Local Entity
A legally registered business presence in a country, such as a subsidiary or branch, that lets a company employ staff directly and take on local tax obligations.
Category: General
A local entity is the traditional route to hiring abroad. Through entity setup, you incorporate a subsidiary, register a branch office, or open a representative office. Each structure carries different rights and limits. Once your entity exists, you can run payroll, sponsor visas, and sign contracts as the legal employer.
What setting one up involves
Expect more than a registration form. You need local directors or representatives in many countries. You need a registered address, a corporate bank account, and tax and social security registrations. Accounting and legal support come before your first hire, not after. Timelines run from days in some markets to many months in others. Winding down often takes longer than setting up.
When an entity beats an EOR
Should you build an entity or use an Employer of Record? Ask yourself three questions. How many people will you employ there within two years? Is the market central to your long term strategy? Does your activity need licenses an EOR cannot hold? Strong answers point to an entity, because per employee costs fall as headcount grows. Weak answers point to an EOR, because fixed costs and permanent establishment exposure start on day one. Many companies begin with an EOR and transition later. Model the crossover point before you enter the market.