trabajo y Previsión Social, via the REPSE register — 2021 reform to the Ley Federal del Trabajo, arts. 12, 13 and 15	Verified
Labor dispatch (劳务派遣)	China	Dispatched workers may only fill temporary, auxiliary, or substitute positions — a restriction set by the Labour Contract Law and elaborated by the Interim Provisions — and may not exceed 10% of the hirer's total headcount, counting employees under direct labor contract plus dispatched workers.	Ministry of Human Resources and Social Security — Interim Provisions on Labour Dispatch, MOHRSS Order No. 22, implementing the Labour Contract Law	Verified
Temporary work agencies (empresas de trabajo temporal)	Spain	Hiring workers in order to place them temporarily with another company may be done only through an authorized temporary work agency; doing it any other way is an unlawful assignment of workers. Where the placement rules are breached, the user company is jointly and severally liable with the agency for wage and social-security obligations.	Competent labour authority, under the Ministerio de Trabajo y Economía Social — Ley 14/1994, de 1 de junio, de empresas de trabajo temporal, read with article 43 of the Estatuto de los Trabajadores	Verified with limitation — whether a particular EOR arrangement is a placement of workers under article 43 rather than a service contract is fact-specific

EU-wide rules that apply through national law

Verified against the governing instrument. Each of these reaches an EOR arrangement only through the member state's own transposing law, which is where the operative rule for your case sits.

Regime	Where it applies	What it requires or limits	Regulator and governing source	Status
Equal treatment in agency work	EU-wide, through national transposition	Agency workers are entitled, as a general rule, to the same basic working and employment conditions as staff recruited directly for the same job; national restrictions on agency work must be justified.	National labor authorities — Directive 2008/104/EC	Verified with limitation — transposed differently in each member state
Sectoral prohibitions on agency work	Belgium, Croatia, France, Greece, Poland, Portugal, Slovenia, Spain	Agency workers may not be used for specified work considered particularly dangerous, such as removing asbestos, using fumigants, or exposure to radiation or to carcinogenic, mutagenic or toxic substances.	National labor authorities — Temporary agency work, Your Europe	Verified with limitation — EU portal summary; the national instrument was not opened for each named state

Regime table v1.2 · nine regimes in three groups · all rows checked August 1, 2026 · next scheduled review February 1, 2027.

Three questions close this gate for your country: which license, admission, or registration does the provider hold there, does any headcount cap or duration limit apply to your assignment, and does the regime place any duty on you as the hiring company rather than on the provider. Ask all three in writing, and treat a country-coverage page as marketing rather than as an answer.

When to switch from EOR to entity, and how to plan the exit

Treat the choice as a lifecycle decision with review points, not a one-time binary. Common switch triggers — none of them a fixed global threshold — include:

• Stable headcount that makes the entity's fixed base cheaper per employee in your own model
• Local revenue, customer contracts, or procurement that require a local counterparty
• Licenses, regulated activity, or tenders that require a local entity
• A permanent office or premises
• A strategic decision that the market is core
• The need for direct control of benefits, payroll, or policies
• EOR total cost exceeding the modeled entity run-rate at your headcount
• Provider limitations in the country, service scope, or contract terms
• Investor, customer, or audit requirements

The Six-Step Exit

When a trigger fires, sequence the transition rather than improvising it:

1. Build entity readiness first — formation, employer registration, payroll, banking, benefits — before giving provider notice.
2. Map each employee's contract, accrued rights, and any consent or notice requirements under local law.
3. Schedule payroll and benefits cutover against real payroll cutoffs so nobody misses a pay date.
4. Transfer or re-sponsor any immigration cases.
5. Migrate employee data and records under the applicable data-protection rules.
6. Settle provider notice periods, final invoices, deposit recovery, and offboarding.

Do not assume the transfer is seamless or consequence-free. Continuity of employment — whether the law treats the new employment as unbroken from the original start date, which drives seniority-based entitlements — is decided by local law and by the contracts, not by intention. Three things it drives are worth keeping distinct: notice is the warning period before employment ends, or the pay in lieu of it; severance is compensation for the ending itself; and statutory termination pay is whatever the country's own law mandates on top of, or instead of, either. Countries combine them differently, and a formula that works in one is wrong in the next. Employee consent, notice, and termination rules vary by country and by the provider agreement; take local advice on the transfer mechanics before you announce anything to the team. Revisit the trigger list on a set cadence — quarterly works for most teams — and whenever local revenue, licensing, or headcount plans change materially.

If you are switching providers rather than leaving

Moving between EOR providers uses the same six steps, with two differences that decide the timeline:

• The new provider's local position replaces step 1. Confirm which entity will employ in that country and whether it is owned or a partner, then confirm the employment contract can be novated or must be re-executed — the second is a change of employer with all that follows.
• Notice periods overlap, and both sides charge for them. Model the double-running period, the outgoing provider's notice and any early-termination charge, and when the deposit actually returns, before you commit to a transfer date.

Complete the decision worksheet

This is the first practical action: assemble the inputs below with a named owner for each, then take the completed sheet to finance, counsel, and — only after that — providers or incorporation advisers.

Input to collect	Owner
Country (and region, where law varies)	Founder / People
Worker status and classification screen	People + Legal
Work authorization status	Worker + Immigration counsel
Target start date	Hiring manager
Headcount by month over the horizon	Founder / Finance
Expected duration and permanence intent	Founder
Local revenue, contracts, licenses, premises	Founder / Finance / Legal
Regulated roles or activities	Legal / Compliance
Salary, benefits, currency, pay frequency	Finance + People
Contribution caps or floors in the country	Finance + Local advisers
Comparable EOR quote fields: fee, deposits, FX, one-time fees, notice terms	Finance + Provider
Entity setup and annual run costs: official fees + scoped adviser estimates	Finance + Local advisers
Internal labor hours, by role	Finance / Operations
Exit assumptions for each path	Finance + Legal

Do not score the sheet into a single total. Gates 2 to 6 — legality and operating model, classification, immigration, business activity, and entity need — are pass/fail: a failed gate overrides any favorable cost result, however the numbers land. Keep the completed sheet as the single reference document — every quote, adviser estimate, and internal debate should cite its assumptions rather than introduce new ones.

Confirm these terms in writing before you sign

Whichever path the worksheet points to, these terms decide what the arrangement costs to leave, and they are the ones least likely to appear in a headline price.

On the EOR path:

• Minimum contract term, and what happens if headcount falls below it
• Notice period on each side, and any early-termination charge
• Deposit or prefunding amount, and the date it actually returns relative to the final invoice
• FX rate source and any conversion margin, stated as a number
• Off-cycle payroll, immigration, and termination charges
• Which entity employs in each country, and whether it is owned or a partner
• What happens to employment contracts if you transfer employees out

On the entity path:

• The official registry fee schedule, including any urgency or trademark-linked surcharge
• A scoped run-rate estimate that states the headcount, filing calendar, and services it assumes

On the staged path, in addition to both:

• Whether the provider agreement permits transferring employees to your own entity, at what notice and what charge
• Whether that transfer preserves continuity of employment under the country's law, and what that does to notice and severance entitlements

Frequently asked questions

Is an EOR the same as a subsidiary?

No. A subsidiary is a legal entity you own, with its own governance, tax, and filing obligations, and "subsidiary" is not interchangeable with "branch" or "permanent establishment" — each has distinct legal and tax treatment. An EOR is a service arrangement in which a provider's local entity employs the worker under contract; you own nothing locally. Ownership, control, obligations, and exit costs differ on nearly every row of the comparison tables above.

Can an EOR prevent permanent establishment?

No. Permanent-establishment and corporate-tax exposure depend on your company's activities in the country, the applicable treaty, and national rules — not on who signs the employment contract. Some activity patterns are lower-risk than others, but that is an analysis for a qualified tax adviser, and no provider arrangement settles it.

Can an EOR sponsor a work visa?

Sometimes, and it is never safe to assume. Sponsorship depends on the provider, the country, and the visa route, and some countries do not permit a labor-leasing or dispatching employer to sponsor at all. A provider's country-coverage page is not evidence that it can sponsor there. Confirm in writing which entity would sponsor, under which route, and on what timeline before you make an offer, and take immigration counsel on the worker's specific case.

At what headcount does an entity become cheaper?

There is no universal number, and the published thresholds surveyed above disagree with each other by roughly six to one. The crossing point is an output of the break-even model: it moves with the country's setup and run costs, any contribution cap, the EOR's fees and deposits, internal labor, horizon, and exit assumptions. Run the model with verified inputs; if the inputs are unverified, the answer is "not established," not a rule of thumb.

Can employees move from an EOR to our own entity?

Commonly, yes — but the mechanics are governed by country law and the contracts involved, not by intent, and they may amount to a termination and rehire rather than a transfer. Plan new employment contracts, accrued rights, notice, benefits and payroll cutover, and any immigration transfers using the Six-Step Exit above, and take local advice before promising anyone continuity of service.

Your next step: complete the worksheet, confirm the country and worker gates, and work the Ten Risk Lanes for your country. Then take the branch that fits:

• If the worksheet points to an EOR — gather two or three comparable quotes against one assumption set, then compare EOR providers against your own criteria.
• If it points to an entity — request the official registry fee schedule and a scoped formation-and-run-rate estimate from a qualified local adviser, and put both into the model.
• If a gate is still open — escalate the classification, immigration, tax, or permanent-establishment question to counsel for that country before committing to either structure.

Sources and last verified date

Last verified: August 1, 2026

Next review: February 1, 2027

EOR Hub is an independent publisher and is not an employer of record, a law firm, or a tax or immigration adviser. This page is general information, not legal, tax, or immigration advice for any specific case. No provider is named or recommended on this page, and no commercial relationship affects anything stated here. Country statutory rates, official fees, and regulatory regimes on this page are rechecked at least semiannually, on each budget or tax-year change, and before any material update; provider terms are treated as quote-dependent and are not published here as figures.

• Contribuições para a Segurança Social — pagar como trabalhador por conta de outrem, Instituto da Segurança Social (gov.pt) — Portuguese employer contribution rate of 23.75% for private-sector employees, employee rate of 11%, and the monthly payment window; page updated May 26, 2026.
• Criar uma empresa online, Instituto dos Registos e do Notariado (gov.pt) — Portuguese company registration fees of €220 and €360 for non-urgent online filings.
• Código do Trabalho (Lei n.º 7/2009), consolidated text — Diário da República — Articles 263.º and 264.º, establishing the Christmas subsidy at one month's remuneration payable by 15 December and the holiday subsidy payable before the holiday period.
• Fundo de Acidentes de Trabalho — Autoridade de Supervisão de Seguros e Fundos de Pensões — Work-accident insurance is compulsory for employees in Portugal, and the absence of cover is punishable.
• 30-krotność — Zakład Ubezpieczeń Społecznych — Polish annual cap on the pension and disability contribution base, set at thirty times the projected average monthly wage and announced by ministerial notice.
• Jakie składki na ubezpieczenia społeczne płaci przedsiębiorca do ZUS — Biznes.gov.pl — The 2026 Polish ceiling of PLN 282,600, and the scope of that ceiling: it reaches pension and disability contributions only, and does not apply to accident or sickness insurance, to the Labour Fund, Solidarity Fund and Guaranteed Employee Benefits Fund, or to the health contribution.
• § 1 Arbeitnehmerüberlassungsgesetz (AÜG), Bundesministerium der Justiz — German permit requirement for labor leasing and the 18-month maximum assignment period, with the cumulation rule and collective-agreement derogation.
• § 8 Arbeitnehmerüberlassungsgesetz (AÜG), Bundesministerium der Justiz — German equal-pay principle and the limits on departing from it by collective agreement: nine months, or up to 15 months under a sector-supplement agreement with stepped increases.
• Wet toelating terbeschikkingstelling van arbeidskrachten — Nederlandse Arbeidsinspectie — Dutch admission requirement for companies hiring out workers, the corresponding duty on hiring companies, the public register, and enforcement from January 1, 2028.
• Hoe bereidt u zich voor op toelating — Toelating uitleenmarkt, Nederlandse Autoriteit Uitleenmarkt — Dutch transitional registration window from November 1, 2026 to January 1, 2027, the May 1 to June 30, 2027 application window, and assessment from July 1, 2027.
• Decreto de reforma en materia de subcontratación, Diario Oficial de la Federación — Mexican prohibition on personnel subcontracting and the specialized-services exception conditioned on registration in the public register (REPSE), Ley Federal del Trabajo arts. 12, 13 and 15.
• 劳务派遣暂行规定 (Interim Provisions on Labour Dispatch), MOHRSS Order No. 22 — State Council Gazette — Chinese restriction of dispatch to temporary, auxiliary and substitute positions and the 10% cap on dispatched workers as a share of total headcount; in force since March 1, 2014.
• Act on Securing the Proper Operation of Worker Dispatching Businesses and Protecting Dispatched Workers — Japanese Law Translation, Ministry of Justice — Japanese requirement for a worker-dispatching license from the Minister of Health, Labour and Welfare (art. 5), the three-year initial term and five-year renewal (art. 10), and the excluded categories of work (art. 4).
• Contract Labour (Regulation and Abolition) Act, 1970 — Chief Labour Commissioner, Ministry of Labour and Employment — Indian twenty-workmen application threshold, principal-employer registration, and the contractor licensing requirement.
• Contract Labour — Labour Department, Government of Haryana — Example of a state threshold above the central one, applying the Act at fifty workmen.
• Ley 14/1994, de 1 de junio, por la que se regulan las empresas de trabajo temporal — Boletín Oficial del Estado — Spanish rule that temporary placement of workers with a user company may be done only through an authorized temporary work agency, and the user company's joint and several liability where the placement rules are breached.
• Directive 2008/104/EC on temporary agency work, EUR-Lex — EU equal-treatment principle for agency workers and the limits on national restrictions; transposed differently in each member state.
• Temporary agency work — Your Europe, European Union — Named member states restricting agency work in specified hazardous tasks; an EU portal summary, not authority for EOR legality in any specific country.
• General employment terms and conditions — Your Europe, European Union — EU-level minimum employment-terms orientation; national law can impose higher standards.
• Registering as an employer and registering employees in another EU country — Your Europe, European Union — Employer and employee social-security registration, including that timing is set nationally and can precede the start date.
• Company tax in the EU — Your Europe, European Union — Company-tax rules are set by national authorities and differ by member state.
• Data protection under GDPR — Your Europe, European Union — Controller and processor roles and cross-border transfer safeguards within EU scope.
• Set up a limited company: step by step — GOV.UK — Representative UK formation steps: directors, shareholders, people with significant control, registration, and tax next steps.
• Running a limited company: your responsibilities — GOV.UK — Representative UK director duties for records, accounts, tax returns, and filings; delegation does not remove legal responsibility.
• Register as an employer — GOV.UK — UK requirement to register before the first payday, the two-month limit on registering early, and the late-submission route.
• File your company's annual accounts with Companies House — GOV.UK — Representative UK annual-accounts filing obligation.

The following pages are cited only as evidence of the headcount thresholds they themselves publish, and not as authority for any legal, cost, or comparative claim. All were checked on August 1, 2026.

• EOR vs your own US entity — Foothold America — States a threshold of six or more US employees.
• UK company size thresholds 2026 — Teamed — States a UK threshold at or below ten employees where entity running costs fall, and derives it from the publisher's own assumed per-employee EOR fee and entity run cost.
• Employer of record vs common law employer — Borderless — States a threshold of 10 to 15 employees per country.
• EOR vs entity decision-making guide 2026 — Team Up — States a threshold of 15 to 25 employees in a single country.
• EOR vs entity setup — Remote — States a threshold often at 15 to 25 or more employees.
• Employer of record vs own entity — Wisemonk — States a threshold of 25 to 35 employees per market and that the threshold moves with the provider's fee level.
• EOR vs entity setup — PamGro — States an India threshold of 25 to 35 employees, moving to 35 or more under its own flat fee.