Blog
What Is an Employer of Record and How Does It Work?
July 1, 2026
Definition An Employer of Record, or EOR, is a local organisation that formally employs a worker for a client company and handles the local employment layer. The client company continues to direct day-to-day business work. EOR is a commercial model rather than one universal legal category, so the underlying legal mechanism varies by country.
Aidanta's current EOR model
| Current coverage listed on the EOR page | Russia, Uzbekistan, Kazakhstan, Azerbaijan, Georgia, Armenia, Kyrgyzstan, Belarus, the UAE, Serbia, and Moldova. |
|---|---|
| Legal employer | An Aidanta operating entity in the destination country is the legal employer. The client retains day-to-day operational control. |
| Employment operations | Localised contracts, electronic signing, payroll calculations, tax withholdings, statutory contributions, leave administration, optional health insurance, migration support where required, and monthly reporting. |
| Activation SLA | Active employment within 72 hours after the onboarding file is complete. |
For current country coverage and operational details, see Aidanta's Employer of Record service page.
Think of the arrangement as two connected layers
| Local employment layer | Day-to-day business layer |
|---|---|
| Employment contract, payroll, statutory deductions, mandatory records, leave administration, amendments, and offboarding. | Work priorities, team leadership, performance expectations, access to tools, product decisions, and business outcomes. |
The separation is operational, not absolute. The client still needs
suitable management practices, accurate information, timely approvals,
and a role that can legally be supported through the model.
Why companies use an EOR
- To hire one or several employees before a subsidiary is economically justified.
- To enter a market quickly while a longer-term structure is being evaluated.
- To provide local payroll and employment administration for a distributed team.
- To convert a contractor into employment when the role has become employee-like.
- To test a country before making a larger investment.
Where the model has limits
An EOR is not a universal substitute for a local business. Certain
executive, regulated, licensed, immigration-sensitive, or
revenue-generating activities may require a different structure.
Provider marketing terminology does not override local staffing,
labour-leasing, or personnel-provision rules. A company must also assess
permanent establishment and corporate tax exposure separately.
What to compare between providers
| Area | Questions to ask |
|---|---|
| Legal structure | Who is the legal employer? Which entities and subcontractors are involved? |
| Payroll | Who calculates payroll, approves inputs, funds payments, and handles corrections? |
| Employment support | Who prepares amendments, leave records, warnings, and offboarding documents? |
| Data and security | Where is employee data stored and who can access it? |
| Pricing | Which costs are fixed, variable, refundable, or triggered by termination? |
| Service ownership | Who responds when a case crosses payroll, legal, and HR functions? |
Frequently asked questions
Does the worker become a legal employee of the client?
No. The local provider is the formal legal employer, while the client
company manages the employee's day-to-day business work. The exact legal
mechanism and division of responsibilities vary by country.
Can an EOR support a single employee?
Yes. Many EOR providers support a single employee. The country, role,
and provider's legal scope determine whether the arrangement is
available.
Is an EOR the same as a staffing agency?
Not necessarily. EOR is a commercial model, while staffing is a legal or
operating category. In some countries, however, an EOR arrangement is
regulated as staffing, temporary agency work, personnel provision, or a
similar activity.