At what point does an EOR make more sense than opening a local entity?
Summary: Anthony Fox is considering whether to use an Employer of Record (EOR) for hiring employees from a European country or to start a local company as part of their expansion strategy. They highlight that using an EOR could be advantageous in the early stages because it manages payroll and local employment without the need to immediately establish a legal entity. They seek advice from others who have used EORs, particularly regarding the number of hires made through an EOR before transitioning to establishing a local entity.
We want to make a couple of hires outside our country, and I’m trying to work out if using EOR is actually more logical then to consider starting a local company.
Right now, these employees will all be from one European country, followed by another hire cycle a few months later, in which I'm not sure if they would be from the same country.
Starting separate entities before we know whether those markets will grow doesn’t seem sustainable.
I’ve been comparing a few EOR providers and explored more about how EOR setup could work.
The EOR seems useful for the early stage because payroll and local employment are handled without us creating an entity immediately.
Is it worth starting with EOR setup, and what would you take care about?
For anyone who’s done this as an employer, how many people did you hire through an EOR before moving to your own entity?
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