Our European startup plans to hire our first employees in Canada but we are unsure whether to establish a local entity immediately or begin through another arrangement. What factors should be considered when deciding between opening a subsidiary and using an external employment solution?

The decision usually depends on how many employees you expect to hire and how long you plan to operate in that market. Some companies begin with flexible employment structures and only open a full legal entity once the business volume justifies the additional legal and accounting costs.

Many organizations initially choose employer-of-record or similar services to test new markets before registering a subsidiary. You can explore examples and explanations at Team Global https://teamglobal.ca/, where different international expansion options are described. This approach allows companies to hire quickly while maintaining legal compliance, then transition to their own entity once long-term growth is confirmed. It reduces upfront administrative investment and gives leadership time to evaluate staffing needs, tax exposure, and operational scale.