Employer of Record (EOR) vs. Setting Up Your Own Entity in South Africa – What’s the Best Fit for You?

Expanding into South Africa is a smart move for International companies, offering access to high-quality talent at a fraction of the cost. But the big question remains:

👉 Should you use an Employer of Record (EOR) or set up your own entity?

Here’s a simple breakdown to help guide your decision.

1️⃣ Less Than 5 Employees → EOR Is the Best Option

✅ No need to set up a legal entity.
✅ Immediate compliance with local labor laws.
✅ A simple, low-risk way to test the market.

For companies unsure about long-term plans, an EOR remains a strong option even beyond 5 employees.

2️⃣ 5 to 10 Employees → Either Can Work

✅ If flexibility and speed are key, an EOR still makes sense.
✅ If you plan to grow and establish a long-term presence, setting up an entity might be worth considering.
✅ This is also the ideal time to explore a seamless transition plan, should you want to switch from EOR to your own entity later.

3️⃣ 10+ Employees → Setting Up an Entity Becomes More Cost-Effective for Most

📉 Cost Savings: The monthly cost of running your own entity with Finovate’s structure is typically 50% lower than ongoing EOR fees.
⚡ Fast ROI: The setup costs of an entity are usually recovered within a few months via Finovate. We believe your entity is an strategic asset.
🔹 Long-Term Control: You gain full control over HR, contracts, and employment structures, allowing for better integration with your global operations.

4️⃣ Why Finovate’s Solution Rivals the EOR Model

A major concern with setting up your own entity is that it can be slow and complex, particularly with banking, compliance, and local representation. That’s where Finovate bridges the gap—delivering a seamless, EOR-level experience while unlocking the cost benefits of your own entity.

✅ We deliver an fully compliance operational structure within 3 months, where the market average currently is 9 months.
✅ Banking & Payments: We help set up business bank accounts quickly, minimizing delays.
✅ Compliance & Legal: Our team ensures full compliance with South African regulations, tax, and labor laws.
✅ Local Public Officer Role: We provide a trusted local presence so you meet compliance requirements without needing to relocate personnel.
✅ Retainer: We do not just focus on setup, We run a retainer with you that covers payroll, banking, finance, tax, financials, meetings, manaccs, cosec, IR and cross border support and more…

5️⃣ The Best Approach? Structure follows Strategy.

The best choice depends on your strategy. We are interested in your strategy and we will provide the right path for you to follow. Whether it’s via an EOR or your own entity.