When should a Nordic company move from EOR to its own Italian company?

An Employer of Record (EOR) is a way to start, not always a way to stay. Many Nordic companies use an EOR for their first Italian hires and later set up an Italian srl or a branch. The question is when.

There is no single headcount that answers it. The answer depends on what the Italian team does and how stable the plan is.

Signals that it is time  

The team is large and stable. With several employees and a multi-year plan, the fixed costs of an Italian company are spread over enough people.

Italian staff sell and sign in your name. If your Italian employees regularly negotiate and conclude contracts with Italian customers, you may create a permanent establishment for tax purposes. At that point a local company or branch is often the cleaner structure.

You need a legal presence. Public tenders, certain licences, product registrations, or customers who require an Italian counterparty.

You want an office. Leasing premises, local bank accounts and supplier contracts are simpler with your own entity.

Group policy. Some Nordic groups require their own entity once a country passes a certain size or revenue.

Signals that it is not yet time  

• The plan is still uncertain.
• The team is small or distributed across Italy.
• Staff do engineering, support or back-office work rather than local sales.
• You expect to expand into other countries next and prefer one model for all of them.

What setting up involves  

An Italian srl or branch requires incorporation, a bank account, registration with the tax agency, INPS and INAIL, a payroll provider or in-house payroll, an accountant, statutory accounts and annual filings. It takes months, and the costs stay even if the team shrinks.

Plan it as a project: legal set-up, payroll set-up, accounting, and only then employee transfer.

How employees move  

The transfer is a change of employer, not a new hire. Done properly:

• seniority is kept;
• the CCNL and level normally stay the same;
• accrued holiday and hours off are carried over or settled;
• the TFR either moves or has already been paid monthly into the employee’s pension fund, which makes the transfer simpler.

The employees sign with the new company, and we close our contracts on the same date. No gap, no new probation.

Running payroll after the move  

You can run payroll yourself, use a local provider, or keep us: we run payroll for Italian entities at €55 per payslip, with the same team your employees already know.

A hybrid model  

Some companies keep the EOR for new cities or roles while the entity covers the core team. This is common when the Italian company is in Milan and new hires are remote elsewhere.

Questions to ask  

1. How many people will we have in Italy in two years?
2. Do they conclude contracts with Italian customers?
3. Do we need an Italian legal counterparty?
4. Who will run payroll and accounts?
5. How certain is the plan?

Questions we hear from Nordic companies  

Can we keep some employees on the EOR after setting up the company? Yes. A hybrid model is common, especially for remote employees in other cities or for roles you are still testing.

Do employees need to agree to the transfer? They sign a new contract with your company. In practice, with seniority and terms preserved, most employees welcome the move. Communicate early and clearly.

What happens to the probation period after the transfer? None is needed. The employee keeps their seniority, so a new probation period would not be appropriate. Confirm this in the transfer documents.

In short  

Move to your own Italian company when the team is large and stable, when Italian staff conclude sales, or when you need a legal presence. Stay with an EOR while the plan is uncertain or the team is small and distributed. Plan the entity as a project, transfer the employees with their seniority, and decide who will run payroll before the first transfer date. A hybrid model is often the practical middle ground.

For the comparison of models, see EOR, own company or freelancers . For pricing of both services, see pricing .