Entity Setup vs EOR in Ireland: Complete Comparison Guide 2025

Even though we don’t provide entity setup services, let’s walk through what’s actually involved—because understanding this helps you compare fairly.

Most common entity structure: The Private Company Limited by Shares (LTD) is the most appropriate structure for most businesses, offering flexibility and simplified governance requirements.

Step-by-Step Entity Setup Process

1. Choose and register company name

The standard incorporation fee is €50 when filing electronically, which covers the registration of your company name and official incorporation documents. The name must be unique and not too similar to existing Irish companies registered with the CRO (Companies Registration Office).

2. Appoint directors and company secretary

One of the directors is required to be resident in a member state of the European Economic Area (EEA). If you don’t have an EEA-resident director, the bond must be in place for a two-year period and is to the value of €25,000. The Section 137 bond is actually insurance, not cash you need to tie up. A Section 137 bond costing €1,500-€2,000 can be obtained to satisfy this requirement. You’ll need to renew it every two years at approximately €1,600.

You also need a company secretary (can’t be the same person as the sole director if you only have one director).

3. Secure registered office address

Every Irish company must maintain a registered office address in Ireland, with services available from companies like Open Forest for €199 per year for those without physical premises. This can be a virtual office—you don’t need physical space if you’re remote-first.

4. Submit incorporation documents

File Form A1 and your constitution with the CRO. Standard registration takes 10 working days. Professional services can expedite to 5 days.

5. Register for taxes

Once incorporated, register with Revenue Commissioners for:

• Corporation Tax
• Employer taxes (PAYE/PRSI)
• VAT (if applicable)

6. Open Irish bank account

Digital banks can usually be opened in 1 week. Traditional bank accounts can take up to 4 weeks. Many traditional Irish banks require an in-person meeting with at least one director, though digital options like Revolut Business offer faster remote setup.

Total Realistic Timeline

Minimum: 5-6 weeks if everything moves quickly and you use expedited services

Typical: 8-12 weeks from decision to first employee on payroll, accounting for:

• Name reservation and document preparation (1 week)
• CRO processing (1-2 weeks)
• Tax registrations (1-2 weeks)
• Bank account opening (1-4 weeks)
• Payroll system setup (1-2 weeks)
• Buffer for inevitable delays or additional requirements

What can slow you down:

• Obtaining director identification numbers (VIN) for non-residents: The IPN application process typically takes 2-3 working days once all required documentation has been correctly submitted
• Bank account opening if you need a traditional bank and can’t travel to Ireland
• Coordinating professional services (accountant, payroll provider, company secretary)

Ireland EOR Costs

Most Ireland EOR providers charge a one-time onboarding fee, typically ranging from €500 to €1,000, depending on the provider and the service package. In addition, you’ll pay a monthly fee per employee, usually between €500 and €1500.

Typical EOR pricing structure:

What’s typically included:

• Compliant employment contracts
• Monthly payroll processing
• All tax withholding and filing (PAYE, PRSI, USC)
• Statutory benefits administration
• Employment law compliance updates
• HR support and guidance
• Employee queries and support

Break-Even Analysis

Here’s the math that matters:

Scenario 1: Hiring 1 employee

• Entity: €6,000-€13,000 (Year 1: setup + annual costs)
• EOR: €6,000-€18,000 per year (€500-€1,500/month × 12)
• Winner: Depends on EOR pricing tier—often comparable Year 1, EOR more flexible

Scenario 2: Hiring 3 employees

• Entity: €6,000-€13,000 per year (same costs, spread across 3 people)
• EOR: €18,000-€54,000 per year (3 × €500-€1,500/month × 12)
• Winner: Entity starts becoming more cost-effective

Scenario 3: Hiring 10 employees

• Entity: €7,000-€15,000 per year (slightly higher accounting/payroll costs)
• EOR: €60,000-€180,000 per year
• Winner: Entity is significantly cheaper

The general break-even point: Around 5-10 employees, entity setup becomes more cost-effective than EOR from a pure financial perspective. Below 5 employees, EOR often makes sense unless you’re certain about long-term Irish presence.

But cost isn’t everything. Factor in:

• Speed: Can you wait 8-12 weeks or do you need to hire now?
• Flexibility: Might you scale down?
• Internal resources: Do you have HR/finance capacity to manage Irish compliance?

Let’s talk about what happens after setup—because that’s where the real work lives.

With Your Own Irish Entity

You’re responsible for:

Payroll (monthly):

• Calculate gross to net pay for each employee
• Deduct PAYE tax, USC, and PRSI correctly
• Submit Real-Time Tax (ROS) returns to Revenue on or before every pay date
• Must be filed on or before every pay date
• Pay taxes by 23rd of following month

HR Administration (ongoing):

• Maintain employment contracts compliant with Irish law
• Track and administer annual leave (statutory minimum: 4 weeks)
• Manage sick leave, maternity/paternity leave, force majeure leave
• Update policies when employment law changes
• Handle disciplinary and grievance procedures correctly
• Respond to employee queries about rights and entitlements

Compliance Filings:

• Annual Return to CRO (within 56 days of Annual Return Date)
• Financial statements filed with Annual Return
• Corporation Tax return (CT1) annually
• Employers must reconcile annual payroll with Revenue by mid-February of the following year

What happens if you get it wrong?

• Late CRO filings: Late filing triggers automatic late filing penalties (€100 plus €3 per day)
• Payroll errors: Interest, penalties, and potential Revenue investigation
• Employment law breaches: Potential Workplace Relations Commission cases, unfair dismissal claims
• Incorrect contractor classification: Back-pay of employment rights, taxes, penalties

Internal resource requirements:

You’ll need either:

• Part-time finance/HR person (10-15 hours/week for 1-5 employees)
• Or professional services (accountant, payroll bureau, HR consultant)
• Or senior management time handling it themselves (often underestimated cost)

With EOR

Peak handles:

• All payroll calculations and processing
• All tax withholding, filing, and payments
• All compliance monitoring and updates
• Employment contract templates and updates
• Statutory benefits administration
• Employee queries about contracts, pay, leave
• Revenue correspondence and filings
• Annual compliance reporting

You still manage:

• Finding and interviewing candidates
• Making hiring and termination decisions
• Day-to-day work management
• Performance and development
• Compensation changes (we process them)
• Company culture and team building

Trade-off: You pay for convenience and expertise, but you reduce internal burden and compliance risk. For companies without Irish HR expertise, this risk reduction is valuable.

When EOR Is the Better Choice for Irish Hiring

Now, when does EOR make more sense?

Use an EOR when:

1. You’re hiring 1-10 people initially

The math works. You’re paying for exactly what you need, with no wasted overhead. Per-employee EOR fees are comparable to or better than entity costs divided by small employee count.

2. You need to hire quickly (candidate waiting)

Entity setup takes 8-12 weeks. An employer of record enables you to quickly hire and onboard workers in Ireland—often in as little as two weeks. If you have a great candidate who won’t wait, EOR wins.

3. You’re testing the Ireland market

Not sure if Irish hiring will work long-term? EOR gives you flexibility to:

• Try hiring in Ireland without major commitment
• Scale up if it works, scale down if it doesn’t
• Transition to entity later if you decide to stay (we can help with that)

4. You’re remote-first with no physical presence needed

If your Irish employees work from home and you don’t need office space, Irish business registration, or local contracting, why build infrastructure you won’t use?

5. You lack internal HR/finance resources for Irish compliance

Managing Irish employment law, Revenue requirements, and payroll correctly requires:

• Knowledge of Irish regulations (which change regularly)
• Time to process monthly payroll and filings
• Ability to respond to employee queries and compliance issues

If you don’t have this capacity in-house, the “cost savings” of entity setup become expensive mistakes.

6. You value flexibility and want to avoid exit complexity

To hire an Irish employee directly, you would need to set up an entity in the country. Establishing foreign entities can be time-consuming and costly for businesses, so using an EOR to bring on Irish workers will save your business time and money. If business circumstances change (market conditions, strategic shifts, funding), scaling down or exiting Ireland through EOR is much simpler than closing an entity.

7. You’re hiring across multiple countries

If Ireland is one of 5-10 countries you’re hiring in, using EOR for all of them creates consistency. Managing 10 different entities in 10 countries is significantly more complex than one EOR partner.