is EOR the right structure for one employee or should we open a GmbH? (i will not promote)

We have one person in Germany who's been working full-time and exclusively with us, and our legal team has flagged that this looks like an employment relationship under German law, and we need to either convert them properly or risk an AÜG violation. The person wants to stay on long-term and so do we, so it's between going through an EOR like Workmotion or Remote, or opening a GmbH ourselves because we might need a German entity at some point anyway. Can't figure out if EOR is even the right structure for converting one contractor, or if we should just open a GmbH now given we might hire 2 or 3 more people in Germany next year. That said, I figured this would be the right place to ask, so have you navigated this in Germany or similar european countries?