Make the business case country by country
Consider expected headcount, duration in the market, commercial activity and the capacity of your HR and finance teams. A global average can hide a very different case in each country.
- Entity setup, accounting, tax, payroll and administrative costs.
- Local management, employment-law support, insurance and benefits.
- Internal time and responsibility for employee issues.
- A realistic growth case and the cost of later closing the entity.
Confirm employer readiness
Check the entity’s ability to employ and pay people before committing to a transfer date. Formation and employing readiness are separate milestones.
- Employer, payroll-tax and social-insurance registrations.
- Banking and payroll funding arrangements.
- Employment contracts, policies and benefit enrolments.
- Sponsorship permissions and employee work authorisation.
Build a handover around the first correct payroll
Work backwards from the intended payday. Give each dependency an owner and a decision date; do not turn an illustrative timetable into a guarantee.
- Confirm the lawful employment-transfer mechanism before issuing resignation instructions.
- Record original service dates, accrued leave, contracts, benefits and pension differences.
- Check consultation, immigration, registrations and employee communications.
- Reconcile outgoing and incoming payroll calculations and securely hand over necessary records.
Compare the invoice and the funding
Price the same workforce, countries and service scope. An attractive management fee can sit beside a costly FX spread, deposit or exit commitment.
- Management, payroll-based, benefits, setup and offboarding charges.
- FX reference rate, fixing time, charge percentage and the actual conversion base.
- Bulk discount thresholds, eligible fees, term, country pooling and minimum seats.
- Outstanding deposits, new prefunding, refund dates and overlapping charges.
Common questions
At what headcount should we move from an EOR to our own entity?
There is no universal headcount threshold. Compare expected workforce growth and time in the market with setup, payroll, tax, administration, benefits and internal support costs. Include transition expenses and the cost of later closing the entity.
Does moving to our own entity reset employees’ service history?
Do not assume service history resets. Establish the local transfer mechanism and record original service dates, accrued leave and employment terms. In a UK transfer covered by TUPE, continuous service and protected contractual terms can pass to the receiving employer.
Sources and how to use this guide
General planning guidance. Rules depend on the country and actual arrangement; use the country guides and local specialists to determine applicability.