Once you have decided to set up a new business, the first choice is, obviously, setting up at least one entity (this could be an LLP or a company, if you want the benefit of limited liability). Unless there is certain specific tax advantage available to you or your business (from a tax haven), your most natural choice is likely to the country of your domicile. But, the matters may not end there. As your business expands beyond borders, whether for the reason of exploring a new market, or, because you found a great team people in another country, or, both, you are faced with that inescapable quandary- how do you approach this new geography? 

As with all things business, there is no one simple answer. It really depends on how this new geography fits into your vision for your expanding organisation. If, for instance, you are only looking to tap talent from this country in the foreseeable future, maybe forming a legal entity at the very inception would not be the right thing to do. Forming and maintaining a legal entity will inevitably involve time, effort and cost. On the other hand, should you choose to go with an outsourcing partner (EOR service provider), it could not only help jumpstart your work right away, but also help you in minimising legal risk. With no legal entity of your own, the periodic compliances as well as the attendant costs, both, are substantially reduced. So, outsourcing your human resources, at least for the initial few years (while you get surer about your business plans for the new geography), to an employer-of-record or PEO (professional employer organisation) service provider may make a great deal of sense. While outsourcing it would obviously entail its own costs, it may really be worthwhile to do an objective comparison of both the options (in terms of money spent and saved), as also consider that going with an EOR or PEO service provider would also minimise your legal risks and afford your organisation greater focus on more substantive challenges to your business and the expansion.