Employer of Record (EOR) vs setting up your own entity in Kazakhstan: Which is better?
- Gegidze • გეგიძე | Marketing
- Jul 31
- 11 min read
Updated: Jul 31
Table of contents:
Introduction
Two developers. Fluent in Python, based in Almaty. Ready to start Monday.
Your product roadmap depends on them.
But your legal team? Still stuck figuring out how to open a local entity in Kazakhstan.
Weeks go by.
One candidate takes a job in Berlin. The other ghosts your recruiter.
Sound familiar?
Hiring in Kazakhstan can feel like an operations maze, especially when you’re scaling fast but the legal structure isn’t in place yet. And if you're expanding into Central Asia for the first time, the big question hits you early:
Do we set up our own entity, or use an Employer of Record (EOR)?
An entity gives you control, but also complexity.
An EOR gives you speed and compliance, but with less direct ownership.
What’s the right call for your company?
That depends on your headcount, your timeline, your risk tolerance, and your long-term vision.
In this guide, we’ll break down everything you need to know from setup costs and legal risk to hiring speed and payroll management, so you can decide whether to build your foundation yourself or plug into one that’s already built.
Understanding Employer of Record (EOR) services in Kazakhstan
Let’s start with the basics without the fluff.
An Employer of Record (EOR) in Kazakhstan is a local company that hires employees on your behalf. You get the team. The EOR takes care of everything else: contracts, payroll, taxes, benefits, and compliance.
You manage the work.
The EOR handles the legal side.
No need to register a company.
No tax ID.
No local HR or legal hires.
Just a fast, compliant way to build your team and get to market.
What’s included when you use an EOR?
At Team Up, EOR services in Kazakhstan cover:
Employment contracts drafted in both Kazakh/Russian and English
Payroll processing with correct tax withholdings and salary disbursement in tenge
Pension and social contributions are handled monthly
Mandatory benefits like paid leave, sick days, and workplace insurance
Onboarding/offboarding support
Ongoing compliance monitoring to stay aligned with Kazakh labor laws
All for a flat monthly fee per employee, so you’re not dealing with unexpected legal bills or accounting surprises.
Why companies choose EOR in Kazakhstan
If you're hiring one or two employees, testing the market, or don’t have the time or resources to manage a local entity, EOR is the fastest and safest route.
You can:
Hire in 7–10 days
Scale up or down quickly
Stay fully compliant without building local infrastructure
Focus on growth, not government filings
What it takes to set up your own entity in Kazakhstan
So you’re thinking about going the long way—setting up your own legal entity in Kazakhstan. Full control. Your name on the door. Long-term commitment.
Here’s what that really involves.
Step-by-step: How to register a company in Kazakhstan
Choose a legal structure: Most foreign companies go with a Limited Liability Partnership (LLP). It’s flexible, and it’s the standard route for doing business in Kazakhstan.
Reserve your company name: Must be unique, in Kazakh or Russian, and approved by the Ministry of Justice.
Register your business: Submit your founding documents through the Government’s eGov portal or in person. You’ll need a local address, a company charter, and identification for your founders.
Obtain a Business Identification Number (BIN): This is your tax ID, and it’s required to open a bank account, hire staff, and make payments.
Open a corporate bank account: In a local Kazakh bank, denominated in tenge. Requires certified documents and, often, a local director.
Register with tax authorities and social fund: You’ll need to file for VAT (if applicable), set up payroll tax accounts, and register for social insurance contributions.
Hire a local accountant or outsource payroll: Monthly reporting is mandatory—even if you’re not generating revenue yet.
How long does this take?
4 to 8 weeks on average, but that assumes you have local legal support and all documents ready.
Any missing paperwork, translation errors, or unclear ownership structures? That adds delays. And yes, most documents need to be in Kazakh or Russian, and notarized.
Who is this for?
Setting up your own entity makes sense if:
You’re hiring 20+ employees
You’re opening a physical office
You’re committing to long-term operations in Kazakhstan
You want to own every part of the local process—from contracts to compliance
If you need local infrastructure, entity-level tax benefits, or plan to apply for tenders or licenses under your own name, this route can pay off.
But make no mistake: this is not lean or fast. And if you're testing the market or hiring a small remote team, you're paying to build systems you won’t fully use.
The admin burden
Running a local entity in Kazakhstan means:
Managing monthly payroll tax filings
Drafting compliant employment contracts
Keeping up with labor law changes
Hiring legal, accounting, and HR support
Preparing for annual audits—even with a small team
All while managing your core business.
Key differences at a glance
At first glance, both routes get you to the same place: hiring in Kazakhstan. But the journey? Totally different.
If you’re deciding between using an Employer of Record or setting up your own entity, this table cuts through the noise and shows exactly how each option plays out in practice.
Feature | EOR | Own Entity |
Setup Time | 7–10 days | 6–8 weeks |
Monthly Costs | Fixed fee + salary | Payroll + admin + legal + HR |
Compliance Risk | Handled by EOR | Your responsibility (with legal exposure) |
Control | You manage the team, and EOR handles the legal side | Full control over all local operations |
Ideal For | Fast hiring, remote teams, and test markets | Physical office, 20+ hires, long-term ops |
If you're launching a small team or hiring your first engineer in Kazakhstan, an EOR gets you in the door fast, compliant, and without the paperwork pile-up.
But if you're opening an office, scaling a large team, and ready to deal with audits and HR admin? Setting up your own entity might make sense.
Cost comparison in detail
Let’s break down the numbers.
Whether you’re hiring one backend engineer or building a 10-person support team in Almaty, costs add up fast, especially when you’re managing taxes, contracts, and compliance from abroad.
Here’s what you’re really paying for when you go with an Employer of Record (EOR) versus setting up your own legal entity in Kazakhstan.
Hiring through an EOR: one fee, everything covered
With Team Up’s cost to use the EOR in Kazakhstan, you pay a flat monthly fee per employee€199/month.
What’s included:
Employment contracts (Kazakh + English)
Payroll processing and salary disbursement in tenge
Tax calculations and monthly filings
Pension and social fund contributions
HR admin, compliance checks, and record keeping
Onboarding, offboarding, and documentation
No surprise invoices. No extra legal retainers.
Just a predictable, compliant setup you can scale.
Setting up your own entity: up-front fees + recurring costs
Going the entity route means taking on setup, staffing, and compliance yourself.
Typical first-year costs:
Item | Estimated Cost (USD) |
Company registration & legal setup | $2,000–$4,000 |
Notarization & translation services | $500–$1,000 |
Bank account setup | $300–$600 |
Local accounting support | $200–$500/month |
Payroll service or software | $100–$300/month |
Internal HR/legal staff or retainer | $500–$1,000/month |
Government filings & tax compliance | Recurring, monthly & annual |
Year 1 total? Easily $7,000–$12,000 before salaries.
And that’s assuming everything runs smoothly—delays, errors, or compliance gaps could lead to fines or extra legal fees.
Let’s compare
Scenario | EOR | Own Entity |
Hiring 1–5 employees | €199–€299/month/employee | ~$10,000+ setup + monthly overhead |
Hiring time | 1 week | 6–8 weeks |
Admin staff required | None | Yes (accountant, HR, legal) |
Flexibility to scale down | Easy | Harder—ongoing fixed costs |
Cost transparency | High single invoice | Low—multiple vendors + filings |
Unless you’re planning to build a large, long-term team with deep local roots, an EOR is usually faster, cheaper, and cleaner.
Payroll, taxes, and compliance management in Kazakhstan
Hiring in Kazakhstan isn’t just about finding talent; it’s about paying them the right way, at the right time, and according to local law. Get it wrong, and you’re looking at government penalties, disgruntled employees, or worse, being blacklisted from operating locally.
Here’s what payroll and compliance actually look like on the ground, and why using an EOR can keep you out of legal trouble.
Payroll obligations: not just salaries
In Kazakhstan, paying employees goes far beyond wiring a monthly amount. Here’s what you’re responsible for if you’re managing it directly:
Personal Income Tax (PIT): Withheld from the employee’s salary (10%)
Social Tax: Paid by the employer (9.5%)
Mandatory Pension Contributions: 10% of gross income, deducted from the employee
Social Health Insurance Contributions
Monthly tax filings and payments to the State Revenue Committee
Currency regulations: Salaries must be paid in Kazakhstani tenge (KZT)
Local payslips and record keeping
If you’re not based locally, navigating this alone is a full-time job. And tax legislation in Kazakhstan changes often, especially around social payments.
What happens if you miss something?
Late filings = fines + interest
Incorrect tax deductions = back payments owed
Employee misclassification = legal penalties
Non-compliant contracts = lawsuits or invalid terminations
And yes, the authorities do check, especially for foreign-owned companies without a visible HR presence on the ground.
How an EOR keeps you compliant
When you use Team Up’s EOR service in Kazakhstan, compliance is handled from day one.
Contracts drafted to the local labor code
All payroll taxes are calculated, withheld, and filed properly
Pension, health, and social payments are submitted monthly
Government reports and audit logs are maintained for you
You stay out of legal gray zones, even as laws change
You focus on building your team. We handle the paperwork that protects it.
Employment contracts and HR administration
Hiring in Kazakhstan without a solid employment contract is like building a house with no foundation. It might stand for a while, but one dispute, one inspection, one law change, and everything cracks.
Kazakhstan’s labor code is strict, detailed, and written to protect employees. If you're planning to hire directly, your contracts better be airtight.
What the law requires
Here’s what employment contracts in Kazakhstan must include:
Language: Contracts must be written in Kazakh or Russian (or both). English versions are helpful, but not legally binding.
Mandatory clauses: Start date, job title, salary in tenge (KZT), working hours, place of work, responsibilities, leave entitlements, and termination rules.
Notice periods: Typically 1 month for standard termination, longer for management roles or mass layoffs.
Probation: Allowed, but capped at 3 months, and must be clearly defined in writing.
Termination grounds: Must be aligned with national labor law—anything outside that framework could void the contract.
If you skip any of the above, your contract isn’t valid, and your risk? Sky-high.
Managing contracts with your own entity
If you’re going solo, you’re also taking on:
Drafting contracts in Kazakh or Russian
Updating them when employment laws change
Keeping physical and digital records in local formats
Handling amendments, promotions, and contract extensions
Managing offboarding, terminations, and severance
That means hiring a local lawyer or HR consultant, or risking penalties for every contract mistake.
With Team Up’s EOR, contracts aren’t your problem
When you use our EOR service in Kazakhstan, we take care of the full contract lifecycle:
We draft compliant employment agreements in Kazakh, Russian, and English
We ensure all mandatory terms are included and up-to-date
We handle renewals, amendments, and exits
We manage employee files and HR documentation
We stay ahead of labor law changes, so you don’t have to
You approve the offer and salary. We turn it into a bulletproof, legally binding contract, ready to go.
What about HR administration?
With your own entity, you’ll need a local HR manager or outsourced support to:
Track leave and sick days
Handle onboarding/offboarding paperwork
Issue payslips and certificates
Manage grievances and disputes
Store contracts and employee records securely
With Team Up, all of that is built into your monthly EOR fee.
Equipment and workspace management
Let’s talk about the stuff no one puts in the job ad, but always comes up after the contract’s signed.
Who buys the laptop?
Is your employee working from a coworking space or their kitchen table?
And who’s liable if something breaks?
These aren’t just logistical details; they’re legal and operational obligations. And how you handle them depends entirely on whether you’re hiring through an EOR or running your own entity.
Equipment: Who’s responsible?
When you set up your own entity in Kazakhstan, the responsibility is clear: you are the legal employer, which means:
You must provide essential equipment (like laptops, monitors, etc.)
You’ll need written documentation outlining ownership and return policies
If something gets lost, stolen, or damaged, you’re on the hook, unless you’ve created protective clauses in advance
Cross-border shipping? Good luck navigating customs clearance and import tax without a local partner
With an EOR, you get options:
You decide whether to ship equipment, offer a stipend, or let employees use their own devices
Team Up includes equipment terms in the employment contract
We collect signed receipts and return agreements from your employee
If you offer a hardware budget, we handle reimbursements locally and track purchases
You stay hands-off. Your employee gets what they need to work. And everyone’s protected.
Workspace: remote, hybrid, or office?
Remote work is common in Kazakhstan, especially in IT and professional services. But labor laws still apply regardless of where your employee works.
With your own entity, you’re expected to:
Ensure remote setups meet health and safety standards
Provide ergonomic gear or coworking stipends (or document why not)
Track working hours and provide documentation during audits
Maintain a local office address (yes, even if the team is remote)
With Team Up’s EOR, we simplify it:
Workspace arrangements, remote, hybrid, or coworking, are outlined in the contract
You choose what’s provided; we document it
We help you offer monthly coworking stipends if needed
We ensure that health and safety language is included in contracts
Onboarding and asset tracking
When you’re hiring directly, onboarding logistics fall on you, from collecting ID documents to tracking equipment loans.
Through EOR, Team Up handles:
Onboarding paperwork collection (passport, tax ID, etc.)
Asset tracking forms for devices and peripherals
Clear documentation of who owns what
Offboarding protocols to recover or retire hardware securely
EOR vs direct contractors or PEOs
Kazakhstan has no patience for contractor misclassification. If you're paying someone as a "freelancer" but managing their hours, setting deliverables, and expecting exclusivity, you’re crossing into employee territory. And the fines aren’t light.
That’s why understanding the difference between EORs, contractors, and PEOs isn’t optional; it’s critical.
Misclassification risk is real
Kazakhstan’s labor authorities are clear: if someone functions like an employee, they must be hired as one with a valid contract, payroll taxes, and social contributions.
If not, your company could face:
Back taxes and pension contributions owed
Penalties for illegal employment
Audits of your entire local operation
Legal action by the worker (even if they agreed to the setup)
Bottom line? Freelance contracts are great for short-term, low-control work, but dangerous if used to bypass labor law.
Why won’t PEOs work here?
A Professional Employer Organization (PEO) co-employs your staff, sharing HR responsibilities with you. But here’s the catch:
PEOs require you to have a legal entity in Kazakhstan.
So if you're trying to hire without opening an entity, a PEO is a dead end. You need either:
A full entity setup (and all the admin that comes with it), or
An EOR model where the local company becomes the legal employer on your behalf.
When EOR is the only compliant option
If you don’t have a local presence in Kazakhstan but want to hire long-term, manage daily work, and avoid legal risk, an EOR is your only compliant solution.
It gives you:
Legal employment without entity setup
Payroll, taxes, and benefits handled
Full compliance under Kazakh labor law
Protection from misclassification penalties
Side-by-side comparison
Feature | EOR | PEO | Direct Contractor |
Legal entity required | No | Yes | No |
Legal employer | EOR (on your behalf) | You (with co-employment) | None (contractor only) |
Compliance coverage | Full compliance handled | Shared with your entity | Your responsibility |
Misclassification risk | None | Low (if structured correctly) | High if role resembles employment |
Use case | Hiring without an entity | Scaling with a legal entity | Project-based, independent work |
Payroll & benefits | Included | Shared | Not provided |
If you want full control and compliance without opening a company, EOR is the route that keeps your hiring legit, fast, and future-proof.
Conclusion: What’s best for your business?
If you’ve made it this far, you already know: hiring in Kazakhstan isn’t just a “yes” or “no” decision; it’s how you do it that makes or breaks your expansion.
So, which option fits?
Setting up your own entity gives you full local control. But it also gives you six weeks of paperwork, ongoing admin costs, and legal responsibility for every contract, payslip, and filing. It makes sense if you're building a large, permanent team or opening a physical office.
Using an Employer of Record lets you hire in a week, stay 100% compliant, and avoid getting buried in bureaucracy. It’s ideal if you’re entering the market for the first time, hiring remotely, or just don’t want to deal with Kazakh tax law every month.
At Team Up, we help you hire full-time employees in Kazakhstan legally, quickly, and without setting up a local entity. You stay focused on growth. We handle the contracts, payroll, benefits, and compliance.
Want to test the market before going all in?
Start with one hire via EOR.
Scale when it makes sense.
Switch to your own entity later, on your terms.
Let’s make hiring in Kazakhstan fast, simple, and legally clean.