Acquisition Exits and EOR Employees: What Happens to Your Belarusian Team in an M&A

You’ve signed the LOI. Diligence starts Monday. Your team of twelve engineers in Minsk shows up on your org chart, in your Notion, in every board deck — but they’re not employed by you. They’re employed by your EOR. Now the acquirer’s counsel wants a list of every entity that employs someone on the target’s behalf, and your CFO is asking questions you don’t have answers to.

This is the piece you wanted last week. Here’s what actually happens to Belarusian EOR employees in each deal type, how sanctions changed the picture in 2025 and 2026, and the playbook that keeps the team through close.

The short version

• EOR employees are on the EOR entity’s payroll under Belarusian law — not on your target company’s payroll. Standard SPA employee reps don’t quite fit.
• Deal structure matters more than founders expect. A share deal preserves the arrangement; an asset deal doesn’t.
• Sanctions posture bifurcated in 2025 and 2026. US-based acquirers face a materially different landscape than EU or UK acquirers.
• Enhanced due diligence is now baseline for anything touching Belarus, regardless of buyer nationality.
• The Belarus diligence pack should be assembled the week you take the LOI, not the week the buyer asks for it.
• Your EOR is your operational counterparty through the deal. Use them.

Why EOR employees are a different M&A problem

Direct hires and EOR employees look identical on the daily standup. In an M&A, they diverge.

An EOR employee is on the EOR provider’s payroll, under a Belarusian employment contract, protected by the Belarusian Labor Code. Your relationship with the EOR is a commercial service agreement, not an employment relationship with the individual.

That means two contracts are in play in every deal: the employment contract between the EOR and the employee, and the service agreement between the EOR and your target company. Buyers care about both, but for different reasons. Employment continuity is a people question. The service agreement is a change-of-control question. Standard employee representations in an SPA — headcount, comp, benefits, severance, disputes — apply differently to EOR employees, and if your deal counsel hasn’t structured for that, diligence gets messy fast.

The three deal structures and what happens in each

The single most important question in the first week of diligence is what type of deal this is. The answer changes almost everything downstream.

Share deal (equity purchase). The buyer acquires your company’s equity. Your target’s contract with the EOR persists automatically. Belarusian employment continues untouched. This is the cleanest for the team — no novation, no rehire, no gap. But the buyer’s sanctions and legal teams will still audit the EOR arrangement before close, because they inherit it.

Asset deal. The buyer acquires specific assets and contracts, not the entity. The EOR service agreement doesn’t automatically transfer — it needs to be assigned or novated to the acquirer, and the EOR has to consent. The Belarusian employment relationship itself stays with the EOR either way, so the employees are legally insulated, but if the buyer doesn’t want to keep using this EOR, the team is exposed to a change of client mid-employment.

Merger. Cross-border merger mechanics rarely reach into Belarusian employment. Treat it as a share deal with additional corporate-level notification obligations.

Acqui-hire. The buyer wants the people, not the entity. This is where the EOR structure is most valuable. The team can be migrated wholesale to the acquirer’s own EOR or entity in Belarus through a coordinated resignation-and-rehire, with continuous service acknowledged. Done right, the employees experience one Monday where the payslip vendor changed and nothing else did.

Sanctions changed the picture — where things stand in 2026

Any acquirer touching Belarus is going to run enhanced due diligence. The good news: Belarus is not a comprehensively sanctioned country the way Iran or Cuba are. The complicated news: US and EU positions have split, and the split matters for how your deal will run.

The US progressively eased Belarus sanctions from September 2025, and in March 2026 Belaruskali, BPC, and Agrorozkvit were formally removed from the SDN list. The EU has not followed suit, and its investment restrictions, service-provision limits, and mandatory “no-Belarus” contract clauses remain in place. Norton Rose Fulbright’s practical guide on the divergence is the best current overview of what that gap means for corporate transactions.

If your acquirer is US-based. Transactions with non-SDN Belarusian counterparties are broadly permitted, subject to sector-specific rules and enhanced due diligence around Russia circumvention risk via the EAEU. Your EOR relationship is unlikely to be a blocker, but the buyer’s compliance team will want a screening pack — beneficial ownership of the EOR, sanctions clearance on every party in the flow of funds, and documentation showing Belarusian data isn’t being routed to Russian infrastructure.

If your acquirer is EU- or UK-based. Expect a materially harder path. The EU’s most recent sanctions packages mirror Russia measures onto Belarus in expanded form, including cryptoasset provider bans, further import bans, and additional service restrictions — Skadden’s summary of the EU’s 20th sanctions package captures the current perimeter. In practice, many EU strategic buyers will require the Belarusian tail to be wound down or divested as a condition to close, particularly if the acquirer has state or public-sector exposure.

In any case, OFAC and EU officials have designated Belarus as a high-risk country for Russian sanctions evasion. The new standard is enhanced due diligence. The best thing your EOR provider can hand a buyer in week one is a clean, pre-assembled compliance pack.

What acquirers actually ask about your Belarusian setup

You will get a version of this question list within the first ten days of diligence. Prepare answers before you see the DIL:

• Who legally employs each individual on the Belarus team? Show the contracts.
• What is the EOR entity, who owns it, is it or any related party on any sanctions list?
• What personal data flows out of Belarus, to which servers, under what legal basis?
• What IP is created in Belarus, and how is that IP assigned to the target? Is the assignment enforceable under Belarusian law?
• What happens to these employees on change of control — does the EOR service contract have change-of-control triggers or termination rights?
• What are the termination costs and notice obligations if the acquirer wants to wind Belarus down post-close?
• Are any employees on maternity leave, sick leave, or otherwise in a protected status under the Belarusian Labor Code?

The data-flow question is where our Law 99-Z coverage pays off — our guide to employee monitoring and personal data in Belarus walks through the transfer regime that will surface in every buyer’s data-diligence checklist. The short version: US and UK destinations don’t automatically qualify for the “adequate protection” test, and buyers will want to see how you’ve handled that.

The four post-close scenarios (and what each means for the team)

Buyers do one of these:

Keep the existing EOR arrangement. Cleanest for employees. Requires sanctions-clearing the provider, updating the client contact of record, and re-papering commercial terms if the buyer’s procurement team wants standardization. Usually a two- to four-week workstream.

Migrate to the acquirer’s existing EOR or entity in Belarus. A coordinated transition via terminated and rehired employment, ideally with continuing service acknowledged and no pay or benefit lapse. The outgoing and incoming EOR need to run in parallel for a defined window. When done properly, it takes six to eight weeks.

Convert EOR employees to direct employees of a new local entity. The heaviest lift. Worth it for teams of thirty or more, and only if the buyer intends to build in Belarus long-term. Requires entity setup, NPDPC operator registration, payroll and tax registration, and a formal transfer of employment. Three to six months in practice — and requires ongoing EOR support through the transition so the team isn’t in limbo.

Wind down Belarus operations entirely. Most common outcome for EU/UK acquirers with sanctions exposure or brand risk. Requires proper notice under the Labor Code, statutory severance where triggered, and a clean data off-boarding plan. Two to three months from decision to closed payroll, with the biggest variable being how many employees sit in protected categories.

What the Belarusian Labor Code says about all of this

The Labor Code (No. 296-Z of 1999, published on Belarus’s national legal portal) sets the floor for how EOR employees are treated when a deal disturbs their employment. The buyer’s cost model is a function of these numbers.

Notice periods. At minimum one month for termination on employer initiative in most standard cases; longer for liquidation-style redundancy scenarios. Notice can be paid in lieu.

Severance. Statutory severance is triggered by employer-initiated termination on specific grounds. The EOR calculates the amount, but the client company funds it under the service agreement. Budget two to three months of salary per employee as a working assumption; the exact figure depends on grounds, tenure, and contract type.

Protected categories. Pregnant employees, employees with young children, employees on sick leave, and employees on statutory leave cannot be dismissed on most employer-initiated grounds. If any of these categories are included in your wind-down plan, the timing varies significantly.

Vacation accrual. Unused vacation must be paid out at termination. Not usually deal-breaking money, but frequently missed in acquirer models.

Fixed-term vs indefinite contracts. Many EOR contracts in Belarus are fixed-term — the so-called “contract system.” Expiry of a fixed-term contract doesn’t trigger severance; forced termination during the term does. Which type of contract each employee is on can move the wind-down cost meaningfully.

Retention through signing to close

The Belarusian team will find out. Diligence calls, unfamiliar buyers on Zoom, cross-team Slack channels — secrecy has a short shelf life. Plan your comms assuming they already know.

Retention bonuses. On an EOR structure, retention bonuses are paid by the EOR and funded by the client. The mechanics need to survive both signing and close: who books the accrual, who pays if the deal breaks, how the payment is grossed up for Belarusian tax. Set this up before you announce the deal internally.

Equity treatment. If your Belarusian team held stock options in the target, the SPA needs specific language about acceleration, cash-out, or rollover treatment. This is where EOR employees get quietly dropped in drafting, because they’re not on the standard employee schedule. Read the plan documents against the SPA carefully — then read them again.

Buyer communications. Control them. A Zoom call from an unfamiliar US or European executive with no context is the fastest way to lose your senior Belarusian engineer in the last four weeks before close. Agree message, sequencing, and cadence with the buyer before anyone reaches out.

The pre-close playbook

Twelve weeks out — or the moment the LOI lands — start here.

Weeks 12 to 8: build the Belarus diligence pack before you need it. Map every Belarusian employee, contract, and IP assignment. Get sanctions and beneficial-ownership documentation from your EOR. Update any monitoring or data-processing policy that doesn’t meet Law 99-Z. Our guide to hiring in Belarus covers the foundational documents that should already be in place; if any are missing, this is the moment to fix them.

Weeks 8 to 4: run diligence through your EOR. Deliver the buyer a single Belarus pack. Route the buyer’s questions through your EOR as the operational subject-matter expert. Start drafting the transition options — buyers appreciate seeing that you’ve thought about scenarios two, three, and four, not just scenario one.

Weeks 4 to 0: pick a post-close scenario and paper it. Finalize which of the four scenarios applies. Draft novation, migration, or wind-down documents. Agree buyer-side communication with the target. Get retention paperwork signed before the announcement.

Post-close, weeks 0 to 8: execute. Payroll continuity, data transfer under a proper legal basis, contract sign-off, retention payments. The buyer’s PMO will want a weekly checkpoint; your EOR should be on that call.

How your EOR fits in

The reason EOR structures survive M&A better than direct-hire arrangements is continuity. Your EOR remains the legal employer of your Belarusian team through the deal — the employees’ contracts don’t change, their pay doesn’t change, their tax status doesn’t change. What changes is the client of record on the service agreement.

That continuity is the point. A good EOR partner does three things through a deal:

• Assembles the diligence pack the buyer’s compliance and legal teams need — before they ask.
• Coordinates with the acquirer’s own EOR or entity if migration is the plan, and handles the wind-down cleanly if it isn’t.
• Absorbs the operational conversations with the buyer so the founder can stay focused on getting the deal done.

FAQ

Do EOR employees count as target-company employees in the SPA?

Usually not — legally they’re contractor-of-a-contractor from the target’s perspective — but the buyer will diligence them as if they were employees, and the buyer’s post-close scenarios will treat them as employees for practical purposes. Get your deal counsel to handle this explicitly; don’t leave it in the standard employee schedule.

Can our acquirer just take over the EOR contract?

Depends on deal type and on the EOR’s consent. In a share deal, the contract usually persists automatically. In an asset deal, you need a novation. Good EOR contracts have cooperation-through-change-of-control language; if yours doesn’t, address it now, not during diligence.

Our acquirer is a US company — is there a Belarus problem?

Not typically. Belarus is not comprehensively sanctioned under US law. The current OFAC program targets designated parties and specific sectors, not the entire economy. Enhanced due diligence is expected; blocking outcomes are rare unless a designated party is in the transaction chain.

Our acquirer is EU-based — what changes?

A lot. The EU’s sanctions posture is materially broader, and the trend since 2024 has been to mirror Russia measures onto Belarus in expanded form. Many EU strategic buyers will condition close on winding down the Belarusian tail, particularly acquirers with state or public-sector customers. Plan for that possibility from the LOI, not the day the term sheet is signed.

What happens to stock options held by our Belarusian team?

Depends entirely on your plan documents. This is one of the most common oversights in EOR-heavy acquisitions — the option schedule doesn’t neatly include or exclude EOR employees, so the treatment gets ambiguous in drafting. 

What happens to our team’s personal data during due diligence itself?

Buyers will want mapped data flows and cross-border transfer documentation. Under Law 99-Z, the outbound transfer of employee data during diligence to buyer counsel in the US or UK isn’t automatically covered by existing consents. A data-diligence-specific consent, or a seller-controlled data room with anonymized extracts, is the standard fix. A useful primer on Belarusian employee data protection is Grata’s overview.

Can our EOR unilaterally exit during a deal?

Contractually, a well-drafted EOR agreement doesn’t allow this — there are cooperation obligations that survive change of control. If your agreement is silent, get an amendment signed before you announce the transaction internally. Talk to us if you want a review before the LOI lands.

An acquisition does not automatically mean losing your Belarusian team. But protecting that continuity requires preparation before signing and close.

If an M&A is on the horizon, contact us to review your Belarusian EOR structure, identify potential issues, and plan the transition.