Spain’s Corporate Culture: Balancing Tradition and Globalization

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Gino Peters

Written By:

Gino Peters

Reviewed By: Belinda E.

May 17, 2026 2:21 am

Category Tag: News

The rise of remote work made international expansion much easier in recent years, but hiring abroad still comes with legal and administrative complexity, as every country has its own labour laws and payroll rules that must be followed. In addition, not many companies can open a new entity in every new market that they are expanding into. That is when the Employer of Record (EOR) solution comes in handy.

The EOR serves as the legal employer on paper, while the client company manages important activities related to the employees responsibilities and performance.

In this guide we will cover what an employer of record is, how it works in detail, how much it can cost and which business should consider an EOR solution.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third party service provider that legally employs a person on behalf of another company in the country where the employee officially resides. As an official employer the responsibilities of EOR include issuance of an employment contract, processing payroll and withholding taxes and necessary social security contributions, as well as preparation of offboarding documents or any documentation that need to be signed by the employer. In addition, EOR ensures the compliance with local labour laws and serves as a first point of contact for any legal disputes.

The client company that hired the employee through an EOR also has a list of responsibilities. As an Employer of Record does not have the visibility on operational activities behind the scenes a client company needs to provide direction and ensure proper team integration.

In simple terms, the EOR provider acts as a legal employer in the country of the employee’s residence, while the client company takes on day-to-day manager work.

Responsibility	Employer of Record (EOR)	Client Company
Employment contracts & any other official documentation
Payroll processing
Income tax & social security contributions
Compliance with local labour laws
Statutory benefits administration
Managing daily work and projects
Setting goals and performance expectations
Providing equipment and tools
Leading the employee’s team and workflow

Employer of Record solutions gain more and more popularity in the field of global expansion as they allow businesses to hire best candidates fast and easy while staying compliant with local employment regulations. More information about EOR service are available if you would like to understand more.

EOR Meaning

The term “EOR” is the abbreviation for Employer of Record.

Employer in this instance stands for the company that hires the employee and takes on duties related to it, such as onboarding and offboarding process, payment of wages and compliance with other legal requirements.

“Record” from the EOR perspective refers to official registration with government authorities. The name of the EOR provider is stated in all payslips and tax filings, and should also be listed by the employee in any documents where employer must be stated, such as mortgage or loan applications.

One might ask a question of why this legal structure exists. As it is not possible to provide an employment contract directly to a person that legally resides in another country, the business expanding abroad typically needs to establish a local entity. That involves legal registration, arrangement of local bank accounts and organisation of payroll structure, as well as compliance with local law.

EOR allows to simplify the global hiring and reduce administrative burden through their existing legal entity.

There are some other hiring models that can be confused with EOR.

EOR and PEO

Many sources online refer to EOR as “international PEO”, which may create confusion as these models have 1 important difference.

A Professional Employer Organisation (PEO) serves as a co-employer of a client company. In other words, a business must already have an established entity in the country. The hiring tasks are, therefore, shared between 2 companies, while legal liability stays only with the client company. In the EOR model all legal risks are being taken by the official employer. Read more about the difference between PEO and EOR here.

EOR and staffing agency

Staffing companies mainly provide assistance for short-term projects by providing temporary workers. If the client wishes to employ a person for a longer time, EOR approach must be chosen.

EOR and contractor model

Contractor agreements assume the involvement of independent workers rather than employees. This model is also often used for temporary, project-based assignments. It is important to remember that there is a big misclassification risk between a contractor and an employee in the company which can lead to potential legal issues. An EOR ensures that employment is legally compliant with local labour law.

How does an Employer of Record work?

While it may sound complicated at first, a process behind the employer of record model is relatively straightforward.

The operating company selects a candidate

The client company recruits the employee they want to hire in another country

The EOR becomes the legal employer & local employment contract is issued

The Employer of Record uses its local legal entity to prepare and issue an employment contract that complies with labour law of the country where the employee is based. Depending on case-by- case situation, the work visa might need to be secured beforehand. Our company provides immigration services, more details can be found here.

Payroll and taxes are managed

The EOR takes on recurring responsibilities related to a payroll and ensures correct processing of income tax, social security contributions etc

Benefits are administered

Paid leave, sick leave, pension contributions and any other statutory benefits are being managed by the EOR.

Ongoing compliance and HR support

It is the responsibility of the EOR to monitor changes in local labour law and ensure ongoing compliance.

Example:

Imagine a UK-based tech company found a perfect candidate in Germany for a position of a software developer.

Instead of going through the administrative burden of opening a legal entity in Germany, the company chooses to work with an Employer of Record. The EOR hires the developer under a German employment contract and manages payroll and taxes. At the same time the UK company welcomes the new employee in the team and manages the daily work of a developer.

What services does an Employer of Record provide?

The Employer of Record does more than just providing an employment contract to the employee. Typically a wide range of HR and compliance services is included in the EOR offer. For example, read about the services included in our EOR package here.

Employment and HR administration

Locally compliant employment contracts and support with other documents requested by authorities
Employee onboarding
Employee record management. For example, control over PTO

Payroll and tax management

Regular payroll processing
Tax withholding and reporting of social security contributions with authorities
Payslip generation and creation of annual wage tax certificates

Benefits administration

Management of statutory benefits
Pension contributions (where required)
Support with benefits such as maternity leave allowance, sick leave allowance etc

Compliance and risk management

Insuring compliance with local labour law
Management of onboarding and offboarding processes
Representation in difficult legal and court cases

Additional services:

Some EOR providers ( such as ThisWorks EOR Services) provide additional services such as:

Work permit and dependent visa support
Background checks
Relocation support
Value added services: support with housing, company car, banking, etc ( depending on the country).

This vast list of services allows businesses to manage international teams, while staying compliant and avoiding complex local employment administration.

Benefits of using an EOR service

There are multiple advantages the businesses can get from working with an Employer of Record provider.

Faster global hiring

Setting up a new entity can take up to several months. With an EOR the hiring process can take several days.

Reduced compliance risk

A trustworthy EOR provider ensures the compliance with all local regulations. As the labour law varies greatly between countries, having a knowledgeable party to rely on can make a big difference.

Lower expansion costs

Establishment of a new entity is not only a time-consuming process, but also costly. With EOR services these costs can be avoided.

Access to global talent

The location of a remote candidate is not a problem if the company uses Employer of Record services. In other words, the best candidate for specific business purposes can be chosen.

Scalable hiring model

EOR services are ideal for organisations that want to scale international hiring quickly. They are particularly useful in the following situations:

Remote-first teams and organisations
Companies testing new markets abroad
Startups expanding internationally

How to choose the right Employer of Record

Choosing between several EOR providers is important, as it influences not only compliance, but also employee experience for new hires and how your company is perceived on the job market.

Here are some important things to keep in mind when deciding on your EOR partner:

Geographic coverage

Make sure that EOR provider can cover the country where you want to expand globally. Read about our EOR coverage here.

Pricing transparency

Check that EOR provider does not have any hidden costs and the pricing is clearly outlined in your MSA.

Compliance expertise

A strong EOR provider should have a team of experienced local HR specialists who understands all in and outs of a national labour law.

In-house vs partner model

Some EOR providers rely on their third-party partners, while others manage employment directly through their own local entities.

Customer support

It is important to find a EOR partner that helps with any questions or concerns in a quick and professional manner. That can be crucial when dealing with employee offboarding or any legal disputes.

Warning signs

Understanding the importance of choosing a right party, your company should be cautious of providers that lack local expertise and cannot give clear answers to your labour law questions. In addition, companies with slow response times can prove to be unreliable in critical situations. Furthermore, providers with complex pricing models with many hidden fees can create a lack of cost transparency and result in unforeseen expenses.

By selecting a provider with strong expertise in local labour law and reliable support from dedicated teams, your company can ensure a smooth international growth. Learn why companies choose ThisWorks as their EOR partner.

How much does an employer of record cost

The vast coverage of services the employer of record provides makes many businesses ask how much an EOR costs.

Pricing models vary greatly on the provider and the country of coverage, but most EORs use one or more of the following structures.

Flat monthly fee per employee.

The EOR provider charges a fixed monthly fee for each employee they have on the payroll from the client.

Percentage of salary

While not being a popular approach, some EOR providers charge a percentage of the employee’s salary, typically ranging between 5%-15%.

Setup fees

Some providers charge onboarding or offboarding fee for each employee.

The fee that the business needs to pay to an EOR provider also depend on the location of a service. Local labour law complexity of some countries can influence the fee. In addition, some countries have specific statutory benefits and payroll administration requirements. Furthermore, employee headcount in the specific location can influence the fee.

EOR vs setting up a legal entity

To establish a new entity the organisations needs to go through legal and tax registration. In addition, accounting support and ongoing compliance costs such as the fees for local labour lawyers can make setting up a legal entity significantly more expensive.

An EOR allows companies to expand globally without these upfront investments.

EOR vs hiring contractors

Some businesses decide to hire international workers as contractors. However, this approach can often lead to a misclassification risk, which can cause legal and tax liabilities.

A professional EOR provider ensures that the new starters are compliantly onboarded under local employment regulations.

EOR FAQs

Is an EOR the same as a PEO?

No. PEO model assumes co-employment and requires the business to already have established local entity, while EOR employs new talents through its own entity only.

Can an EOR hire contractors?

While some EOR providers can support hiring contractors, it is important to remember that main function of EOR is the employment of full-time workers legally in a country. A risk of misclassification between EOR and contractor should be also considered carefully.

Is an employer of record legal?

Yes, when established and structured properly, Employer of Record entities are legal and widely used for international expansion by many companies.

When should you use an EOR?

The most common reason for using EOR include:

Hiring employees located in another countries remotely
Testing new markets before establishing an entity
Expanding internationally

Can you switch from EOR to your own entity?

Yes. Many companies initially hire through an EOR for the ease and speed of expansion and later transition employees to own legal entities upon their establishment. It is important to remember that some countries require specific procedure to be followed in such a scenario.

Get in touch with ThisWorks

Expanding your team globally does not need to be long and administratively complex.

With the use of Employer of Record the businesses can have access to the best talent from around the world while ensuring full compliance with local labour laws.

ThisWorks can support your global expansion with our compliant Employer of Record services.

Contact our team to find our how we can help your international team glow fast and compliantly!

Work Culture in Spain: Key insights for success

Seeking business opportunities in Spain? If yes, then you might need to note a few things. The Spanish business etiquette is unique and embarking on a professional journey in an entirely new country is never easy. So, if you want to succeed as an employee or a business owner in Spain, you must know a few important things about Spanish work traditions.

For starters, Spain is a country that puts a lot of stress on making relationships. People in Spain prefer to get to know you before diving into work-related discussions. Spanish people have an interesting communication style and Spain’s work-life balance is also very refreshing. In this blog, we will tell you everything you need to know for adapting to work culture in Spain.

Common employee benefits in Spain:

Before we talk about the cultural and traditional aspects, let’s talk about the thing that employees are most interested in: employee benefits.

Businesses in Spain offer their employees a unique blend of statutory benefits and traditional perks. Overall, Spain’s work culture is extremely rewarding for employees. Here is a brief breakdown of all the employee benefits you get in Spain:

Statutory Leaves

Employees in Spain are typically offered 22 working days of annual leave. You also can’t cash out your unused leave days. This is because the company wants employees to use this annual leave as a way of relaxing and taking a break. On top of that, employees also get to enjoy almost 14 public holidays. In some regions, you even get an additional 20-30 state and local holidays. Overall, there is plenty of time for employees to kick back their work shoes and enjoy a long vacation.

Minimum Wage Overtime

The minimum monthly wage offered in Spain is €1,108.30, including additional benefits like meal vouchers, company transportation, as well as medical insurance. There is also a limit on employee overtime of 80 hours per year. If you do overtime in Spain, you will get at least 50% more than the normal rate.

Pensions in Spain

In Spain, the pensions offer around 81% of an employee’s final gross salary. Spain actually has one of the highest pension rates in the world. Out of the mentioned 81%, employees contribute 4.7% while employers are responsible for covering 23.6%.

Medical Insurance

If you are working in Spain, it is mandatory for you to be registered with the General Social Security Fund. The social security premium is 28.3% of the employee’s salary. You also get medical insurance as an employee benefit.

Maternity and Paternity Leave

The maternity leave in Spain is typically complimented by the social security benefits, which means that you won’t only get 16 weeks off but you will also get financial support throughout this period. If there are any complications, you get extra days off. In addition to this, both partners receive two days off immediately after the birth. Paternity leave also includes 13 days off with 100% of income covered by the benefits.

Siesta in Spain and work culture:

Spanish Siesta is a very popular term, which is still a part of some business in Spain. Siesta basically means a noon break to take a nap. Companies offer their employees time to rest and recharge during the afternoon. This is a very old Spanish tradition that is still alive in Spanish work culture, improving productivity, focus, and overall well-being of employees.

Employees usually get a crucial lunch break lasting from 2 pm to 3 pm known as Spanish Siesta. However, employees don’t often use this break to take naps; rather they use it as an opportunity to catch up with outside friends and family members.

Working hours in Spain:

If you start working in Spain, you will quickly discover that Spanish people believe in the come-late-work-late philosophy. People’s idea of time and flexibility in Spain is not exactly the same as other Western nations in the world. Your work day might not even start until 10:00 am on most days and working late is a common norm that you will witness. This is why there is a drastic difference when you look at work-life balance in Spain vs. UK. Employees get more flexible working hours which makes it easier for them to strike a perfect harmony between their personal and professional lives.

The art of non-verbal communication:

Once you start working in Spain, you will also realize that communication in Spanish companies is very different, especially when it comes to non-verbal communication. To fit into Spain’s work culture, you will need to understand how they communicate verbally and non-verbally.

For instance, a lot of us assume that the common way to greet in Spain might be exchanging kisses on both cheeks. But this is not true. In business settings, a handshake and an eye contact is enough to greet. Keep in mind that Spanish has formal (usted) and informal (tú) forms of address. You might want to observe how the other person is addressing you if you are unsure about which form to use.

Useful tips to tackle Spain’s unique work culture:

Integrating into Spain’s unique and culturally rich workspace is a learning curve, and we are here to help you out. If you are new to Spain’s work customs and traditions, here are some useful tips for you to tackle the new work culture.

Build relationships

Teamwork in Spain’s workplace is very important; they practically thrive on personal relationships. Try to build genuine connections at your workplace if you want to succeed in Spanish business culture. Take some time out to socialize, attend business events, and catch up with co-workers during lunch hours or siesta.

Understand the formalities

While workplaces don’t necessarily have to be formal, respecting business hierarchy in Spain is still very important. You need to understand the decision-making process in your business and effectively communicate with people on top.

Dress professional

Keep in mind that business attire in Spain is smart yet conservative. Whenever you are trying to adapt to a new business culture, observing is very important –be it language, traditions, or dress code. Pay attention to what your co-workers are wearing and try to follow suit.

Try to match the Spanish pace

The work culture in Spain is very different from other countries. You might not be very used to the long breaks or might be wired to work early in the morning. But if you want to adapt to the Spanish business culture, you will have to embrace their pace. For instance, most companies in Spain work on a four-day work mood with longer than usual work days. Just try to make the most out of the time and focus on embracing the new traditions in your work life.

Lunch breaks are sacred

If there is one thing that you should follow by heart when working in Spain, it is the belief that lunch breaks are absolutely sacred. While the two-hour long lunch breaks in Spain are not for siesta anymore, it is definitely the time of la sobremesa –which is the time for relaxed conversations after the meal.

Frequently Asked Questions (FAQs)

What is the work culture like in Spain?

The work culture in Spain is a blend of modern and traditional rules. Spanish people love to socialize. They value relationships more than business deals. Companies also allow their employees diverse benefits and plenty of time to relax or spend time with family.

How is the work culture in Spain compared to other European countries?

The business culture in Spain is very different from that of other European countries in a lot of aspects. For instance, the working hours are extremely flexible in Spain. While most European countries operate on a 9-to-5 working schedule, Spanish people like to start their day pretty late –sometimes at 10-11 am. Secondly, Spanish companies allow a lot of benefits and holidays to their employees, which is something that we rarely see in other European workplaces.

What are the key elements of Spanish work culture?

Some of the key elements of Spanish work culture include:

Minimum wage and overtime limit
Plenty of holidays and benefits
13^th and 14^th month salary
Four-day work model
Building relationships and respecting the hierarchy

How does the siesta affect work culture in Spain?

Siesta is an age-old Spanish tradition that refers to a noon break or a nap. This afternoon break allows employees to relax, enjoy a meal, and socialize which helps them shed off the day’s work stress.

What are the typical working hours in Spain?

The working hours in Spain are very flexible. A typical work day in Spain can start anywhere from 8:30 am and 9:30 am to 1:00 pm. It’s also not uncommon for employees to stay as late as 2:00 am.

How important is work-life balance in Spain?

Since employees get plenty days off, employees in Spain have been observed to have a very great work-life balance. The 22-day annual leave on top of 20-30 local and state holidays as well as personal leaves allow employees to relax and do things they like in their personal lives, leading to a very stable work-life balance.

How do Spanish companies approach teamwork?

Spanish people are very team-oriented. They believe in the power of teamwork and effective communication.

What is the role of hierarchy in Spanish work culture?

Spanish employees respect business hierarchy very much, leaving important decisions to seniors and management alone.

How does communication style in Spain differ in the workplace?

The way we communicate is different in every country. Likewise, workplace communication in Spain is heavily reliant on understanding cultural significance and non-verbal cues. For example, in Spain, interrupting is often seen as a sign of taking interest in the conversation rather than being rude.

What are the unwritten rules of business etiquette in Spain?

Some unwritten rules of business etiquette in Spain include longer lunch breaks, dressing appropriately, and communicating effectively. Socializing is a serious business and it should be treated like that.

How do holidays and vacation time influence work culture in Spain?

More holidays allow employees to be more relaxed and satisfied. Employees get a lot of time to relax and come back to work with a fresher and more energized mind.

What are the common challenges for expats adapting to Spanish work culture?

One of the major challenges that expats encounter is probably the language barrier and the Spaniards’ unique way of communication. It is important to understand their style and embrace their pace if you want to fit in Spain’s work culture.

How does the Spanish approach to meetings differ from other cultures?

In Spanish workplaces, meetings are often treated as social gatherings. There is a lot of negotiating involved when talking to clients, but Spanish people like to get to know each other before diving into work matters.

What is the role of socializing in Spanish work culture?

Socializing is a big part of Spanish work culture. They treat business meetings and even breaks and mini-social gatherings.

How does the concept of “mañana” play into work culture in Spain?

The idea of “mañana,” reflects a more relaxed attitude toward time and scheduling. The word mañana literally means “Tomorrow” or “the day after tomorrow”. It is a stereotype that is often associated with Spanish work cultures referring to their easiness with deadlines.

What are the expectations around punctuality in Spain?

When it comes to punctuality, there are actually zero expectations in Spain. Employees work flexible work hours often coming late to the office and sating late to finish the work.