An EOR (employer of record) and an ETT (empresa de trabajo temporal, temporary work agency) solve different problems in Spain. An EOR employs a person in Spain on behalf of a company that has no Spanish entity, usually for an open-ended job. An ETT is a licensed Spanish agency that hires workers to cede them temporarily to a company operating in Spain, for temporary needs such as a production peak or a replacement.
The difference matters because Spanish law only allows ETTs to cede workers to another company. This guide explains what each model is, when a company in Spain must use an ETT, and why foreign companies that hire engineers through a recruitment agency, as contractors or through an EOR do not need one. It is not legal advice.
What an ETT is in Spain
An ETT (empresa de trabajo temporal) is a company whose core activity is placing workers it has hired at the disposal of another company, the user company (empresa usuaria), on a temporary basis. That is the definition in Article 1 of Law 14/1994 on temporary work agencies.
An ETT needs prior administrative authorisation to operate. Under Article 2 of Law 14/1994, the authorisation is single, valid across Spain and granted with no time limit, and the agency's name must include the words "empresa de trabajo temporal" or "ETT". Authorised ETTs are entered in a public registry kept by the labour authorities, under Article 4 of the same law.
What an EOR is in Spain
An employer of record (EOR) in Spain is a provider that becomes the legal employer of a person who works for a company without a Spanish entity. The EOR signs the Spanish employment contract, runs payroll, pays Social Security contributions and withholds income tax, while the client company directs the day-to-day work and pays the EOR a monthly fee.
EOR providers such as Deel, Remote and Oyster serve foreign companies that want to hire in Spain without incorporating a subsidiary. According to Deel, its Spanish EOR service operates through its own wholly owned Spanish entity. Kulturo's guide to hiring in Spain without an entity covers EOR costs and alternatives.
EOR vs ETT in Spain: comparison (2026)
The table compares the two models on the same attributes.
| Attribute | EOR (employer of record) | ETT (temporary work agency) |
|---|---|---|
| What it solves | Employing someone in Spain without a Spanish entity | Covering a temporary staffing need at a company in Spain |
| Typical client | Foreign company with no presence in Spain | Company operating in Spain (the user company) |
| Typical duration | Open-ended employment | Temporary assignment |
| Legal basis | Ordinary Spanish employment contract | Law 14/1994 and Article 43 of the Workers' Statute |
| Licence required | No specific licence | Prior administrative authorisation, public registry |
| Allowed reasons | Any job, like any employer | Same reasons as a fixed-term contract: production circumstances or replacing a worker |
| Pay rules | Spanish law and the applicable collective agreement | Same essential conditions as staff hired directly by the user company |
| Typical use in tech hiring | First engineers of a foreign company in Spain | Seasonal or replacement roles, rarely engineering teams |
When a company in Spain must use an ETT
A company in Spain must use an ETT whenever it wants another company to hire workers for it and cede them temporarily. Article 43.1 of the Workers' Statute states that "hiring workers to cede them temporarily to another company can only be done through duly authorised temporary work agencies".
An ETT can only be used for temporary needs. Under Article 6.2 of Law 14/1994, a placement contract (contrato de puesta a disposición) is allowed in the same cases in which the user company could sign a fixed-term contract under Article 15 of the Workers' Statute, which since the 2021 labour reform means production circumstances or replacing a worker.
Article 8 of Law 14/1994 also forbids using an ETT in four cases:
- To replace workers on strike at the user company.
- For especially dangerous work, as defined by regulation.
- To fill posts that the user company eliminated in the previous 12 months through unfair dismissal or certain economic dismissals.
- To cede workers to another ETT.
What counts as illegal transfer of workers in Spain
Illegal transfer of workers (cesión ilegal de trabajadores) happens when a company that is not a licensed ETT supplies workers to another company. Article 43.2 of the Workers' Statute says it exists in any of these situations:
- the services contract between the two companies is limited to merely placing workers at the other company's disposal;
- the supplying company has no activity or organisation of its own;
- the supplying company lacks the means to carry out its activity;
- the supplying company does not act as the employer.
The consequences are shared. Under Article 43 of the Workers' Statute, both companies are jointly and severally liable for the worker's obligations, and the worker can choose to become a permanent employee of either company.
Do you need an ETT to hire in Spain through a recruitment agency, a contractor or an EOR?
No. The ETT rules apply when someone hires a worker for you in Spain and places that worker at your disposal in Spain. The three routes foreign companies normally use to build an engineering team in Spain work differently:
- Recruitment agency or headhunter. The agency finds and screens candidates and charges a fee, but it never employs the hire. You, or your EOR, are the employer from day one.
- Contractor (autónomo). A freelance contract is a services agreement directly between your company and the professional, with no third party ceding anyone. The risk to manage here is false self-employment, not the ETT rules.
- Employer of record such as Deel. The EOR is the employer through its own Spanish entity and runs the employment relationship, so the ETT question does not arise for the client.
Equal pay rules for ETT workers in Spain
ETT workers in Spain must receive the same essential working conditions they would have if the user company had hired them directly for the same job. Under Article 11 of Law 14/1994, that covers pay, working hours, overtime, rest periods, night work, holidays and public holidays.
At the end of a fixed-term placement, the ETT worker is also entitled to severance of 12 days' salary per year of service, under Article 11.2 of the same law. These rules make the ETT a tool for temporary cover, not a cheaper way to staff a permanent team.
Which option a foreign company hiring engineers in Spain should use
A foreign company hiring its first engineers in Spain should combine a recruitment partner with an EOR, or hire contractors only for genuinely independent work. An ETT is the right tool for a company already operating in Spain that needs temporary cover, which is rarely the case for an engineering team.
Kulturo, a Barcelona tech recruitment agency, works this way with clients from more than 8 countries: Kulturo runs the search, the hire is employed through its EOR partner Deel, and Kulturo supports relocation and the highly qualified professional (PAC) visa for engineers from outside the EU.