Navigating Canadian Market Entry: EOR vs. Entity Establishment

In today's globalized economy, expanding into international markets like Canada is a strategic imperative for businesses seeking growth. However, companies face a critical decision: establishing their own legal entity or partnering with an Employer of Record (EOR) provider. This analysis examines both approaches from a cost and operational efficiency perspective.

Cost Comparison: Traditional Entity Setup vs. EOR Solution

Establishing a Canadian entity involves significant upfront and ongoing expenses. Companies must budget for registration fees, corporate secretarial services, bank account setup, and compliance requirements. These costs can quickly accumulate, particularly for businesses with limited Canadian market experience.

Expense Category	Entity Setup Costs	SailGlobal EOR Costs
Initial Setup	Approximately $5,000 USD	Minimal setup fee
Annual Compliance	$25,000+ USD	$5,000 per employee annually
Payroll Management	$6,000+ USD annually	Included in service fee
Tax Compliance	$4,000+ USD annually	Handled by EOR provider

When EOR Services Deliver Maximum Value

For companies with 1-5 employees in Canada, EOR services typically offer substantial cost savings. Consider these scenarios:

Single Employee: Traditional setup costs approximately $25,000 annually versus $5,000 with SailGlobal EOR
2-5 Employees: EOR services can save up to $15,000 annually compared to entity establishment
5+ Employees: Entity establishment may become more cost-effective for long-term operations

Beyond Cost: Compliance Advantages of EOR Services

Canada's employment landscape requires strict adherence to regulations including Canada Pension Plan (CPP), Employment Insurance (EI), and Workers' Safety Insurance Board (WSIB) requirements. SailGlobal's EOR service ensures full compliance with these mandates, reducing legal risks for expanding businesses.

Competitive Analysis: SailGlobal vs. Other Providers

When evaluating EOR providers, transparency and hidden costs are critical considerations. SailGlobal offers clear pricing at approximately $449 monthly per employee, with no unexpected charges for VAT, bonus processing, or termination fees that competitors often include.

Service Feature	SailGlobal	Competitor A	Competitor B
Monthly Fee	$449 USD	$599 USD	13% of payroll
Hidden Fees	None	Multiple additional charges	Various extra costs
Contract Flexibility	High	Limited	Moderate

Strategic Recommendations for Market Entry

Companies should consider EOR services when testing the Canadian market, managing small teams, or prioritizing compliance assurance. For established operations with significant employee counts, entity establishment may offer better long-term value. SailGlobal's transparent pricing model provides businesses with predictable costs and comprehensive support throughout their Canadian expansion journey.

Canada Market Entry: EOR vs Entity Setup Cost Analysis 2024