Entity setup
is establishing your own legal presence in a country — typically a subsidiary — to employ staff, contract locally and book revenue. It brings control and permanence at the price of capital, time (weeks to months) and standing obligations: accounting, filings, audits and payroll infrastructure.
Entity or EOR — the practical break-even
An entity pays off when the country is strategic: local revenue, 10–20+ staff, licences requiring local presence, or activities an EOR cannot host (regulated sales, government contracting). Below that, entity overhead — incorporation, capital (CHF 20,000 for a Swiss GmbH), accounting, audits, payroll setup, eventual liquidation — outweighs EOR fees.
The common path is sequential: enter via EOR, build the team, incorporate when scale justifies, then migrate employees with continuity of service. Ask providers about the migration mechanics before you need them.
Related terms: branch vs subsidiary, permanent establishment risk
FAQ
How long does entity setup take?
From days (UK, Singapore registrations) to months where notaries, capital deposits, bank accounts and licences queue — Switzerland, Germany and the UAE mainland commonly run 4–12 weeks to a payroll-ready entity. Bank-account opening is the underestimated step everywhere.
What are the ongoing costs of a dormantish entity?
Accounting and filings, audit where thresholds bite, registered office, minimum taxes and levies, plus payroll infrastructure if anyone is employed — commonly EUR 10,000–30,000 a year before anyone is paid. Entities left ‘just in case’ quietly consume this annually, which is why exits and liquidations deserve real decisions.