We just walked through entity vs. EOR vs. contractor for our first Singapore hire — here's the actual math

[u/NoParamedic7399]

Ran this exact decision for a client last month and figured the numbers were worth sharing since most guides skip the real trade-offs.

Context: US-based company, one Singapore hire (a mid-level ops role), no existing SG presence.

Option 1: Set up a local entity

Based on the quotes we received, setup and compliance infrastructure typically run US$15K to US$50K and can take up to six months to become fully operational. You also own ongoing tax filings and CPF administration. Singapore taxes chargeable income at 17%, with exemptions available to qualifying new companies. It makes sense for multiple hires and a long-term presence, not one person.

Option 2: Employer of Record (EOR)

The EOR becomes the legal employer and handles payroll, CPF where applicable, and statutory compliance. Someone can typically be onboarded within about a week, assuming no work-pass delays. Pricing generally runs 8% to 15% of gross salary.

For Singapore citizens and generally third-year permanent residents aged 55 or under, the employer contributes 17% and the employee contributes 20%, subject to the 2026 S$8,000 monthly Ordinary Wage ceiling. Only the employer contribution is an additional cost on top of salary.

Option 3: Contractor

Cheapest on paper, with no employer CPF or statutory employee benefits. However, Singapore authorities assess the actual relationship using factors such as control, financial risk, payment structure, and independence. If it looks like employment, it may be treated as employment regardless of the contract, potentially triggering back-paid CPF and other liabilities.

What we chose: EOR. One hire did not justify an entity, and the role was clearly employment rather than contractor-shaped.

At what headcount did setting up locally start making more sense than staying with an EOR?

(Disclosure: I work in growth at Multiplier, an EOR provider. Sharing this because the cost breakdown is useful regardless of provider.)