Hiring in Azerbaijan

The contract sets out role, salary in AZN, working time, leave, notice and any restrictive covenants. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Contracts are signed electronically and registered in the state employment system before the start date. Azerbaijani is the standard contract language, usually with a parallel English version.

Fixed-term contracts are permitted, but one that runs uninterrupted for more than five years becomes indefinite, and most EORs default to indefinite terms.

Set probation from day one. Since January 2026, ending a contract during probation needs a reasoned, documented decision, not just a finding that the employee failed.

Some EORs shorten probation as policy because they, not you, carry the dismissal risk. Ask before you agree a start date.

Overtime is paid at no less than double the hourly rate, needs the employee's consent and is capped at 4 hours across two consecutive days.

There is no exemption for professional or senior roles, so overtime stays a statutory cost rather than a contractual one. Put the position in writing either way.

Many managerial and specialist roles qualify for 30 calendar days by law, and length of service adds up to 6 more, so check the category before you budget. Holidays that fall on a weekend move to the next working day, which added eight extra days off in 2026.

The employer pays the first 14 days of sick leave and the state social fund covers the rest. Maternity leave is 126 days funded by social insurance, and since January 2026 fathers get 14 days of paid leave, so confirm which costs the EOR carries.

The employer can only dismiss on grounds listed in the Labour Code, and notice can be replaced with a payment only if the employee agrees. Redundancy severance is a fixed statutory formula, from 1 to 2 times average monthly salary depending on tenure.

The EOR runs the process as the legal employer and will want the paperwork in order, including the termination order in the state system, final pay and all unused leave. Trade union members need union consent for redundancy, and courts can order reinstatement with back pay, so keep a documented reason.

Supplementary private medical cover is standard for professional roles even though the state scheme is mandatory. Meal and transport allowances are also common.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Employer contributions add roughly 17% to 19% on top of gross salary at typical professional pay. That is before the EOR fee, and salary must be paid in manat.

The 2026 tax change is the trap. The income tax holiday for non-oil private sector staff ended on 1 January 2026, and the lowest band rises from 3% to 5% in 2027 and 7% in 2028, so agree in writing whether offers are quoted gross or net.

Ask whether the EOR sponsors directly or refers to a partner. Only the locally registered entity can apply for the permit, so a partner-model EOR depends on its partner to sponsor, and the quota and local labour market test apply to that entity, not to you.

Permits run for up to a year and renew a year at a time, with the application due at least 30 days before expiry. Set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. Transfers abroad are restricted to countries with adequate protection, and sharing employee data with third parties generally needs the employee's written consent.

Ask where payroll data is hosted, whether the information system is registered locally, and who in the partner chain can see it.

Incorporation here is quick, but the running cost is the point: accounting, monthly tax and social insurance filings, electronic contract registration and payroll software set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Activity carried on for 90 cumulative days or more in any 12-month period can create a taxable presence, and staff who build and manage a client base for a non-resident count, regardless of the employment route.