Depending on your contract type, changing the legal entity works differently:
- Independent Contractor (IC) contracts - Deel automates the termination and recreation of your contract under a new entity.
- Contractor of Record (COR) contracts - The contract stays active and Deel only changes the billing entity for issuing fees.
| Aspect | IC Contracts | COR Contracts |
|---|---|---|
| What happens to original contract | Terminated & recreated under new entity | Remains active |
| Billing entity | Changes to the new entity | Changes for Deel management fees only |
| Data transfer | All contract data carries over | Contract data unchanged; only billing entity changes |
| New contract created? | Yes | No |
| Invoice impact | Historical invoices remain on old contract | Pending invoices regenerated; future invoices to new entity |
Who can use this feature
Clients with create, modify, and sign permissions on contractor contracts. The option is not visible to users without these permissions.
In this article
Independent Contractor (IC) contracts
Who can use this?
Clients with create, modify, and sign permissions on contractor contracts. The option is not visible to users without these permissions.
Before you start
- You must have at least two active legal entities on your account. If only one entity exists, the Change Entity option will be disabled.
- Effective dates are constrained to the first day of the next payment cycle. Mid-cycle and past dates are not selectable.
- This process applies to Independent Contractor contracts only.
How to change the entity
- Open the contractor contract you want to reassign.
- From the contract action menu, select Change Entity.
- Select the target entity from the dropdown. Your current entity is excluded from the list; inactive entities do not appear.
- Select the effective date. This must be the first day of an upcoming payment cycle.
- Review the summary screen, which shows the original and new contract details side by side.
- Confirm to complete the change.
What happens next
- Deel automatically terminates your original contract and creates a new contract under the target entity.
- All original terms are carried over to the new contract (see table below).
- The original contract shows a "Terminated on [date]" status.
- The confirmation screen links to both the old and new contracts.
- If you close the flow before confirming, the original contract is untouched. No changes are applied.
What is transferred automatically (IC)
| Item | Transferred? |
|---|---|
| Contract rate | Yes |
| Scope of work (SOW) | Yes |
| Job title | Yes |
| Recurring reports | Yes |
| Upcoming time off | Yes |
| Custom fields | Yes |
| Equipment & co-working | No. Add these after the entity change, before signing the new contract |
| Other extras | No. Add these after the entity change, before signing the new contract |
| Historical invoices and payments | No. These remain on the original contract |
| Past time off | No. Only future entries are transferred |
If something goes wrong
If an error occurs mid-submission (for example, a recurring report transfer fails), the flow rolls back automatically. No partial state is created, and the original contract remains active. You will see a clear error message, and you can retry the flow.
Why do I need to terminate the contract?
The legal entity is one of the two engagement parties in your contractor agreement. Once a contract is signed, changing a party to the agreement isn't compliant. We need to create a new contract with the new legal entity to maintain legal validity.
The good news: Deel handles this automatically for you. When you initiate a legal entity change, we:
The legal entity is one of the two engagement parties in your contractor agreement. Once a contract is signed, changing a party to the agreement isn't compliant. We need to create a new contract with the new legal entity to maintain legal validity.
The good news: Deel handles this automatically for you. When you initiate a legal entity change, we:
- Terminate your original contract with the old entity
- Recreate it with identical terms under the new entity
- The contractor signs the new contract
All of this happens in the background: you don't have to terminate and recreate anything manually. It's a seamless process.
Contractor of Record (COR) contracts
Who can use this?
Clients with create, modify, and sign permissions on COR contracts. The option is not visible to users without these permissions.
Before you start
- You must have at least two active legal entities on your account. If only one entity exists, the Change Billing Entity option will be disabled.
- Effective dates are constrained to the first day of the next payment cycle.
- This process applies to Contractor of Record contracts only.
How to change the billing entity
- Open the COR contract you want to update.
- From the contract settings, select Change Billing Entity.
- Select the target legal entity from the dropdown. Your current entity is excluded from the list; inactive entities do not appear.
- Select the effective date. This must be the first day of an upcoming payment cycle.
- Review the summary screen.
- Confirm to complete the change.
What happens next
- The contract remains active and untouched.
- Only the billing entity for Deel's management fees changes.
- Future invoices will be issued to the new entity.
- Pending invoices are regenerated and reissued to the new entity.
- The confirmation screen shows both the old and new billing entity.
- If you close the flow before confirming, the contract is untouched. No changes are applied.
What is transferred automatically (COR)
| Item | Transferred? |
|---|---|
| Contract rate | Yes (no change) |
| Scope of work | Yes (no change) |
| Job title | Yes (no change) |
| Recurring reports | Yes (no change) |
| Upcoming time off | Yes (no change) |
| Billing entity | Changes to new entity |
| Contractor status | Yes (no change) |
| Historical invoices and payments | No. These remain under the original billing entity |
If something goes wrong
If an error occurs mid-submission, the flow rolls back automatically. No changes are applied to the contract, and no partial state is created. You will see a clear error message, and you can retry the flow.