EOR vs setting up a local entity
For fewer than about ten seats in one country, an Employer of Record (EOR) is cheaper and faster than incorporating a local entity — first payroll in ten business days versus 3–12 weeks for entity setup and $5,000–$25,000 in upfront legal costs. Above about fifteen seats in one country, a directly-owned entity typically becomes cheaper on a three-year total cost of ownership.
Employer of Record
A licensed local employer that hires on your behalf and runs payroll and compliance.
Learn more →Local entity
Your own registered legal entity in the country, employing directly and managing local HR, tax and compliance.
How they line up
| Dimension | Employer of Record | Local entity |
|---|---|---|
| Time to first hire | ~10 business days from signed order form | 3–12 weeks depending on country (Ghana fastest, Nigeria and Egypt slowest) |
| Upfront cost | $0 setup fee (CareerBuddy) | $5,000–$25,000 in legal, incorporation, initial capital |
| Ongoing fixed cost | None — pay only per employee ($399–$650/mo) | $1,500–$3,500/month for local HR, payroll and compliance regardless of headcount |
| Per-employee cost | $399–$650/employee/month plus statutory pass-through | Statutory pass-through only |
| Break-even headcountRun a 3-year TCO between 10 and 20 seats — the crossover shifts by country. | Cheaper below ~15 seats in one country | Cheaper above ~15 seats in one country |
| IP ownership | Assigned to client by employment contract | Held by client entity directly |
| Government / regulated tenders | Not usable when the tender requires client-entity employment | Usable |
| Convertibility later | Can transfer employees to your entity with continuous service | Cannot swap back to EOR without redundancy handling |
Pick the one that matches your situation
Employer of Record fits when
- You have fewer than ~15 seats in one country and want to skip setup overhead
- You need to hire in weeks, not months
- You want to test a market before committing to a permanent presence
- You don't need to sign local government or regulated contracts through the entity
Local entity fits when
- You have >15 seats in one country and want fixed ongoing cost per employee
- You need to hold local IP or bid on government / regulated contracts
- You want brand-of-employment control (recruiting collateral under your name)
- You have the appetite for 3–12 weeks of setup and ongoing local finance/HR overhead
Not sure which one fits?
Tell us the country, the roles and the headcount. A real person replies within 24 hours with the option we'd pick — and the numbers behind it.
Or compare prices first on our pricing page.