To hire abroad, a UK company has three main routes. Use an EOR to employ a known person quickly without setting up locally, while you manage them yourself. Set up your own foreign entity when you are scaling heavily in one country long-term and want full ownership. Use a managed team when you want a dedicated, vetted team that someone else employs, manages and retains for you, under one UK contract. The right choice depends on headcount, time horizon, how much management you want to keep, and your appetite for compliance work.
This guide lays out all three with a clear decision table, so you can pick the route that fits your goals.
What are the three ways UK companies hire abroad?
Hiring across borders comes down to who employs the worker, who manages them, and how much local infrastructure you take on.
- EOR (Employer of Record): A third party legally employs the worker in their country and runs payroll, tax and benefits. You recruit and manage. Fast, low commitment, no entity needed, but you still own people management and you pay a per-employee fee.
- Own foreign entity: You incorporate a subsidiary or branch abroad, become the legal employer, and run local payroll, tax, HR and compliance yourself. Maximum control and best unit economics at scale, but the slowest, most expensive route to set up and maintain.
- Managed team: A provider vets, employs, manages and pays a dedicated team that works only for you, under a single UK contract, and is accountable for delivery. No entity, no foreign employment liability, and management handled for you.
OSCABE is the managed-team route, delivering dedicated professionals and teams in India and the UAE/Middle East to UK and EU companies. If you later decide you want to own the operation, OSCABE also runs Build-Operate-Transfer and GCC programmes that bridge to your own entity. See managed teams and how it works.
How do EOR, own entity and a managed team compare?
This decision table uses realistic 2026 figures. Costs assume a mid-to-senior engineer or small team and vary by country, role and scale.
| Factor | EOR | Own foreign entity | Managed team (OSCABE) |
|---|---|---|---|
| Who employs the worker | EOR entity abroad | Your subsidiary | OSCABE (UK contract) |
| Who manages the work | You | You | OSCABE, to your goals |
| Time to start | 1-4 weeks | 3-9 months | Days to a few weeks |
| Setup cost | Minimal | £15,000-£50,000+ to incorporate | None |
| Ongoing cost (per engineer) | Local salary + ~£500 fee | Salary + local overheads | From £2,000/month all-in |
| Recruitment included | No | No | Yes (vetting and hiring) |
| Local compliance burden | EOR handles | You handle fully | OSCABE handles |
| IR35 position (UK) | Low (employed abroad) | Low (employed abroad) | Low (managed B2B service) |
| Control over operation | Medium | Highest (you own it) | High (exclusive to you) |
| Best for | 1-5 known hires per country | 20+ roles, long-term in one country | Dedicated managed team, low overhead |
The pattern is clear. An EOR is fastest and lightest for a handful of known hires. Your own entity gives the best control and economics only at real scale, and only after months of setup and ongoing compliance work. A managed team gives you a dedicated, managed operation with no entity, no setup cost and the lowest ongoing cost per head for most situations. Compare the talent economics in India vs UK developer salary comparison.
When should a UK company use an EOR?
Use an EOR when you have one to a few known hires in a country, you want to start in weeks not months, and you are happy to manage the people yourself. It is the cleanest way to employ someone compliantly abroad without the cost and delay of incorporation.
The strengths are real: broad country coverage, fast onboarding and local employment compliance handled. The limits are equally real. You still recruit, manage, and own retention, and per-employee fees of around £500 per month add up across a team. An EOR is infrastructure, not a delivery partner. For a platform-level view, see Deel vs Remote vs OSCABE.
When should a UK company set up its own entity?
Set up your own foreign entity when you are committing to significant, long-term headcount in a single country (commonly 20+ roles), you want full ownership of the team and IP, and the unit economics at scale justify the overhead. Past a certain size, owning the operation can be cheaper per head than paying EOR fees on many employees.
Be clear-eyed about the cost of entry. Incorporation, legal and accounting setup commonly runs £15,000-£50,000 or more, takes three to nine months, and then leaves you running local payroll, HR, tax filing and employment compliance indefinitely. This route rewards scale and patience; it punishes companies that incorporate too early. A lower-risk path to the same end is Build-Operate-Transfer, covered in staff augmentation vs managed team vs BOT.
When should a UK company use a managed team?
Use a managed team when you want a dedicated, vetted team that performs like your own but without becoming a foreign employer, running local compliance, or managing remote staff day to day. It is the route that gives you offshore capability and economics with the least overhead and risk.
With OSCABE you sign one UK B2B contract. We recruit and vet in India and the UAE/Middle East, employ and pay the team in local currency, provide equipment, and manage performance and retention against your roadmap. Pricing is transparent: from £2,000 per managed remote employee, from £7,500 per managed pod, and from £12,000 for BOT or GCC programmes, in GBP or EUR. The engagement is IR35-friendly, UK GDPR compliant and ISO 9001:2015 certified. Browse the roles we cover or examples like hire DevOps engineers in the Netherlands and hire Python developers in the UK.
What about IR35 and data protection when hiring abroad?
For UK buyers, all three routes can sit outside IR35 when structured correctly, but for different reasons. With an EOR or your own entity, the worker is employed abroad, so the off-payroll working rules generally do not apply. With a managed team, the engagement is a genuine outsourced B2B service supplied by OSCABE, which employs and directs the workers. See IR35 and offshore developers in India.
On data protection, the ICO expects appropriate safeguards whenever personal data is processed outside the UK, regardless of route. A managed team simplifies this because one accountable provider sets the controls under one contract; OSCABE operates under UK GDPR with documented terms and ISO 9001:2015, and OSCABE LTD is verifiable on Companies House. More in GDPR when hiring offshore developers.
Frequently asked questions
Is an EOR cheaper than setting up my own entity?
For small numbers of employees, yes. An EOR avoids £15,000-£50,000+ in setup and months of work, charging local salary plus roughly £500 per employee per month. Your own entity only becomes cheaper per head at scale, typically 20+ employees, once setup and ongoing compliance costs are spread across many staff.
How long does it take to start hiring abroad with each option?
An EOR can have someone employed in one to four weeks. A managed team can be running in days to a few weeks. Setting up your own foreign entity typically takes three to nine months before you can compliantly employ anyone. See the true cost of an offshore development team for the fuller picture.
Does a managed team avoid the need for a foreign entity?
Yes. With a managed team, OSCABE is the employer and the UK-contracting party, so you never incorporate abroad, run local payroll, or take on foreign employment liability. If you later want your own entity, OSCABE's BOT and GCC route can transfer the operation to you.
Which option is most IR35-friendly for UK companies?
All three can be IR35-friendly when set up correctly. EOR and own-entity hires are employed abroad, and a managed team is a genuine outsourced service supplied by OSCABE. Always confirm your specific facts against the HMRC off-payroll guidance, or read EOR vs managed service vs staff augmentation.
Choosing how to hire abroad
For one to a few known hires, an EOR is fast and light. For long-term, large-scale commitment in a single country, your own entity gives the most control once you accept the setup cost and compliance load. For a dedicated, managed team with no entity, no setup cost and the lowest overhead, a managed team is the strongest all-round route, and it can bridge to your own entity later if you choose.
OSCABE delivers managed teams, and the BOT path to your own entity, from India and the UAE/Middle East to UK and EU companies. See transparent pricing, options for EU clients, or contact us to map the right route to your hiring plans.