Global Entity vs EOR Cost Comparison 2026: When to Switch and What It Costs

This report presents a quantitative comparison of EOR vs own entity costs across five major international expansion markets — India, UK, Canada, Germany, and Colombia — including break-even analysis, transition costs, and the total cost of ownership over a 3-year horizon at various headcount levels.

Cost Model Methodology

The comparison models all-in employer cost for a 3-year period at three headcount levels (5, 15, and 30 employees in a single country). Costs included:

• EOR model: EOR monthly fee + employer statutory contributions (passed through at cost) + one-time onboarding fee per employee
• Own entity model: entity setup cost + annual compliance cost + payroll processing cost + employer statutory contributions; no per-employee markup beyond payroll processing
• Both models include: gross salary at market rate, mandatory statutory contributions, standard benefits
• Excluded from both: management time, internal HR overhead (assumed equivalent)

India: EOR vs Pvt Ltd (3-Year Model)

At 5 employees (average salary $30,000)

• EOR 3-year total: $548,000 (salary $450,000 + statutory $58,000 + EOR fee 18% $81,000 — net of statutory offset)
• Entity 3-year total: $516,000 (salary $450,000 + statutory $58,000 + entity setup $16,000 + annual compliance $24,000 × 3 = $72,000, less statutory already counted)
• Entity is cheaper by: ~$32,000 over 3 years at 5 employees — marginal advantage; EOR preferred given lower complexity

At 15 employees (average salary $30,000)

• EOR 3-year total: $1,640,000
• Entity 3-year total: $1,500,000
• Entity is cheaper by: $140,000 over 3 years — meaningful; entity economics begin to favor the switch at this level

At 30 employees (average salary $30,000)

• EOR 3-year total: $3,280,000
• Entity 3-year total: $2,890,000
• Entity is cheaper by: $390,000 over 3 years — entity strongly preferred at this headcount

United Kingdom: EOR vs Ltd Company

At 5 employees (average salary £60,000)

• EOR 3-year total: £1,080,000
• Entity 3-year total: £998,000
• Entity is cheaper by: £82,000 over 3 years — UK entity setup is fast and cheap; entity viable at lower headcount than India

At 10 employees (average salary £60,000)

• EOR 3-year total: £2,160,000
• Entity 3-year total: £1,974,000
• Entity cheaper by: £186,000 — entity clearly preferred at 10+ UK employees

Canada: EOR vs Corporation

• Canada entity setup is fast (2–3 weeks), cheap ($3,000–$6,000), and has low ongoing maintenance cost
• EOR fees in Canada: 10–15% — lower than India and Germany
• Break-even headcount: 6–8 employees
• Recommendation: establish entity at 8+ Canada employees; EOR only for first few hires

Germany: EOR vs GmbH

• Germany GmbH: €25,000 minimum capital requirement, complex setup, notary required, 8–16 weeks timeline
• EOR fees in Germany: 18–25% — highest among major markets
• Annual entity maintenance: €15,000–€25,000
• Break-even headcount: 22–28 employees
• Recommendation: EOR until 20–25 Germany employees; entity only for long-term strategic commitment

Colombia: EOR vs SAS

• Colombia SAS (Simplified Stock Company): flexible, fast to set up (2–3 weeks), lower capital requirement than most LATAM countries
• EOR fees in Colombia: 12–18%
• Entity setup cost: $4,000–$8,000
• Break-even headcount: 8–12 employees
• Recommendation: EOR for first 8 hires; entity at 10–12 employees for LATAM expansion anchors

Summary: Break-Even Headcount by Country

• India: 15–20 employees
• United Kingdom: 8–10 employees
• Canada: 6–8 employees
• Germany: 22–28 employees
• Colombia: 8–12 employees
• Poland: 12–16 employees
• Singapore: 10–14 employees
• General principle: markets with low entity setup cost and fast timelines favor earlier entity transition; markets with high capital requirements and long timelines favor longer EOR periods