Employer of Record (EOR) in Azerbaijan 2025: the complete hiring guide
- Gegidze • გეგიძე | Marketing
- 4 days ago
- 13 min read
Table of Contents
Why Azerbaijan Is on the radar in 2025
If you’re only looking at Poland, Portugal, or the Philippines, you’re missing the real story.
Azerbaijan is quietly becoming one of the most overlooked hiring plays of 2025.
Here’s what most companies don’t realize:
The country is home to a fast-growing, tech-savvy workforce that’s flying under the radar.
You’ll find developers, analysts, and support pros with EU-standard education, fluent English, and salaries 30–50% lower than Western Europe.
Add in:
Zero restrictions on remote work
A simplified flat income tax
Government incentives for IT and foreign investment
Time zone alignment with both Europe and MENA
And suddenly, Baku isn’t only a beautiful capital, it’s a strategic hiring hub.
While others fight for talent in oversaturated markets, smart teams are setting up quietly in Azerbaijan without opening an office or drowning in paperwork.
This guide shows you exactly how to do it, step by step.
What Is an Employer of Record (EOR) and Why Use One?
Hiring in another country usually comes with red tape. You need a local entity, a registered office, legal staff, a payroll system, and time. A lot of it.
An Employer of Record (EOR) is a faster, simpler way to hire internationally, without setting up a company in that country.
Here’s how it works:
An EOR like Team Up becomes the legal employer of record for your team member in Azerbaijan. You still manage the work. You set the salary. You define the roadmap.
We handle everything else:
Compliant employment contracts (in Azeri and English)
Monthly payroll and tax payments in AZN
Social security and pension reporting
Paid leave, sick leave, and labor law compliance
Local onboarding and offboarding
No need for lawyers, registrations, or months of delay. Just one monthly invoice and a fully legal, fully supported hire.
If you're scaling smart and fast, this isn’t a workaround, it’s how global teams hire now.
The real challenges of hiring in Azerbaijan without an EOR
On paper, Azerbaijan looks like an easy place to hire. In practice? Not without local infrastructure.
If you’re thinking of hiring without an EOR, here’s what you’re signing up for:
You can’t hire legally without a local entity
There’s no “lightweight” workaround. To legally hire, you must:
Register a company
Open a bank account in AZN
Register with the State Tax Service and Social Fund
Handle regular filings and audits
This isn’t a form you fill out online. It’s a multi-step process that can take months.
Employment contracts must follow Azeri labor law
That means:
Written in Azerbaijani (bilingual contracts allowed)
Clearly defined salary (in AZN), job duties, and probation terms
Local leave entitlements, notice periods, and severance rules
Miss something? You risk fines or labor disputes.
Payroll and taxes aren’t beginner-friendly
You’ll need to calculate:
Progressive income tax (up to 25%)
Social security and unemployment fund contributions
Military tax if applicable
And submit filings on a monthly basis
This isn’t optional, and errors can lead to fines or frozen accounts.
You carry all the legal risk
Employee misclassification, late payments, botched offboarding, it’s all on you. No “we didn’t know” defense.
If you’re not opening a full office, going solo makes no sense.
With an EOR like Team Up, you hire in days, not months, and stay fully compliant.
What it looks like to hire through an EOR in Azerbaijan
So you’ve got a great candidate in Baku. They’re ready to go.
But you don’t have an Azerbaijani entity, don’t speak the language, and don’t have 3 months to figure it all out.
Here’s how it works with TeamUp:
Step 1: You find the hire
Recruitment is yours. We don’t touch it.
You run interviews, negotiate salary, and make the offer.
Let’s say you’re hiring a mid-level backend engineer at $2,000/month gross. You give us the green light.
Step 2: We handle everything local
Within 1–2 business days, we:
Draft an employment contract in Azerbaijani (with an English version for you)
Register your hire with the State Tax Service and Social Protection Fund
Set up payroll, social security, and pension contributions
Handle any additional paperwork they need for benefits
Timeline: Most hires are fully onboarded in 5–8 business days.
Step 3: Your employee starts working
From Day 1, they work for you.
They use your tools, join your Slack, follow your roadmap.
We handle:
Monthly payroll in AZN, paid on time
Tax withholding (~20–25% depending on income)
Social security filing
PTO tracking, sick leave, and offboarding (if needed)
Step 4: You get one clean invoice
Everything, gross salary, taxes, military duty, and EOR fee, rolled into one monthly invoice.
No guesswork. No surprise bills. Paid in USD or EUR.
You stay focused on the product. Your hire gets a local, legal job with proper protections. And we make it all feel easy.
Labor law, tax & compliance overview
Let’s be real: you don’t need a law degree to hire in Azerbaijan, but you do need someone who knows how the rules work.
Because while the labor code is fairly straightforward, one wrong move in a contract or tax filing can lead to fines, delays, or worse, loss of trust with your employee.
Here’s what matters most, without the fluff:
Contracts must follow local labor law
You can’t just copy-paste your US or UK offer letter.
Azerbaijani law requires:
A written employment contract in Azerbaijani (bilingual versions are allowed)
Defined salary in AZN (Azerbaijani Manat)
Job title, scope of work, location (even if remote), and working hours
Contract type (fixed or indefinite), probation period (usually up to 3 months), and termination terms
Clear provisions for paid leave and public holidays
With TeamUp, we draft and sign these contracts locally, so you're compliant from Day 1.
Work hours, time off, and public holidays
Standard workweek: 40 hours (5 days, 8 hours/day)
Paid annual leave: at least 21 working days (plus national holidays)
Sick leave: Allowed, but often requires a doctor’s certificate
Overtime rules apply for work outside standard hours
There are over a dozen public holidays, and yes, they must be observed
Income tax & social contributions
Azerbaijan uses a progressive income tax system:
Monthly Income (AZN) | Income Tax Rate |
Up to 2,500 AZN | 14% |
2,500+ AZN | 14% on first 2,500 + 25% on the rest |
Other mandatory contributions:
Social Security (employer side): 22% (for private sector)
Unemployment Insurance: ~0.5%
Military Duty: Small monthly amount (~AZN 10–20) based on salary
We calculate, file, and pay all of this, so you don’t have to learn local tax codes or open a bank account in Baku.
Termination rules (don’t skip this part)
Letting someone go in Azerbaijan? You’ll need:
Written notice (commonly 1–2 weeks depending on cause)
Severance pay if it’s due to redundancy
Documentation if performance or behavior is the reason
Final payroll and legal closeout filings
Mess this up and it’s not just a bad exit, it can become a legal headache.
With Team Up, terminations are handled legally, respectfully, and by the book.
In simple terms, you don’t need to master the Azerbaijani labor code. You just need a local partner who already has.
How much does it cost to use an EOR in Azerbaijan?
(Spoiler: less than setting up a company, and a lot faster)
Hiring in Azerbaijan through an EOR isn’t only cheaper than setting up a local entity, it’s predictable too.
You get one monthly cost per employee. No surprise taxes, no lawyer fees, no late-night Google sessions about Azerbaijani payroll law.
Here’s what actually matters when budgeting:
Step 1: Set the gross salary
Let’s say you’re hiring a mid-level engineer at:
$2,000/month (gross salary)
That’s a competitive rate for top tech talent in Baku in 2025.
Step 2: Add mandatory employer contributions
As an employer in Azerbaijan, you’re responsible for:
Contribution | Rate | Cost on $2,000 salary |
Social Security (pension, etc.) | 22% | $440 |
Unemployment Insurance | ~0.5% | ~$10 |
Military Duty Tax | Fixed fee | ~$10–$20 |
Total employer taxes: ~$460–$470/month
Step 3: Add TeamUp’s flat EOR service fee
€199/month → approx. USD 215
Covers everything:
Legal employment contract (in Azerbaijani + English)
Payroll processing in AZN
Tax filings, reporting, and payments
Leave tracking, onboarding, and offboarding
HR and local support
Final monthly cost summary
Item | Amount (USD) |
Gross Salary | $2,000 |
Employer Contributions | ~$460 |
TeamUp EOR Fee | ~$215 |
Total | ~$2,675 |
What you get for that price:
Fully legal, compliant employment
One clean invoice
No tax risk
No local setup headaches
Your team runs without red tape
What you can offer through an EOR in Azerbaijan
Hiring in Azerbaijan through an EOR isn’t only for staying compliant, but to show your team that you’re serious.
Yes, the legal minimum is easy to meet. But if you’re trying to hire the top 10% of candidates, especially in tech, finance, or operations, compliance alone isn’t enough.
Through TeamUp’s EOR service, you can do both: stay 100% legal and build a job offer that competes with what international companies are already bringing into the market.
Start with the legal essentials
These are required by Azerbaijani labor law, and TeamUp handles them for you:
A legit, local contract
We issue a full employment contract under Azerbaijani law, bilingual, fully compliant, and tax-registered. No gray area. Your hire gets a real job, not a freelancer deal.
Paid leave and protected time off
Paid Time Off (PTO): After 6 months of employment, all full-time employees are entitled to 21 working days of paid vacation per year. We track it. We file it. You just approve requests.
Sick Leave: Paid sick leave is covered and calculated based on your employee’s tenure and social insurance contributions. We manage the documentation and ensure it’s handled correctly with local authorities.
Public Holidays: Azerbaijan officially recognizes 19 public holidays from Nowruz Bayram to Victory Day. Your hires get the time off, and we handle the calendar planning.
Maternity Leave: Female employees are entitled to 126 calendar days of fully paid maternity leave 70 days before birth and 56 days after. We file and track it, so there are no surprises or missteps.
Paternity leave: While there’s no official paid paternity leave, fathers can take up to 14 days of unpaid leave following the birth of a child. We help structure this based on your policy.
Public holidays in Azerbaijan
January | March | May | June | July | September | October | November | December |
1 - New Year’s Day | 8 - International Women’s Day | 9 - Victory Day | 15 - National Salvation Day | 2 - Police Day | 27 - Day of Remembrance | 18 - Independence Day | 9 - State Flag Day | 31 - Solidarity Day of World Azerbaijanis |
2 - New Year’s Day | 20 - Novruz Holiday | 28 - Republic Day | 26 - Armed Forces Day | 12 - Constitution Day | ||||
21 - Novruz Holiday |
This isn’t “take time off if you need it.” It’s proper, tracked PTO, something serious candidates in Azerbaijan respect.
Your hire gets a stable, compliant job. You stay fully covered.
Then add what actually attracts top talent
Top candidates in Baku and Ganja are seeing offers from EU companies, remote platforms, and regional tech startups. To compete, you should consider:
Perk | Why it matters in Azerbaijan |
Private health insurance | Not required, but a major differentiator, especially post-COVID |
Coworking access | Remote is rising, but most workers expect a funded space to work |
Laptop & equipment setup | Many expect the employer to provide or subsidize gear |
Internet/phone stipends | Small cost, big impact, especially for remote roles |
Learning budgets | Global companies offer these. Local ones don’t. You win. |
TeamUp sources, implements, and runs these benefits through local payroll, so they’re tax-compliant and easy to manage.
You get:
One payroll
One point of contact
One monthly invoice
And your employee gets:
A real job
Local support
A reason to stay
EOR vs payroll outsourcing in Azerbaijan
They might sound alike. But only one works if you’re hiring without borders.
If you’re looking to hire in Azerbaijan, it won’t take long before you run into two terms: Employer of Record (EOR) and payroll outsourcing. They both mention compliance. They both say they handle taxes. But the truth? They solve completely different problems.
And if you choose the wrong one, you’ll hit a wall (fast).
Here’s what you actually need to know:
Payroll outsourcing in Azerbaijan
Payroll outsourcing is for companies that already have a legal presence in Azerbaijan.
That means:
You’ve registered a company with the Ministry of Taxes
You’ve opened a local AZN bank account
You’ve registered with the State Social Protection Fund
You’re managing local contracts and handling any legal issues
Payroll outsourcing just runs the numbers. You’re still the legal employer. That means you handle contracts, terminations, audits, compliance, and all the HR risk that comes with it.
Use payroll outsourcing if:
You already set up an entity in Azerbaijan
You have in-house legal and HR support
You want help running payroll but still want full local control
Employer of Record (EOR) in Azerbaijan
An Employer of Record (EOR) is for companies without a local entity.
If you want to hire in Azerbaijan but don’t want to spend three months registering a business and hiring a local accountant, this is the option for you.
With TeamUp as your EOR, we become the legal employer on paper. You manage the team. We manage the legal structure.
That includes:
Local employment contracts in Azerbaijani
Monthly payroll in AZN with tax and social contributions handled
Paid leave, sick leave, maternity, termination, all covered
No bank account, no entity, no legal exposure for you
Use an EOR if:
You want to hire quickly without setting up a company
You’re testing the Azerbaijani market
You’re hiring one to ten employees and need local support
You want legal peace of mind with minimal overhead
The reality in Azerbaijan
Payroll outsourcing is a tool. EOR is a solution.
If you’re already operating in Baku, great. But if you’re not and you want to tap into top-tier talent across Azerbaijan without delays or risk, go with EOR.
Looking for speed, simplicity, and compliance?
EOR wins. Every time.
How to choose the right EOR in Azerbaijan
Not all EORs belong in Baku.
If you’re hiring in Azerbaijan and want it to actually work, don’t pick the first EOR with a slick website and global map.
This market is different.
It’s not just running payroll. But a strong understanding of local tax thresholds, handling maternity and sick leave correctly, navigating bilingual contracts, and avoiding the quiet red tape no one tells you about until it’s too late.
Here’s what to look for if you want to hire fast, stay legal, and build trust with your team from Day One.
1. Look for a legally registered EOR in Azerbaijan
Plenty of global EORs claim to cover Azerbaijan. Most don’t actually operate here. They subcontract to third parties and hope nothing breaks.
Ask these questions:
Do you have your own legal entity in Azerbaijan?
Who signs the contracts?
Who handles tax filing and employment records locally?
If they’re vague, they’re not the one.
2. Choose an EOR that handles full local compliance
Hiring in Azerbaijan means staying compliant with the Labor Code, social fund contributions, and employment protections that are enforced, especially during offboarding.
Ask:
How do you manage paid leave tracking?
Do you handle terminations under local rules?
How fast do you update contracts when regulations change?
If they say, "we'll get back to you on that," walk away.
3. Pick an EOR that supports your people like a local employer would
Your hire isn’t a contractor. They’re your employee. And in Azerbaijan, they’ll expect proper onboarding, real HR support, and benefits that match or exceed local expectations.
Ask:
Do you provide employee support in Azerbaijani?
Can we offer private health insurance or coworking access?
How do you handle maternity or sick leave?
If your hire gets ignored, you’re the one who looks bad.
4. Confirm EOR pricing is transparent and all-inclusive
Azerbaijani labor is cost-efficient. But if your EOR inflates FX rates, adds extra HR “consulting” fees, or charges for every ticket, your budget’s toast.
Ask:
Is pricing flat per person or based on salary?
Are onboarding, offboarding, and reporting included?
Is local equipment and benefits management part of the service?
You should get one number. One invoice. Zero guesswork.
5. Your EOR in Azerbaijan should move fast
Whether you’re hiring in Baku or Ganja, onboarding should take days, not weeks. If you’re scaling fast, your EOR should keep up.
Ask:
How quickly can we hire someone?
Can we switch a contractor to full-time legally?
Will we have a dedicated account manager?
If their timelines sound like a government office, keep looking.
Is an EOR right for Your Team?
If you’ve made it this far, you’re probably not asking “what is an EOR”, you’re asking, should we actually use one?
Here’s the truth:
Azerbaijan has talent. The cost is attractive. The infrastructure is reliable. But unless you’re already set up locally with a legal entity, payroll system, tax ID, and local HR support, you’re going to hit friction fast.
That’s where an EOR makes sense. It’s not just a legal workaround. It’s a hiring strategy built for remote-first companies that need to move fast, stay compliant, and scale smart without borders.
An EOR is the right move if you...
Want to hire in days, not months
Don’t have a registered company in Azerbaijan
Need to stay fully compliant with local labor laws and tax systems
Want to offer health insurance, PTO, and coworking access without managing vendors
Are you testing the market or hiring a small, focused team
Want to manage the work, not the paperwork
An EOR might not be the best fit if you...
Are building a large, long-term physical presence in Baku
Already have an in-country entity and HR/legal team
Need full legal ownership and control over every contract and policy
If you’re scaling lean, building remote, and want to tap into real talent without legal friction, an EOR is your edge.
Bottom line
Azerbaijan isn’t some wildcard market. It’s a calculated move.
skilled talent. competitive salaries. time zone alignment with Europe and the MENA region, and a labor system that rewards companies who play it straight.
But you can’t just show up and start sending contracts. The local system is clear, but strict. Compliance isn’t optional. and setting up your own entity takes time you don’t have.
That’s why smart, remote-first teams are using eors.
With the right partner, you get the team you want, fully employed, fully legal, without opening an office, hiring lawyers, or running local payroll yourself.
Team Up gives you the infrastructure, support, and flexibility to build in Azerbaijan with zero friction.
no red tape. no risk. no overhead. just results.
If you’re ready to hire in Azerbaijan, don’t wait.
We’ll get your first employee up and running in under 10 days.
Frequently asked questions (FAQs)
What is an employer of record (EOR) in Azerbaijan?
An EOR is a third-party company that legally employs your team on your behalf in Azerbaijan. You manage the work, the EOR handles payroll, tax compliance, employment contracts, social contributions, and HR support, without requiring you to set up a local legal entity.