Hiring in Spain without a legal entity: EOR vs staffing agency

Expanding your team in Spain is an exciting opportunity—but it also raises a critical question for international businesses: How can we hire employees in Spain compliantly, without opening a local entity right away?

Two popular solutions are:

• Employer of Record (EOR) Spain
• Staffing agencies (ETT)

While both allow you to hire Spanish-based talent, they operate under different models and are suited for different business needs. In this article, we’ll break down the key differences between an Employer of Record and a staffing agency in Spain, so you can make an informed decision.

What is an Employer of Record (EOR) in Spain?

An Employer of Record (EOR) is a third-party provider that legally employs workers on behalf of your company.

Here’s what an EOR handles for you:

• Drafting and managing legal employment contracts
• Payroll processing and tax withholdings
• Social security contributions
• Ensuring full compliance with Spanish labour laws
• Employee onboarding and HR administration

The employee works exclusively for your company, but the EOR assumes the legal responsibility of being the employer in Spain. This allows you to:

• Hire long-term team members
• Offer local benefits and protections
• Maintain control over day-to-day management and culture

What does a staffing agency do in Spain?

A staffing agency, or empresa de trabajo temporal (ETT), focuses on recruiting and placing temporary workers. They typically manage:

• Talent sourcing and recruitment
• Short-term and project-based contracts
• Temporary work assignments

The staffing agency acts as the legal employer for the duration of the assignment, but your business has limited control over:

• Contract structure and duration
• Benefits and employee terms
• Long-term workforce planning

Staffing agencies are often used for seasonal work, temp admin roles, or short-term projects where speed of hire is the priority.

Key differences: Employer of Record vs staffing agency in Spain

When should businesses choose an Employer of Record in Spain?

An EOR in Spain is the ideal solution if:

• You want to hire long-term or permanent employees in Spain.
• You need to offer local benefits, stability, and legal compliance.
• You don’t want the overhead of setting up a Spanish legal entity.
• You want to build a dedicated, culturally-aligned remote team.
• You need control over employment terms, onboarding, and employer branding.

An EOR provides a compliant, scalable hiring solution that supports both startups testing a new market and established companies expanding strategically.

When is a staffing agency a better fit?

A staffing agency may be the right choice if:

• You need short-term, seasonal, or temporary workers.
• You’re looking for high-volume, fast hires for entry-level roles.
• You want to test market demand with contract-based gigs.
• Your priority is speed of hire, not long-term workforce integration.

Staffing agencies are best suited for administrative, retail, hospitality, or warehouse roles where flexibility and quick placements matter more than long-term talent retention.

Learn more about: Employer of Record vs. subsidiary in Spain: which is the right choice for your business?

How Spanish Employer of Record supports international businesses

Choosing Spanish Employer of Record enables you to:

• Hire and onboard employees quickly, without entity setup.
• Offer compliant employment contracts, benefits, and protections.
• Ensure all payroll, tax, and social security obligations are managed.
• Maintain full control over employee tasks, culture, and role development.
• Test the Spanish market now, and scale up when ready—with or without establishing a local entity in the future.

An EOR acts as the legal employer, while you focus on growing your business and managing your team’s performance.

Choose the right hiring solution for Spain—think beyond cost and speed

While both an Employer of Record and a staffing agency can help you hire employees in Spain, they serve different purposes.

• EOR Spain is ideal for long-term, compliant employment where you want control over workforce integration and employee experience.
• Staffing agencies are useful for short-term, volume, or project-based hiring with a focus on speed and flexibility.

Ultimately, the right choice depends on your business goals. If you’re expanding into Spain with a long-term view, and need a scalable, compliant solution without setting up a local entity, an Employer of Record is often the best fit.

Contact us to learn how our Spanish Employer of Record solutions can help you hire, onboard, and grow in Spain—seamlessly and compliantly.