The five hidden costs of setting up entities abroad
Why DIY global expansion almost always costs more than EOR — even at scale.
The argument for setting up your own entity in a new country is usually about scale: "once we have ten people there, an EOR's per-employee fee is more than running our own subsidiary." Math-wise that's true if you only count the recurring EOR fee. Reality is messier.
"The honest tipping point for DIY entity is somewhere around 25 employees, not 10. And even then, only if you're sure you're staying."
Cost one: setup is $15–80k and 3–9 months, depending on country. That's months of hiring frozen unless you use an EOR in parallel.
Cost two: a local accountant on retainer for monthly filings ($800–2,500/mo). Cost three: a payroll provider with country-specific compliance ($300–800/mo). Cost four: an annual audit ($5–15k). Cost five: someone on your team — usually a Finance leader — spending 5–10 hours a month managing all of the above.
Stack those up and a 10-employee subsidiary typically runs $40–80k/year in overhead before salaries. EOR for the same 10 people: $24–60k. And EOR adapts instantly when you scale up or down — try shutting down a subsidiary in Germany when you over-hired.
The honest tipping point for DIY entity is somewhere around 25 employees, not 10. And even then, only if you're sure you're staying.
Sana has built finance ops at venture-backed startups in the US, UK, and UAE.
