How to move employees from an EOR to your own Spanish entity
To move employees from an employer of record (EOR) to your own Spanish entity, establish the legal route for changing employer, document each employee’s position and prepare the entity for direct employment before coordinating the payroll cutover. If your Spanish team is already doing the same jobs for your business, the move can look deceptively simple. The decision that sets the timetable is whether employment transfers under succession rules or needs a separately agreed arrangement. Resolve that before committing to the EOR exit date or asking staff to sign new documents.
This guide concerns employees already working in Spain and moving to a Spanish subsidiary. It assumes you are considering direct employment; it does not establish that a particular EOR arrangement qualifies for transfer.
In this guide:
- Establish the transfer route
- Document employee continuity
- Prepare the employing entity
- Coordinate notice and employee communication
- Choose the cutover date
- Budget and close the handover
Does Article 44 apply to an EOR-to-entity transfer?
Article 44 of the Spanish Workers’ Statute applies where a transfer concerns an economic entity that retains its identity. In a qualifying succession, the incoming employer assumes employment and Social Security obligations. Incorporation alone does not establish that the test is met. Workers’ Statute, Article 44.1–2.
Ask the employment adviser to assess what is actually moving: the organised activity, people, resources and responsibilities. Supply the EOR service agreement and employment contracts, alongside an explanation of how the team works. Also ask whether an applicable collective agreement imposes succession obligations. The parties’ preferred label cannot replace that assessment.
That leaves distinct routes to investigate:
| Route | What must be established | Consequence for the migration |
|---|---|---|
| Statutory succession under Article 44 | The factual transfer meets the legal test | Plan around continuing employment and the applicable information and consultation process. |
| Succession required by a collective agreement | A relevant provision applies to the actual activity and change | Follow that provision and assess its interaction with statutory rules. |
| Agreed change of employer | No automatic route has been established; the proposed agreement is legally appropriate | Resolve employee consent and document the rights and obligations assumed by each party. |
For an agreed route, have counsel consider an employer substitution agreement involving the EOR, receiving entity and employee. The Civil Code’s rules on replacing a debtor require the creditor’s consent; applying contract-substitution principles to the employment relationship needs a case-specific assessment. Civil Code, Article 1205.
Do not make resignation and rehire the default instruction. If ending employment and making a fresh hire is proposed, require an explanation of the consequences before asking anyone to sign. Employee agreement cannot validly waive mandatory rights. Workers’ Statute, Article 3.5.
The practical distinction is between ending the commercial EOR service and changing the employment relationship. A provider can agree to close your customer account while the employment arrangements still need work. Keep both decisions visible in the plan.
What happens to seniority, pay and benefits?
Start with each employee’s existing position. A shared salary spreadsheet leaves too much unexplained: a recognised service date, an accrued commission or an insurance condition can change what the move means for that person.
For a qualifying business transfer, employment obligations continue with the incoming employer. Eurofound’s Spain business-transfer summary describes this continuity, including contractual benefits. Use the underlying documents to establish what those obligations are for your team.
Build an employee continuity schedule with the EOR and the receiving employment adviser. It should record the current position, the intended position after cutover and any unresolved difference.
| Employee item | What to reconcile before the move | What the employee should be able to understand |
|---|---|---|
| Service history | Original start date, recognised seniority and the purposes for which earlier service counts | How previous service is reflected after the employer changes |
| Pay and variable remuneration | Annual gross pay, payment pattern, commissions, bonus periods and unpaid amounts | Who pays each amount and when |
| Leave and absence | Accrued and taken holiday, booked leave and ongoing absences | Which balances and arrangements appear in the receiving records |
| Benefits | Current entitlement, policy terms, replacement arrangements and effective dates | Whether any cover, conditions or access will change |
| Job and working arrangements | Duties, classification, applicable collective agreement, hours, location and remote-work documents | Whether the work itself changes |
| Individual issues | Open claims, disputed amounts and any work-authorisation conditions requiring specialist review | Which matters need an individual answer before cutover |
Use the schedule to prevent a standard onboarding template from inserting a new probation period or resetting a service date. Where the legal route requires continuity, the documents must reflect it. For an agreed route, make any recognition of earlier service explicit and have its effect reviewed.
The collective agreement also needs a specific answer. Under Article 44.4, the existing agreement generally continues until it expires or a new applicable agreement takes effect, subject to a contrary agreement with employee representatives reached after the succession. Workers’ Statute, Article 44.4. Avoid selecting a cheaper agreement simply because the employing company is new.
Benefits need two checks: what the employee is entitled to, and how the insurer or other supplier will deliver it after the change. Ask whether an existing policy can continue, whether a replacement is needed and whether exclusions or waiting periods differ. Do not cancel existing cover on the strength of an unaccepted quote.
Historical liabilities also need attention. Article 44.3 provides, for covered transfers between living parties, three years of joint liability for unpaid pre-transfer employment obligations, without displacing Social Security rules. Workers’ Statute, Article 44.3. Ask counsel to review arrears and disputes before agreeing how costs are allocated between the companies. That allocation should be assessed separately from liability to employees or authorities.
When is your Spanish entity ready to employ the team?
The entity needs to be able to fulfil the employment arrangements on the intended date. A signed incorporation deed and a payroll provider’s appointment do not establish that everything is ready.
A first-time employer must request TGSS registration before activity begins. The official employer registration guidance also identifies the company and representative documents needed. Confirm the relevant employer registration and contribution account with the authorised filing contact.
Have that contact coordinate the employee movements with the EOR according to the legal route. The general rule requires employee alta applications before work starts; the regulations also address employer succession and changes in contribution accounts. The applicable procedure needs to match the actual transaction. Royal Decree 84/1996.
Operationally, the receiving team should be able to show a test payroll using the agreed employee data, a funded payment route and a clear approval process. Resolve unexpected differences before the live run. An employee should not discover a disputed allowance when the first payslip arrives.
Ask which workplace arrangements the new employer must implement or update, including prevention support and the documents for the actual working pattern. Our guide to first-employee readiness in Spain explains the wider employer setup. Use it to define responsibilities beyond payslip processing.
For employees whose permission to work may be affected by an employer change, obtain immigration advice before fixing their move. Include people on leave or other absences in the review. A single team-wide date is useful only if it works for each person’s circumstances.
How should you coordinate EOR notice and employee communication?
Review the commercial exit terms early, while the entity and employment work progress. Establish the notice deadline, renewal provisions, exit charges and any restrictions that need legal review. Ask when benefits end, when employee records can be handed over and what conditions govern deposit release.
Record three dates separately: the employer-change date, the last period the EOR will process and the end of the commercial service. They may coincide, but that should be an agreed outcome. A final invoice can still follow the employee move.
Avoid sending irrevocable notice against a date supported only by an incorporation estimate. If notice must be given while work is outstanding, agree how delays or an extension would be handled. The EOR’s cooperation and the legal suitability of continued arrangements both need to be established.
Under Article 44, the relevant employers must give prescribed information in advance to employee representatives, or affected employees where there are no representatives; planned employment measures may also require consultation. Workers’ Statute, Article 44.6–9. Ask the adviser to identify the applicable process before announcing a final timetable.
The employee explanation should match the individual schedule: who will employ them, what continues, what changes and which documents they are being asked to sign. Give a named contact and a way to correct discrepancies. Avoid promising “nothing changes” when, for example, the benefit supplier or payroll contact will change.
How long does an EOR-to-entity migration take?
There is no useful universal duration without the EOR notice terms, the entity’s current state and the assessed employment route. Plan against the dependencies that remain, then choose a payroll cycle that those dependencies can support.
Entity setup, contract review and payroll preparation can often progress alongside one another. The legal route determines the documentation and employee process; the provider agreement constrains the commercial exit. A month-end move can simplify reconciliation, but it is an operational preference, not a universal legal requirement.
Use the following decision table before confirming cutover. It is a suggested project control, not a legal certification.
| Area | Evidence for committing to the date | If it is unresolved |
|---|---|---|
| Employment route | Adviser’s conclusion and route-specific documents/process | Resolve the mechanism before using generic transfer or resignation forms. |
| Employee position | Reconciled terms and balances; required agreements and information process addressed | Investigate the discrepancy or individual issue. |
| Employer and payroll readiness | Filing plan and required confirmations, test payroll, payment funding and benefits arrangements | Reassess the proposed start under the new employer. |
| EOR handover | Agreed employment/payroll boundaries, commercial terms and record delivery | Negotiate the remaining terms and any lawful fallback. |
For example, suppose incorporation and payroll preparation are complete, but replacement medical cover has not been confirmed. That is an illustrative project situation, not a client case. Giving employees an earlier date does not close the coverage question. Resolve it or reassess the date with the provider and advisers. If continued EOR employment is unsuitable, an extension cannot be assumed to solve the problem.
A phased move may help with individual dependencies, provided the legal structure allows it. It also creates more than one payroll boundary, communication round and provider charge period. Compare those costs with delaying the whole team before choosing the approach.
What costs remain after you leave the EOR?
The recurring saving starts with service charges that genuinely end. Salary, employer contributions and continuing employee entitlements remain in the budget. Add the company’s replacement operating costs and the cost of reaching the new arrangement.
For the migration budget, obtain actual figures for professional work, employer/payroll setup, contractual exit charges and any overlap between providers. If the proposed route includes ending employment, have counsel establish any settlement or severance consequences separately from the EOR’s commercial offboarding fee. Separate refundable deposits from expenses and establish when the cash will be released. The guide to when an EOR stops making financial sense in Spain explains the wider comparison and payback calculation.
After cutover, reconcile the last EOR payroll period and the first entity period against the continuity schedule. Confirm pay allocations, leave balances and the treatment of adjustments. Obtain filing/payment evidence from the responsible contacts and resolve employee queries promptly. Arrange secure delivery of the relevant employee records and retain an agreed route for accessing historic documents after the provider account closes.
Before treating the project as complete, establish who owns the next payroll and the wider company obligations. Managed Payroll, Tax & Employment and Full Subsidiary cover different needs: whether HQ keeps the books changes the appropriate ongoing scope. Evolutia’s EOR exit service is the relevant starting point for discussing migration support; agree the specific work and fee in writing.
Assess the move using your own team and invoices
If you are still deciding whether to proceed, request a Personalised EOR Exit Model. Bring your Spanish headcount, salary information and actual EOR invoices, together with your hiring plans and the status of your entity. The free, bounded model supports the economic comparison and is yours to keep.
Contract review and EOR Exit Migration are separate paid work. If the financial case is already settled, say so in the same enquiry and describe the intended move date and unresolved employee issues. That lets the next conversation focus on the implementation decision you actually face.