Global Employment Models – EOR and Local Entity We see two primary models when expanding internationally. With an EOR, a trusted partner becomes the legal employer for your workforce, handling local regulations, payroll, and benefits. In contrast, establishing a local entity means forming a legal branch in a new country, where you assume full responsibility for compliance and operations. Both models offer distinct advantages. An EOR accelerates market entry and minimizes upfront costs. Establishing an entity gives you direct control and may be more cost-effective with large headcounts over time. Detailed Cost Comparison We break down the cost factors for each model to clarify financial impacts. Upfront and Ongoing Expenses EOR Model: Transparent Monthly Fees: You pay a flat fee per employee. This fee covers recruitment, payroll processing, tax filings, and compliance. Speed to Market: Onboarding can occur in as little as 24 hours, eliminating the need for lengthy setup. Lower Upfront Investment: No significant legal or registration fees are incurred. Fixed Cost Structure: Budgeting is simplified by predictable monthly expenses. Entity Model: Legal and Professional Fees: Establishing an entity involves legal fees, tax advisory, and registration costs that can run into thousands of dollars. Administrative Overhead: You manage ongoing expenses such as local director salaries, office space, and administrative services. Time-Intensive Setup: Forming an entity can take months or even a year. During this period, additional costs accumulate. Capital Requirements: Some jurisdictions require a minimum share capital, increasing initial financial outlay.