Expanding into the Asia Pacific region offers huge opportunities—fast-growing markets, diverse talent pools, and strong demand for digital solutions. But for companies hiring across borders, the challenges can be overwhelming. Each country has its own employment laws, payroll rules, tax systems, and visa processes. Misunderstanding these compliance requirements can lead to penalties, delays, and wasted resources.
This is where an Employer of Record (EOR) becomes invaluable. An EOR acts as the legal employer on your behalf, helping you navigate complex regulations while you focus on business growth. Whether you are hiring developers in Vietnam, designers in Malaysia, or product managers in Singapore, EOR services in Asia Pacific make global expansion simpler and more compliant.
This article explores how EOR works, why it is the most cost-effective hiring method for global teams, and how you can stay compliant with local employment regulations across the Asia Pacific.
What Is an Employer of Record (EOR)?
An Employer of Record is a third-party organisation that acts as the legal employer of your overseas staff. While you manage the day-to-day tasks, the EOR handles the legal and administrative responsibilities.
A reliable EOR provides:
- Employment contracts compliant with local laws
- Payroll processing and salary disbursement
- Managing payroll taxes and deductions
- Benefits administration
- Handling work permits and visas
- Adhering to employment regulations
- Compliance with local labour laws
- Contributions to statutory funds (such as the EPF) in Malaysia)
With an EOR, companies can hire talent globally without opening local entities or risking non-compliance.
Why Companies Choose EOR Services in Asia Pacific
Asia Pacific is one of the world’s most dynamic regions. But it is also one of the most complex when it comes to legislation. Countries follow their own frameworks, such as the Employment Act (Malaysia), the Labour Code (Vietnam), or the Industrial Disputes Act (India).
Because of this complexity, many global companies rely on record EOR services to scale faster and reduce administrative burden.
1. Faster Market Entry Without Setting Up an Entity
Setting up a legal entity can take months and require multiple approvals. With an EOR, you can hire in days—not months.
This creates a smooth and compliant market entry into countries like:
- Indonesia
- Thailand
- Singapore
- Malaysia
- Vietnam
- India
Companies use EORs to test new markets or launch operations quickly without committing to a full local setup.
2. Effortless Compliance With Local Employment Laws
Each country has its own rules regarding:
- Minimum wage
- Working hours
- Taxes
- Insurance
- Statutory benefits
- Termination procedures
- Leave entitlements
An EOR has legal experts who ensure your team is hired through fully compliant legal employment structures. This protects your company from fines, disputes, or legal complications.
3. Cost-Effective Hiring for Global Teams
Building an entity is expensive. Beyond legal fees, companies must handle:
- Local tax registration
- HR administration
- Bank account setup
- Ongoing reporting
- Local audits
Using an EOR eliminates these costs and replaces them with predictable monthly fees—making it the most cost-effective global hiring solution.
4. Seamless Payroll Processing Across Borders
Managing payroll across several countries presents challenges:
- Different pay schedules
- Multiple currencies
- Country-specific deductions
- Social contributions
- Tax filings
An EOR centralises all payroll processing and ensures accurate, lawful payments—every month, without delays.
5. Support for Work Permits and Immigration
Navigating visa rules is one of the toughest parts of international hiring. An EOR assists with:
- Work permits
- Employment Passes
- Visa renewals
- Documentation and submission
- Local sponsorship requirements
This ensures smooth onboarding for foreign employees working in Asia Pacific.
6. Lower Risk for Global Expansion
An EOR reduces risks by ensuring you stay compliant with:
- Local tax laws
- Hiring standards
- Employment regulations
- Social security contributions
- Statutory filing deadlines
This allows your team to focus on growth while the EOR manages your operational and legal obligations.
Key Employment Laws You Must Understand in Asia Pacific
Hiring in Asia Pacific requires an understanding of each country’s unique employment laws and statutory obligations. Below are three major markets, Malaysia, Vietnam, and India, and the key regulations employers must follow when hiring talent.
Malaysia — Employment Act 1955
Malaysia’s labour laws are governed primarily by the Employment Act 1955 and various amendments. Key requirements include:
- Written employment contracts outlining salary, working hours, and benefits
- EPF (Employees Provident Fund) contributions by both employer and employee
- SOCSO and EIS social security contributions
- Overtime regulations with specific pay rates
- Minimum leave entitlements, including annual leave, sick leave, and maternity leave
- Termination procedures that must follow statutory notice periods
- Compliance with local labour inspections and reporting requirements
An EOR helps ensure that contracts, payroll, and benefits comply fully with Malaysia’s labour standards.
Vietnam — Labour Code 2019
Hiring in Vietnam is regulated by the Labour Code 2019, which governs employment relationships, benefits, and workplace standards. Key compliance areas include:
- Mandatory written employment contracts based on job type and duration
- Statutory contributions to Social Insurance, Health Insurance, and Unemployment Insurance
- Standard working hours (48 hours per week, unless otherwise specified)
- Required overtime pay rates, including weekends and holidays
- Minimum wage regulations that vary by region
- Mandatory annual leave allocations
- Detailed termination procedures, including valid grounds for dismissal
- Obligations for occupational safety and health
EOR services ensure all employment practices follow Vietnam’s strict labour laws and regional variations.
India — Labour Codes & State Regulations
India has one of the most complex labour ecosystems in Asia. Employment laws consist of a blend of central labour codes and state-specific regulations. Key compliance requirements include:
- Employment contracts that clearly outline roles, compensation, and conditions
- Monthly contributions toward EPF (Employees’ Provident Fund) and ESI (Employee State Insurance)
- Strict rules around working hours, weekly offs, and overtime
- Compliance with minimum wage laws, which differ by state and job category
- Mandatory leave entitlements such as casual leave, sick leave, and earned leave
- Gratuity payments for employees with more than 5 years of continuous service
- Detailed termination and retrenchment rules, requiring notice and severance
- Additional state-level regulations governing shops, establishments, and factories
An EOR helps companies navigate India’s layered and state-specific compliance environment while ensuring payroll accuracy and legal employment.
How EOR in Asia Pacific Helps You Navigate Complex Regulations
Navigating Asia Pacific’s regulatory landscape without specialised knowledge is challenging. Employment laws vary widely across countries, and even minor mistakes in contracts, payroll, or statutory filings can lead to penalties or hiring delays. An Employer of Record (EOR) removes these risks by managing every regulatory requirement on your behalf. Here’s how:
1. Creating Country-Compliant Employment Contracts
Every country in Asia Pacific has its own rules regarding employment agreements. An EOR drafts fully compliant, locally accepted employment contracts that align with:
- Local labour laws
- Mandatory clauses such as probation, working hours, and termination terms
- Statutory benefits and entitlements
- Role-specific or industry-specific requirements
This ensures every hire is legally protected, reducing the chance of disputes or contract invalidation.
2. Managing Payroll and Benefits
Payroll in Asia Pacific is complex due to varying tax systems, social contributions, and reporting schedules. An EOR handles:
- Monthly payroll processing
- Accurate calculations based on local tax brackets
- Deductions for pension funds, insurance, and social security
- Currency conversions where required
- Administration of employee benefits such as health insurance, allowances, paid leave, and bonuses
This ensures employees receive timely, error-free payments while the company remains fully compliant.
3. Ensuring Compliance With Local Authorities
Each country requires employers to manage a series of regulatory obligations, such as:
- Income tax submissions
- Social security filings
- Employment insurance contributions
- Annual reports and labour audits
An EOR monitors all deadlines and handles every filing directly with government bodies. This prevents late submissions, inaccuracies, or compliance breaches. Read more about this in our article on Leveraging Employer of Record (EOR) Services to Simplify Global Hiring.
4. Minimising Legal and Financial Risks
Hiring without understanding local law can expose companies to major risks, including:
- Misclassification of employees
- Incorrect tax submissions
- Penalties for non-compliance
- Termination disputes
- Visa or work permit violations
An EOR ensures your hiring process follows all employment regulations and aligns with local authorities’ expectations. This lowers legal exposure and protects your business reputation.
5. Providing Local HR Support
Employees often face questions about:
- Leave entitlements
- Benefits
- Tax deductions
- Probation terms
- Local labour protections
An EOR provides on-the-ground HR support in the employee’s language and time zone. This improves communication, boosts employee satisfaction, and allows your internal HR team to stay focused on strategic needs rather than country-specific issues.
6. Centralising Multi-Country Workforce Management
If you’re hiring across several Asia Pacific markets, an EOR acts as a single point of coordination for:
- Payroll
- HR support
- Employment contracts
- Statutory contributions
- Compliance updates
This removes the need to work with multiple local vendors and ensures consistency across your global workforce.
Is EOR Better Than Setting Up a Local Entity?
In most cases, yes, using an Employer of Record (EOR) is far more practical, efficient, and cost-effective than setting up a local legal entity in a new country. For companies exploring the Asia Pacific region, an EOR removes nearly all barriers that typically slow down international hiring. Here’s why:
1. Faster Hiring
Setting up a company entity usually takes months, requiring:
- Legal registration
- Local tax setup
- Opening corporate bank accounts
- Appointing local directors
- Securing office addresses
- Compliance approvals
With an EOR, you can hire employees in 1–2 weeks because the EOR already has an established legal entity in that country. This is ideal for companies that need to scale quickly, test new markets, or hire talent without delay.
2. Lower Costs
Building and maintaining a legal entity involves substantial costs, including:
- Lawyers and consultants
- Government filing fees
- Accounting and auditing fees
- Payroll systems
- HR personnel
- Office requirements
- Ongoing compliance reporting
An EOR eliminates these expenses, replacing them with a simple monthly fee per employee. This makes EOR one of the most cost-effective ways to hire internationally, especially for small or mid-sized teams.
3. Zero Legal Risk
When you hire through an EOR, the EOR acts as the legal employer. This means:
- The EOR carries legal liability
- The EOR ensures compliance with local employment laws
- Your company avoids risks related to misclassification, incorrect contracts, and regulatory breaches
If disputes or compliance issues arise, the EOR manages them—not you.
4. No Administrative Burden
Hiring directly requires managing every part of the employment lifecycle:
- Payroll processing
- Benefits administration
- Local tax filings
- Social contributions
- Employment documentation
- Local HR support
- Work permit paperwork
With an EOR, all of this is handled for you, freeing your internal team from tons of operational work. You focus on managing your employee’s day-to-day performance, and the EOR handles everything else.
5. Full Compliance With Local Laws
Every Asia Pacific market has its own rules for:
- Working hours
- Overtime
- Leave entitlement
- Minimum wage
- Social contributions
- Taxes
- Termination procedures
An EOR ensures you follow all employment regulations automatically. This prevents costly mistakes and protects your company from penalties or forced back payments.
6. Flexibility to Scale Up or Down
Expanding into new countries can be unpredictable. An EOR allows you to:
- Hire one person or build a small remote team
- Scale quickly without new entities
- Close roles without shutting down a company
- Enter or exit markets without long-term commitments
This flexibility is impossible with a legal entity, which is expensive to set up—and even more expensive to close.
When Does a Local Entity Make Sense?
Setting up a legal entity is helpful only when:
- You plan to build a large team in that country
- You are making a long-term investment
- You require licenses or approvals that can only be obtained through an entity
- You need to invoice customers locally
- Your presence requires a physical office or long-term infrastructure
If none of these apply, an EOR is almost always the better option.
Ready to Hire Remote Tech Talent in Asia Pacific?
Building global teams does not have to be complicated. With the right EOR partner, you can hire top talent quickly, stay compliant with employment laws, and focus on scaling your business.
Contact us today to hire exceptional remote tech talent across Asia Pacific.
Frequently Asked Questions (FAQ)
Q1. What does an Employer of Record actually do?
A1: An EOR acts as the legal employer for your overseas staff. They handle payroll, taxes, contracts, statutory benefits, and compliance so you can manage daily tasks without legal risk.
Q2. Is an EOR compliant with local employment laws?
A2: Yes. A core function of EOR services is ensuring full compliance with all local employment regulations, tax rules, and statutory contributions.
Q3. Who should use EOR services in Asia Pacific?
A3: EOR services are ideal for companies that want to expand quickly, hire remote talent, or test new markets without opening a local entity.
Q4. How long does it take to hire through an EOR?
A4: Most hires can be onboarded within 1–2 weeks, depending on the country and background check requirements.