Thailand offers a stable and attractive business environment suitable for global expansion. As evidenced by Statista, 99% of the Thai population was employed in 2023. Buttressing the country’s economic strength, McKinsey highlights a 2.3% GDP growth rate in the second quarter of 2024, up from 1.6% in the first quarter.

However, while Thailand’s labor market is rich with opportunities, hiring and managing local talents poses challenges. Strict compliance requirements, cultural nuances, and administrative burdens can complicate the entire process.

That’s where a Thailand Employer of Record (EOR) steps in. As a third-party organization, a Thailand employer of record legally hires workers, manages payroll, and ensures compliance with local employment regulations on behalf of your company.

If you’re looking to explore Thailand’s skilled workforce while minimizing risk and administrative challenges, this article will guide you on how an EOR Thailand can expand your business seamlessly.  Whether you aim to hire Thai employees, stay compliant, or streamline your operations, this guide will give you the tools for a successful workforce expansion in Thailand.

Benefits of Using Employer of Record Thailand

30% of APAC countries use EOR services to solve hiring problems, retain talent, and tackle other international expansion challenges. Beyond that, an EOR in Thailand benefits companies in these ways:

Hire local talent

Expanding your workforce in Thailand poses several challenges. Traditionally, it involves establishing a legal entity, registering the company, opening local bank accounts, creating a legal team, organizing compensation and benefits, and adhering to local laws. All these take several months and are usually expensive.

But with an employer of record Thailand, you can hire employees that align with your business needs and company culture without setting up a local entity. An EOR Thailand sources, hires, and supports foreign workers throughout the employee lifecycle. They also draft employment contracts and manage your overseas payroll while you retain total autonomy over your workforce in your base country.

Compliance

An EOR Thailand has in-depth knowledge of local laws regarding taxation, employee rights, severance, global payroll, benefits, and intellectual property. For instance, the Labour Protection Act B.E. 2541 mandates all employers to provide annual holidays of no fewer than six working days to Thai employees who have worked consistently for one year. Similarly, employers must give workers at least one hour of rest after every five working hours.

Navigating these complex legislations can be a hassle if you’re new to the Thailand employment landscape. It becomes worse if you have other global teams you’re trying to build compliantly, as you may encounter mix-ups and oversights.

Hence, a Thailand PEO relieves HR teams of the burden of getting familiar with these Thai labor laws, ensuring your company legally and efficiently manages its workers for global compliance. Ultimately, an employer of record Thailand saves organizations from financial losses, fines, and other legal penalties accompanying non-compliance.

Read next: The 2024 HR Compliance Checklist: APAC Edition

Risk Mitigation

Building a global team is fraught with legal and compliance risk factors. But you don’t have to worry about breaching any employment regulation when you hire an employer of record Thailand. With their knowledge of Thai law, they easily evade penalties, fines, and disputes among employees. 

For example, they understand complex areas like termination procedures, working hours, rest periods, and severance pay. This adherence reduces the legal and financial risks associated with breaking laws, ensuring your company gets a compliant workforce. 

Cost effective

Creating a local subsidiary or branch is costly, especially regarding office space, local staffing, business registration, and recurring administrative expenses. However, hiring employees through an EOR Thailand is cost-effective as it eliminates these time-consuming, expensive processes. 

Focus on core business

Hiring a Thailand employer of record empowers HR leaders to focus on core business needs while outsourcing time-consuming administrative tasks, such as onboarding new hires, paying salaries, or offboarding existing staff. 

This strategy frees up workloads and allows HR teams to manage their time efficiently while concentrating on strategic business activities that advance organizational growth.

How does an EOR Thailand work?

Here’s how a Thailand employer of record acts as the legal employer for your Thai workforce:

1. Hiring process

An Employer of Record Thailand helps your business find and hire the right talent during recruitment. They know the demands of the Thai local job market and the job portals, like JobsDB, to find the right talent. All you need to do is specify your preferred candidate requirements. Your EOR Thailand will scout candidates, schedule screening interviews, and eventually recruit the best Thai talents while ensuring the entire process complies with labor regulations.

2 Employment contract

After recruiting a new hire, a Thai employer of record drafts an employment contract that complies with Thai labor laws, protecting both the employee and the client company. The employment agreement includes crucial terms such as job scope, start date, salary, benefits, working hours, rest days, probation periods, and termination policies like notice periods and severance pay.

3. Payroll and benefits

Once the Thailand EOR legally employs a candidate, they set up payroll for the new employee and prepare payslips every month. First, they choose a payroll system compliant with government regulations and your company policy, then assign workers Tax Identification Numbers (TIN). They also calculate and process pay in Thai Baht and withhold tax, insurance contributions, and other mandatory deductions for compliance.

Read next: How to Run Payroll in Thailand

4. Compliance

A PEO Thailand stays informed of any regulatory updates, such as minimum wage adjustments, tax rates, or new labor protections. They ensure these changes are reflected in employment activities such as proper documentation and statutory filings.

This streamlined compliance helps you avoid administrative burdens and legal consequences, allowing you to focus on other crucial business operations and employee relationships. 

5. HR administration

An employer of record Thailand provides continuous support for employees and manages routine HR tasks, such as onboarding, payroll, taxation, benefits, employee relations, performance reviews, and disciplinary actions. They become the main point of contact between your Thai hires and your company for HR-related matters.

Things to Consider When Choosing Employer of Record Thailand

Consider the following features before choosing an EOR Thailand:

Local expertise

Before investing in a Thailand employer of record, evaluate their knowledge and experience with the Thai hiring environment. Ensure the Thailand EOR thoroughly understands the local employment regulations and compliance requirements, including the Labor Protection Act (LPA), tax implications, Social Security Fund contributions, work permits, and other crucial Thai-specific labor laws.

This expertise is necessary to navigate the Thai employment landscape and avoid legal penalties. Furthermore, the PEO Thailand must be familiar with local customs, culture, and business practices and have established networks that ease their operations.

Compliance track record

Non-compliance can cost your company financial losses and reputational damage. So, when choosing an EOR Thailand, review their track record for achieving compliance, especially regarding payroll processing, taxation, and benefits administration.

Check for reviews on third-party sites to ensure that your chosen Thailand employer of record is well-experienced and competent in handling delicate business matters for clients.

Service offerings

Confirm if the EOR Thailand services meet your company’s needs and growth trajectory. This is important as your business may need to scale up or down, depending on its needs.

Regardless, an ideal employer of record Thailand offers a comprehensive HR package that includes advisory services, hiring, work permit applications, payroll management, employee contracts, and termination.

Technology platform

Weigh the HR tools and global payroll solutions the PEO Thailand uses for onboarding, employee relations, payroll processing, and communication to ensure compliance with local regulations. A centralized, secure, and user-friendly technology platform is necessary for achieving compliance, efficiency, data accuracy, and clear communication between your company, the EOR, and your employees.

References and testimonials

Check for industry reviews, client testimonials, and case studies on third-party sites like G2 or Trustpilot that prove the PEO Thailand has a great work ethic and a track record of success. Also, request references from past and present clients who have used their services in Thailand. If the feedback is positive, the Thailand employer of record will likely deliver excellent services. 

Challenges and Risks for Thailand Employer of Record

Managing global teams for businesses presents several challenges for employers of record Thailand. Here’s an overview:

Complex Thailand employment law

Thai labor legislation is subject to frequent changes, including laws regarding taxation, employee protection, employment contracts, benefits, and termination. So, if your PEO Thailand doesn’t adapt to evolving regulations, it can cause increased costs, fines, operational delays, labor disputes, or other legal penalties. The solution is to hire a PEO Thailand with a strong legal team that keeps up with regulatory changes.

Employer of record Thailand selection

Since Thailand has many employers of record, choosing the right provider can be challenging, especially when all of them claim to be the best. A helpful tip is to thoroughly research and assess the reputation of different EOR Thailand companies before partnering with any. Some EORs may claim to have local expertise but have limited knowledge of specific industry practices or niche legal requirements in Thailand. 

Also, check for transparent, responsive, and flexible services that match your organizational objectives, budget, and business needs.

Protecting employee data

Hiring an employer of record Thailand means handing over your employment affairs to a third-party provider. As such, you may encounter risks regarding employee data protection and breaches. Hence, an employer of record Thailand must have robust data protection standards to protect your corporate information and intellectual property.

Thailand’s Personal Data Protection Act (PDPA), which took effect on 1 June 2022, regulates and protects how businesses handle personal data. It applies to all businesses operating in Thailand and foreign businesses offering services or products to Thai residents. 

Frequently Asked Questions for Employer of Record Thailand

1. What is an EOR?

An Employer of Record is an independent organization that manages all employment-related tasks for companies without establishing a local legal entity.

2. How long does it take to hire an employee through an employer of record Thailand?

Hiring a Thai employee through an EOR Thailand typically takes one to three weeks, depending on the role’s complexity, the candidate’s availability, and the required documentation processes.

3. What are the costs associated with using an employer of record Thailand?

The costs of using an EOR in Thailand typically include monthly service fees based on the number of employees managed, payroll expenses, setup costs, and bank charges. Although the EOR administers them, you’ll need to cover the cost of hiring Thai workers, including salaries, contributions, employee benefits, and termination fees.

4. Can I terminate an employee through EOR Thailand?

Yes, you can terminate an employee through a PEO in Thailand. However, the offboarding process must comply with Thai labor laws to meet all legal requirements regarding notice periods and severance payments.

5. Does an employer of record Thailand provide benefits to employees? 

Yes, a Thailand employer of record administers employee benefits as part of their service. This includes health insurance, retirement contributions, paid leave, and other statutory benefits the local law requires. However, not all EORs do this; some may focus solely on legal compliance and payroll. So, identify your company’s needs and ensure the EOR services align with them.

6. Can an employer of record Thailand help with visa and work permit applications?

Yes, a Thailand Employer of Record can help with visa and work permit applications for Thai employees. They’re well-versed in local regulations and are the legal employers responsible for handling all employment-related tasks, including obtaining work permits and visas.

Maximize Your Business Potential with Employer of Record Thailand

An employer of record Thailand can be a valuable asset for businesses looking to expand into the Thai market. By partnering with a reliable and reputable EOR, you can streamline your HR processes, mitigate risks, access global top talents, reduce costs, and enhance your company’s reputation in Thailand. 

Omni makes it easy to support employees across multiple countries, time zones, and currencies.

Our centralized document management solution makes gathering the necessary data required to apply for employment visas and other country-specific initiatives seamlessly and timely. With customized workflows and automated reminders, HR can help empower employees to manage the deadlines and documentation requirements for applications. And centralized documents and real-time data makes it easy for employees to access salary information and produce reports and documents necessary for verification.

Omni offers a comprehensive payroll solution tailored to Thailand’s specific requirements. With features like support for Thai baht and automated tax calculations, Omni can help HR teams simplify their payroll processing and ensure compliance with ease. Not only that, with secure document storage and straightforward data input, you can quickly access and submit essential information required for working in Thailand.

Our dedicated local team of experts provides personalized support and ensures your business remains compliant with Thailand’s labor laws. Book a demo with our team to learn more about how Omni can help maximize your business potential.

The Philippines is an attractive place to do business in. With a high English literacy rate, a growing economy and a robust tech sector, it’s no wonder that as of 2024, Philippines has an employment rate of 95.5% — its highest on record.

If your organization has plans to expand to the Philippines, it needs to be ready for the complexity that goes along with it. One solution to mitigate these potential problems is working with an employer of record Philippines (EOR or PEO Philippines). Having a representative to handle the HR and legal issues with local expertise can be a game changer.

In this guide, we’ll look at everything you need to know about EOR Philippines, and help you take the necessary steps to hire one and get set up for success.

Relevant reading: What Is a Professional Employer Organization (PEO)? Understanding the Pros & Cons

Benefits of Using Employer of Record Philippines

Expanding your business to the Philippines opens up a world of opportunities, but navigating the ins and outs of hiring and compliance in a new country can feel overwhelming. That’s where an Employer of Record (EOR) shines. They become your trusted partner in the Philippines, handling all the legal and HR heavy lifting so you can focus on what you do best—running your business.

Hire local talent

The Philippines has a highly educated and talented workforce, especially in fields like IT, engineering, customer service, and healthcare. With an EOR, you can quickly access this pool of talent and find the perfect member for your team.

Setting up a legal entity in a foreign country can be a major headache (and a drain on your resources). An EOR lets you skip that step entirely, allowing you to hire employees in the Philippines without the hassle of establishing a local presence.

Compliance

Navigating the complex and ever-changing labor laws in the Philippines can feel like a maze. An EOR acts as your guide, ensuring you stay compliant and avoid any legal trouble.

Non-compliance can lead to hefty fines and other headaches. An employer of record Philippines takes on the responsibility of staying up-to-date with local laws, so you can breathe easy knowing you’re in good hands.

Risk mitigation

When you use an EOR, they become the legal employer of your workers in the Philippines. That means they take on the legal and financial responsibilities, reducing your exposure to risks.

An EOR manages employee benefits and ensures you’re meeting all the mandatory social security requirements. This takes a big load off your plate and minimizes potential liabilities.

Cost effective

Starting a company in a new country isn’t cheap. An EOR helps you avoid those hefty setup costs and ongoing expenses.

Managing payroll, benefits, and compliance for international employees can stretch your HR team thin. An EOR takes care of all that, so your team can focus on strategic initiatives and growing your business.

Focus on core business

An employer of record Philippines handles all the nitty-gritty HR tasks, so you can spend more time on what really matters – growing your business and achieving your goals.

With an EOR taking care of the hiring and compliance maze, you can onboard new employees quickly and enter the Philippine market without missing a beat.

How does EOR Philippines work?

Now that we’ve looked at what an EOR is, you’re probably wondering how it all actually works in the Philippines. Let’s break down the typical process:

1. Hiring process

Find your talent: You go about your usual recruitment process—post job ads, interview candidates, and find the perfect fit for your team.

EOR takes over: Once you’ve selected someone, the EOR steps in. They handle all the official hiring paperwork, like generating compliant employment contracts and ensuring any necessary work permits or visas are in place.  

You stay in control: You still get to manage the employee’s day-to-day work, provide feedback, and assign tasks, just like any other team member.

2. Employment contract

Local expertise: The EOR makes sure all employment contracts comply with Philippine labor laws and regulations. This includes things like minimum wage, leave entitlements, and termination procedures.  

No more legal jargon worries: You don’t need to be an expert in Philippine employment law. The employer of record Philippines ensures all contracts are legally sound and protect both you and your employee. 

3. Payroll and benefits

Payroll made easy: The EOR handles all the calculations and processing of payroll, including tax deductions and mandatory contributions like SSS contributions, PhilHealth, and Pag-IBIG.  

Benefits management: They can also help you set up and administer employee benefits, ensuring compliance with local requirements and offering attractive packages to your team.  

On-time payments: Forget about missed paydays. The EOR ensures your employees receive their salaries on time, every time.  

4. Compliance

Labor law expertise: The EOR stays on top of the ever-changing labor laws and regulations in the Philippines, ensuring your company remains compliant and avoids any legal headaches.  

Tax and social security: They handle all payroll tax calculations, deductions, and remittances to the relevant authorities, as well as manage your employees’ social security contributions.  

Work permits and visas: If you’re hiring foreign workers, the EOR can assist with obtaining the necessary work permits and visas, navigating the complex immigration process on your behalf.  

5. HR administration

Onboarding and offboarding: The EOR handles the entire employee lifecycle, from onboarding new hires to managing terminations and exit procedures, in compliance with local laws.  

Time and attendance tracking: They can implement systems to track employee attendance, leaves, and absences, ensuring accurate payroll calculations and adherence to company policies.  

Employee data management: The EOR maintains secure and up-to-date records of all employee data, including personal details, employment contracts, and performance reviews.

Employee support: They can act as a point of contact for your employees in the Philippines, addressing their queries and concerns regarding payroll, benefits, and other HR matters.  

In essence, an EOR takes the complexity out of managing your Philippine workforce. They act as your local HR partner, handling all the administrative, legal, and compliance aspects of employment, allowing you to focus on growing your business and achieving your strategic goals.  

Things to Consider When Choosing EOR Philippines

Selecting the right employer of record Philippines is crucial for a smooth and successful global expansion in the Philippines. With several providers vying for your attention, it’s important to be discerning and make an informed decision. Here are five key factors to consider:

Local expertise

In-depth knowledge of Philippine laws: Make sure your EOR has a deep understanding of Philippine labor laws, tax regulations, and compliance requirements. They should be able to navigate the complexities of the local legal landscape and ensure your company stays on the right side of the law.

Cultural awareness: A successful EOR should also have a strong grasp of Filipino workplace culture and communication styles. This will help them bridge any cultural gaps and facilitate smooth interactions between you and your employees.

Compliance track record

Look for an EOR with a proven track record of compliance in the Philippines. Ask for references from other companies they’ve worked with and research their reputation in the industry.

Make sure to choose an EOR that is transparent about their compliance procedures and can provide evidence of their adherence to local laws and regulations.

Service offerings

Beyond basic payroll and tax services, a good EOR should offer a comprehensive suite of HR solutions, including onboarding, benefits administration, employee data management, and even local support for your employees.

Your business needs are unique. Look for an EOR that can tailor their services to your specific requirements and scale with your company as it grows.

Technology platform

An intuitive and easy-to-use platform can simplify payroll and HR management for both you and your employees. The EOR’s system should integrate seamlessly with your existing HR and payroll software to ensure smooth data flow and avoid manual errors.

Choose an EOR that prioritizes data security and has robust measures in place to protect sensitive employee information.

References and testimonials

Don’t hesitate to ask potential EOR providers for references or testimonials from their existing clients. This will give you valuable insights into their service quality, reliability, and customer satisfaction.

Read online reviews and ratings from other businesses that have used the EOR’s services. This can help you gauge their reputation and identify any potential red flags.

By carefully evaluating these five key factors, you can choose an EOR partner that empowers your business to expand seamlessly into the Philippines. Remember, a good EOR is more than just a service provider; they’re your strategic ally in navigating the complexities of global hiring and ensuring your company’s success in a new market.

Challenges and Risks for Philippines Employer of Record

While an EOR can be a game-changer for global expansion, it’s important to be aware of some potential challenges and risks you might encounter when operating in the Philippines:

Complex Philippines employment law

Ever-changing regulations: Philippine labor laws are intricate and subject to frequent updates. It’s crucial to partner with an EOR with deep expertise in local regulations to ensure ongoing compliance.

Cultural nuances: Understanding Filipino workplace culture and expectations is essential for effective employee management. Your EOR should be able to bridge any cultural gaps and facilitate smooth communication between you and your employees.

Employer of record Philippines selection

Finding the right fit: Not all EORs are created equal. It’s crucial to choose a reputable provider with a strong track record, transparent pricing, and excellent customer service.

Due diligence: Conduct thorough research, read reviews, and ask for references before selecting an EOR. Ensure they have experience working with companies in your industry and can handle your specific needs.

Protecting employee data

Data privacy laws: The Philippines has strict data privacy laws, and any mishandling of employee information can lead to severe penalties. Your EOR must have robust data security measures in place and comply with all relevant regulations.

Data transfer: If you’re transferring employee data outside the Philippines, ensure it’s done securely and in compliance with data protection laws.

Frequently Asked Questions for Employer of Record Philippines

1. What is an EOR?

Think of an EOR as your local HR partner in the Philippines. They handle all the legal and administrative aspects of employing staff, like payroll, taxes, benefits, and compliance, even though you’re the one calling the shots on the day-to-day work. It’s a great way to hire talent in the Philippines without having to set up your own legal entity there.

2. How long does it take to hire an employee through an employer of record Philippines?

This can vary depending on the specific EOR provider and the complexity of the role. However, in general, the process can be completed within a few weeks. The EOR will handle all the necessary paperwork and onboarding, making it much faster than setting up your own entity.

3. What are the costs associated with using an employer of record Philippines?

EORs typically charge a monthly fee per employee, which covers their services like payroll, benefits administration, and compliance. The exact cost can vary depending on the provider, the employee’s salary, and the specific benefits package you choose. It’s crucial to get a clear breakdown of fees upfront so there are no surprises.

4. Can I terminate an employee through EOR Philippines?

Yes, you can. However, termination procedures must comply with Philippine labor laws, which can be quite complex. The EOR will guide you through the process, ensuring you follow all the necessary steps and minimize any legal risks.

5. Does an employer of record Philippines provide benefits to employees?

Absolutely! A good EOR will help you design and administer a competitive benefits package that complies with local laws and meets your employees’ expectations. This can include health insurance, retirement plans, paid time off, and other perks.

6. Can an employer of record Philippines help with visa and work permit applications?

Yes, they can. If you’re hiring foreign nationals, the EOR can assist with the entire visa and work permit application process, ensuring everything is handled correctly and efficiently.

Maximize Your Business Potential with Employer of Record Philippines

An employer of record Philippines can be a valuable asset for businesses looking to expand into the Philippines market. By partnering with a reliable and reputable EOR, you can streamline your HR processes, mitigate risks, access global top talents, reduce costs, and enhance your company’s reputation in the Philippines. 

Omni makes it easy to support employees across multiple countries, time zones, and currencies.

Our centralized document management solution makes gathering the necessary data required to apply for employment visas and other country-specific initiatives seamlessly and timely. With customized workflows and automated reminders, HR can help empower employees to manage the deadlines and documentation requirements for applications. And centralized documents and real-time data makes it easy for employees to access salary information and produce reports and documents necessary for verification.

Omni offers a comprehensive payroll solution tailored to Philippines’ specific requirements. With features like support for Philippine pesos and automated tax calculations, Omni can help HR teams simplify their payroll processing and ensure compliance with ease. Not only that, with secure document storage and straightforward data input, you can quickly access and submit essential information required for working in the Philippines.

Our dedicated local team of experts provides personalized support and ensures your business remains compliant with Philippine’s labor laws. Book a demo with our team to learn more about how Omni can help maximize your business potential.

With a dynamic economy, growing sectors, highly skilled workers, and impressive cost savings, Malaysia is a hotspot for global business expansion. This is no surprise as the country has maintained its place as the third top country in the 2021 and 2023 Global Services Location Index (GSLI).

Despite favorable conditions, hiring international employees the traditional way can be logistically challenging. This includes setting up a subsidiary, registering the company, and complying with local laws can be burdensome.

Luckily, with an employer of record Malaysia, these tasks can be handled in an efficient and compliant manner. They act as your official employer for the Malaysian workforce, managing HR and payroll processes and ensuring country-specific tax and legal compliance.

Benefits of Using Employer of Record Malaysia

By understanding the benefits of an employer of record Malaysia, you can see what you stand to gain from them and determine if you should hire them.

Hire local talent

With an employer of record Malaysia, you can access a global talent pool that aligns with your business needs.

The EOR Malaysia writes and manages the employment contracts and handles the foreign worker recruitment process in Malaysia, removing the need for establishing a local entity in Malaysia and bringing you closer to your dream of global expansion.

Compliance

When you pass on the logistics of hiring Malaysian employees to an EOR, Malaysia holds them responsible for complying with complex Malaysian employment laws.

Think drafting contracts, employment conditions, termination procedures, immigration laws and regulations, and payroll and taxes (like filing the income tax returns with the IRBM by a specific deadline).

Risk mitigation

You don’t have to worry about breaching international labor laws when you hire an employer of record. Their knowledge of Malaysian law enables them to evade penalties, fines, and legal disputes.

Your Malaysian employees also enjoy fewer risks, working under a legal entity. They feel confident that the employer of record Malaysia provider will withhold the right taxes, plan insurance policies compliantly, issue employee benefits as required by the law, and compensate workers in cases of worksite accidents.

Cost effective

An employer of record Malaysia offers flexible, scalable, and tailored employment solutions. With this, you get access to the Malaysian labor market while keeping costs low. Plus, an EOR Malaysia helps you avoid unnecessary and costly penalties with legal compliance.

Focus on core business

By hiring an employer of record Malaysia, you outsource time-consuming administrative tasks such as onboarding, training, and payroll management. 

With the EOR Malaysia handling these responsibilities and providing resources for the employees they recruit, your company can expand its workforce without being burdened by paperwork. This allows you to focus on your core business operations while benefiting from the EOR’s continuous HR support.

How does Malaysia EOR work?

To understand how the arrangement of an employer of record Malaysia works, we’ll go over the process so that you can make an informed decision.

1. Hiring Process

An employer of record Malaysia streamlines the hiring process by acting as the legal employer for the employees you wish to hire. The EOR Malaysia manages all administrative and compliance-related tasks, including recruitment, onboarding, and contract management, while ensuring that Malaysia labor laws and regulations are met.

Once the candidates are selected, the EOR Malaysia handles payroll, taxes, benefits, and statutory contributions, simplifying the process for businesses. This allows companies to quickly expand their workforce in Malaysia without needing to establish a local entity, while maintaining full operational control over their employees’ day-to-day tasks.

Learn more: Global Hiring Guide: Malaysia

2. Employment contract

When you hire an employer of record, Malaysia requires a written employment contract, which they draft. They ensure its terms comply with Malaysian labor laws, which vary according to the types of employment contract in Malaysia.

After all, one employment type in Malaysia might have different working hours, conditions, or benefits regulations from another, and the EOR must mind that. The contract must comply with all its regulations concerning:

• Job titles and descriptions
• Compensation and benefits
• Start date and work locations
• Termination
• Resignation
• Confidentiality agreements
• Death and disability
• Dispute resolution policies
• Intellectual property ownership
• Non-compete clauses

3. Payroll and Benefits

With an employer of record, Malaysia businesses delegate them to handle payroll and benefits, allowing them to run the monthly payroll and provide local and global benefits. To illustrate, they add allowances to basic salaries, withhold salary contributions, and issue payslips.

As done by the employer of record, Malaysia mandates certain mandatory benefits to the employees, which are the Employees Provident Fund (EPF), Social Security Organization (SOCSO), and Employment Insurance System (EIS). Optional ones include health insurance and voluntary time off.

4. Compliance

The employer of record complies with Malaysian labor laws (like the Employment Act, which is the main law overseeing employment in Malaysia, and the Industrial Relations, which regulates the relations between employers and employees and trade unions in Malaysia).

Additionally, the EOR ensures compliance when it comes to local taxes, benefits regulations, and termination procedures.

5. HR administration

An employer of record provides local, continuous HR support and conducts global HR processes for outsourced Malaysian hires, including recruitment, onboarding, and performance management.

Things to Consider When Choosing EOR Malaysia

When it’s time to pick an employer of record Malaysia, you can make the most out of EOR services and boost employee satisfaction with the following features:

Local expertise

To an employer of record, Malaysia laws and regulations should be known like the back of their hands. This way, they can follow them in their implementation of HR and payroll processes, immigration procedures, benefits administration, and tax filing.

Also, EORs should typically have established networks that can connect you with Malaysian talents. Not to mention, they’re expected to be familiar with local customs, culture, and business practices, which help them navigate cultural nuances.

Compliance track record

How is the EOR’s compliance track record looking? Are they responsive enough to keep you updated about their HR and payroll duties, experienced enough to run their services smoothly, and transparent about their processes? Verify their social proof, and ensure that there aren’t legal issues, compliance breaches, or negative reviews about them.

By confirming that their track record is clean, you can feel confident handing over your business’s compliance liability.

Service offerings

What range of services is available by the EOR in question? Each business has its specific EOR needs, so how well does each provider serve them? Think payroll, fringe benefits management, compliance requirements, HR integrations, streamlined databases for maintaining employee records, and financial packages.

Technology platform

Ideally, you should seek an employer of record that provides access to remote management tools and global payroll solutions, which adhere to local regulations and payroll deadlines.

This software may help with employee onboarding (like signing local employment contracts), payroll processing, and benefits administration. It may alert you to local regulation updates and ensure that your business remains fully compliant and error-free.

References and testimonials

To verify an employer of record Malaysia track record, you look at references, reviews, and testimonials. Looking at current and former clients’ reviews, ratings, and testimonials on unbiased sites tells you how satisfied they are with the EOR Malaysia services.

Challenges and Risks for Malaysia Employer of Record

Understanding the challenges for an employer of record Malaysia enables you to optimize the process, anticipate potential hurdles, and prepare for them so that hiring an EOR only benefits your business.

Complex Malaysia employment law

Malaysian labor laws and regulations are certainly complex. Mostly falling under the Employment Act of 1955, this legislation regulates payroll, tax filing, working hours, working arrangements, working conditions, time off, benefits, and overtime.

The complexity within any piece of legislation comes from minding different factors, such as economic growth, employee well-being, living costs, and social issues. It attempts to be fair to all employees while minding their different social, gender, religious, and economic backgrounds.

Along with that, it does so while ensuring that the rights of employees don’t present a burden on employers to the point where it impacts economic growth negatively.

As an employer, you don’t want to spend more time maneuvering the complexities of Malaysian employment law than on your business operations, which is where an employer of record Malaysia comes in.

Employer of record Malaysia selection

There is no shortage of EOR services, and you may find it challenging to pick the right one for your needs. 

For one, you need to look for transparent, responsive, and flexible services. Additionally, you want to define your goals clearly, evaluate the EOR service provider’s global presence and level of expertise, assess the suitability of their offerings for your needs, determine if they’re right for your budget, and look into their software integrations. 

After testing several EOR services based on these factors, you can select the ideal one for you.

Protecting employee data

When you hire an employer of record Malaysia, you’re relying on a third-party provider, so there are risks related to employee data protection.

An employer of record must protect employee data by complying with the Personal Data Protection Act 2010 and processing data security. For that, they need robust data protection and secure technology for the protection of corporate information and intellectual property.

Frequently Asked Questions for Employer of Record Malaysia

1. What is an EOR?

An employer of record is the registered employer of the workers you’re recruiting, taking on the legal responsibility of their hiring, recruitment, salaries, management, and HR processes and leaving you to oversee the day-to-day business operations.

2. How long does it take to hire an employee through an employer of record Malaysia?

With an employer of record, Malaysia hires can enter your workforce within days (compared to four to 12 weeks otherwise). This is due to the fact that an EOR has an entity in Malaysia and an on-call network of potential hires.

3. What are the costs associated with using an employer of record Malaysia?

When you hire an EOR, you pay a setup fee, deposit, ongoing EOR service fee (on a typically monthly basis), and FX fee (to cover currency exchanges if you’re paying in a different currency). Although the EOR administers them, you need to cover the cost of hiring foreign workers in Malaysia, their salaries, contributions, and supplementary employee benefits.

4. Can I terminate an employee through EOR Malaysia?

Yes, you can terminate employment agreements via an employee of record Malaysia. They follow the proper termination procedures, taking care of the payment in lieu, minding notice periods, severance pays, and exit formalities, and keeping records of the termination process.

5. Does an employer of record Malaysia provide benefits to employees?

Yes, an employer of record administers and provides local and global benefits to employees. Benefits include mandatory and optional benefits, the latter making your business competitive and attracting top hires.

6. Can an employer of record Malaysia help with visa and work permit applications?

Yes, an employer of record can help with obtaining work visas and permits for your Malaysian employees. They’re well-versed in local regulations, which facilitates compliance for these employees’ stays.

Maximize Your Business Potential with Employer of Record Malaysia

An employer of record Malaysia can be a valuable asset for businesses looking to expand into the Indonesian market. By partnering with a reliable and reputable EOR, you can streamline your HR processes, mitigate risks, access global top talents, reduce costs, and enhance your company’s reputation in Indonesia. 

Omni makes it easy to support employees across multiple countries, time zones, and currencies.

Our centralized document management solution makes gathering the necessary data required to apply for employment visas and other country-specific initiatives seamlessly and timely. With customized workflows and automated reminders, HR can help empower employees to manage the deadlines and documentation requirements for applications. And centralized documents and real-time data makes it easy for employees to access salary information and produce reports and documents necessary for verification.

Omni offers a comprehensive payroll solution tailored to Malaysia specific requirements. With features like support for Malaysian ringgit and automated tax calculations, Omni can help HR teams simplify their payroll processing and ensure compliance with ease. Not only that, with secure document storage and straightforward data input, you can quickly access and submit essential information required for working in Malaysia.

Our dedicated local team of experts provides personalized support and ensures your business remains compliant with Malaysia’s labor laws. Book a demo with our team to learn more about how Omni can help maximize your business potential.

Indonesia, with its vast labor force and strategic location, is a prime market for international businesses, with more than 75% of Indonesians working for employers all over the world. As a member of the United Nations, G20, and the World Trade Organization, Indonesia offers a stable and attractive business environment. When expanding into Indonesia, businesses have two primary options: Establishing a local entity or utilizing an employer of record Indonesia.

Indonesia Employer of Record which is also known as an Indonesia Professional Employer Organization (PEO) and sometimes called international PEO takes on the regulatory and legal framework needed in order to hire in Indonesia. It enables you as an employer to hire and onboard your employees in Indonesia even without establishing a local entity in the country.

By partnering with an Indonesia EOR, you can tap into Indonesia’s rich talent pool while still ensuring compliance with local labor laws and regulations. It simplifies the process of individual employment, acting as an official employer overseeing duties such as onboarding, payroll, tax and benefits management.

Benefits of Using Employer of Record Indonesia

There are many benefits derived from using EOR services Indonesia, these include: 

Hire local talent

Employer of record Indonesia works as an admin to manage the workload of hiring and paying local talents and employees residing in Indonesia including contractors on time.

Read next: Hiring in Indonesia: How to Prepare a Foreign Worker Utilisation Plan

Compliance

An Indonesia EOR is expected to be well versed in Indonesia employment laws, employees rights, tax requirements and local benefits and this ensures your business stays in compliance with local laws.

Risk mitigation

Indonesia EOR handles HR complexities, reducing risks related to transaction, translations, and economic factors. This protects you from potential employment disputes and legal challenges.

Cost effective

Aside from taking a long time to set up and register a business in Indonesia, there are other costs you incur such as registration fee, office space and many more. Using Indonesia EOR helps you avoid or reduce these costs.

Relevant reading: The Cost of Recruitment: HR’s Guide to Creating, Tracking and Implementing a Salary Budget

Focus on core business

EOR Indonesia reduces your stress on hiring, allowing you to enter new markets and also to expand your business internationally with ease which helps you to focus on the core of your business.

How does Indonesia EOR work?

1. Hiring process

Indonesia employer of record assists your business in finding and hiring the right talent during the recruitment process. They are also knowledgeable on the local job market and regulations, ensuring that the entire process is compliant to local labor laws.

2. Employment contract

EOR services Indonesia takes care of all employment related matters which includes drafting of employment contracts. Therefore after hiring, the next step is to issue a locally compliant employment contract. It outlines the terms of employment, including job scope and responsibilities, salary, and benefits, according to Indonesian law. This makes sure all the terms are clear and legally binding, minimizing the chances of disputes.

3. Payroll and benefits

Both employers and employees in Indonesia are responsible for contributing to Indonesia’s social security, BPJS, which can be difficult for foreign companies to navigate. Indonesia EOR services can offer to run payroll processes by preparing salaries and allowances in accordance with Indonesia’s standards and can also help to ensure employees benefits such as health insurance, holiday allowance and social security benefits are calculated accurately. 

4. Compliance

Having an official Indonesia EOR service helps you stay compliant with all forms of Indonesia employment laws, allowing you to focus on direct day to day operations and employee relationships. For example, an employer of record Indonesia can ensure you follow the Manpower Law that regulates the practices of employment in Indonesia.

5. HR administration

Outsourcing SDM Indonesia provides a variety of HR administrative services for your company following the right policies without necessarily having an HR department in your startups. This can also help to save costs on having to hire full time staff.

Things to Consider When Choosing EOR Services Indonesia

For foreign companies looking to hire through an employer of record Indonesia, it’s crucial to consider some points when choosing a suitable EOR provider, such as:

Local expertise

Ensure the EOR service has deep knowledge of Indonesia employment laws, tax law, and cultural influences. Their local expertise will help you navigate any complex compliance process and will make sure your operations are up and running smoothly.

Compliance track record

When picking EOR services Indonesia, a reputable track record is something to watch out for. An EOR service with experience is likely to be more reliable and competent when handling delicate matters as compared to new EOR providers. Another good practice is checking online reviews for better decision-making.

Service offerings

Choose an employer of record Indonesia partner that offers a wide range and comprehensive services that aligns with your company’s needs. Avoid overlooking the long-term impact of your EOR provider’s service offerings on your company’s growth.

Technology platform

You should also consider choosing EOR services Indonesia with advanced technology capabilities. This can help streamline your HR processes and improve service delivery. EORs that are driven by technology also provide a competitive edge in today’s competitive market. 

References and testimonials

Before choosing EOR services Indonesia to partner with, it is imperative to verify if such services have a positive track record. Consider assessing their performance on third-party sites like G2 and Capterra. Prioritize an EOR service with a good track record and an excellent client testimonial. 

Challenges and Risks for Indonesia Employer of Record

By this point, an employer of record sounds like the perfect solution for international companies hoping to hire in Indonesia without a local entity. However, there are some challenges and risks associated with Indonesia Employer of Record that you need to consider:

Complex Indonesia employment law

Navigating Indonesia’s complex labor laws can be challenging for EOR service providers. Compliance requires obtaining necessary licenses and permits, drafting accurate employment contracts and agreements, and ensuring adherence to minimum wage and employee benefit regulations. Failure to comply with these laws can result in significant penalties, legal disputes, and damage to the company’s reputation.

Employer of record Indonesia selection

While partnering with an EOR service Indonesia is valuable, weighing the pros and cons of EOR services to be rendered to an individual company can be challenging. It is essential to consider the total cost and allocated budget, the company’s long term goals, current and future business objectives, and market strategy before selection.

Protecting employee data

An Employer of Record Indonesia often serves as a third party company with legal responsibilities such as data security. When selecting an EOR provider, it’s essential to prioritize providers with the proper certifications to safeguard employee data. This is crucial for maintaining compliance and protecting sensitive information. 

Frequently Asked Questions for Employer of Record Indonesia

1. What is an EOR?

An employer of record is a third-party organization that takes on the legal responsibility of employing staff on behalf of a company. In that regard, it would include payroll, taxes, benefits, and compliance with local labor laws. An EOR allows businesses to expand their workforce in areas where they do not have a legal presence, making international hiring easier by reducing much of the administration associated with this task.

2. How long does it take to hire an employee through an employer of record Indonesia?

In general, it may take a few weeks to onboard an employee through an employer of record Indonesia. The time for onboarding will depend on a variety of factors that can relate either to the role itself, the candidate’s availability, or the particular requirements of the local labor market. Because an EOR manages all the paperwork and compliance checks, this helps speed things up.

3. What are the costs associated with using an employer of record Indonesia?

The general costs associated with the employment of record services in Indonesia include a service fee that can be a certain percentage of employee salary or a flat monthly rate. Other fees include setup, payroll processing, and all specific charges related to the administration of benefits or compliance management. Make sure to negotiate these fees in advance with an EOR service provider and confirm your understanding.

4. Can I terminate an employee through Indonesia EOR?

Yes, you can terminate an employee through an Indonesia EOR. The EOR will execute termination in compliance with local labor laws in order to guarantee that all legal requirements are followed, including notice periods and severance payments. It is also crucial that you understand the legal implications and process involved in firing someone by close cooperation with the EOR.

5. Does an employer of record Indonesia provide benefits to employees?

An employer of record Indonesia will typically provide benefits to employees as part of their service. This can include health insurance, retirement contributions, and other statutory benefits under the local law. The EOR provides you with a benefits package that is compliant with Indonesian regulations and competitive for the local market.

6. Can an employer of record Indonesia help with visa and work permit applications?

Yes, an Employer of Record Indonesia will be able to help you with the application process for obtaining a visa and work permit. An EOR looks after all the legal and administrative proceedings that ensure your workers are legally admitted to work in Indonesia. This feature is especially useful if your company is considering hiring expatriates or people of other nationalities because it considerably simplifies the often-complicated immigration procedures.

Maximize Your Business Potential with Employer of Record Indonesia

An employer of record Indonesia can be a valuable asset for businesses looking to expand into the Indonesian market. By partnering with a reliable and reputable EOR, you can streamline your HR processes, mitigate risks, access global top talents, reduce costs, and enhance your company’s reputation in Indonesia. 

Omni makes it easy to support employees across multiple countries, time zones, and currencies.

Our centralized document management solution makes gathering the necessary data required to apply for employment visas and other country-specific initiatives seamlessly and timely. With customized workflows and automated reminders, HR can help empower employees to manage the deadlines and documentation requirements for applications. And centralized documents and real-time data makes it easy for employees to access salary information and produce reports and documents necessary for verification.

Omni offers a comprehensive payroll solution tailored to Indonesian specific requirements. With features like support for Indonesian rupiah and automated tax calculations, Omni can help HR teams simplify their payroll processing and ensure compliance with ease. Not only that, with secure document storage and straightforward data input, you can quickly access and submit essential information required for working in Indonesia.

Our dedicated local team of experts provides personalized support and ensures your business remains compliant with Indonesia’s labor laws. Book a demo with our team to learn more about how Omni can help maximize your business potential.

Hong Kong remains a top market for international businesses. With a booming economy, low tax rates, world-class infrastructure, and status as a leading international financial center, it’s no wonder that many international companies are expanding into Hong Kong through an employer of record Hong Kong.  

EORs provide a streamlined solution by managing essential HR functions, such as payroll, compliance, and employee benefits, without the need to establish a local entity. This allows businesses to quickly and efficiently tap into Hong Kong’s dynamic labor market while minimizing administrative burdens and ensuring compliance with local regulations.

In this guide, you’ll learn the benefits of an employer of record Hong Kong, what to consider when choosing an EOR and potential challenges that you might encounter. 

Relevant reading: What Is an Employer of Record (EOR)? Pros & Cons Explained

Benefits of Using Employer of Record Hong Kong

Hire local talent

In a traditional setup, the hiring process can be time-consuming, but with the assistance of an employer of record Hong Kong, companies can seamlessly hire and expand into the Hong Kong labor market. Additionally, working with a global diverse team allows companies to leverage their employees’ wide range of skills, expertise, and perspectives. This can contribute to the growth and innovation of the company. 

Compliance

The primary legislation governing employment in Hong Kong is the Employment Ordinance, along with other laws concerning minimum wage, mandatory provident fund (MPF) contributions, and employee rights. An EOR ensures that all employment contracts meet these legal requirements, ensuring compliance with Hong Kong’s labor laws. 

Read next: Global Hiring Guide: Hong Kong

Risk mitigation

Hong Kong’s employment laws are complex, and without third-party support, businesses may face challenges managing compliance. By outsourcing HR functions to an employer of record Hong Kong, companies can mitigate the risks associated with employment. Some of these risks include wrongful termination, reputational damage, litigation costs and legal penalties.

Cost effective

The administrative costs involved in setting up a local entity in Hong Kong can be expensive, time-consuming and burdensome for businesses. Employers would have to follow arduous steps such as navigating legal registration, establishing a physical office, and complying with strict regulatory requirements, all of which can incur significant costs and delays. Using an EOR can help to streamline this process by handling these administrative tasks on behalf of the business, allowing companies to operate in Hong Kong quickly and cost-effectively without the need for a local entity.

Focus on core business

EOR Hong Kong helps companies in managing key administrative tasks like payroll processing, tax compliance, and employee benefits administration. This allows employers to dedicate more time to their core business activities which, in turn, will fetch more profitable business opportunities their way. Companies can also take time to support their existing customers better which will result in enhanced customer experience and improved satisfaction.

How does EOR Hong Kong work? 

Whether you’re a small business, startup or large enterprise looking to partner with an employer of record Hong Kong to manage your legal and HR functions, it’s crucial to understand the various services an EOR Hong Kong can offer.

1. Hiring process

Before an EOR takes over the hiring process, the company has to identify its hiring needs such as exact roles to be filled, skills needed and the number of employees. The EOR then starts the recruitment process by sourcing for talents through various channels such as job boards, recruitment agencies and local networks. The EOR also conducts screening interviews and assessments to evaluate candidates. They ensure that the selection process aligns with the company’s requirements and local hiring practices.

2. Employment contract

Once candidates are selected, the EOR helps in drafting employment contracts with the employee, ensuring that it complies with Hong Kong employment laws. These contracts specify the job scope, working hours, salary, and termination conditions.

3. Payroll and benefits

The employer of record Hong Kong manages payroll processing, including salary disbursement, depositing and filing Hong Kong tax return for employees, and mandatory contributions such as social security. They also oversee benefits administration by looking for a wide range of benefit options for employees including retirement plans, health insurance and other perks, taking into consideration benefits that are compliant with Hong Kong’s employment ordinance.

Learn more: Your Guide to Managing Payroll Hong Kong

4. Compliance

Hong Kong EORs work with companies to ensure that all employment practices are in line with the country’s labor laws, including work hours, termination procedures, and statutory benefits.

5. HR administration

EORs effectively manage HR-related tasks such as employee data management, performance reviews, and disciplinary actions so the company can operate easily in new territories. However, while the EOR handles these administrative tasks, the client company retains control over the day-to-day management of the employees, such as assigning work and overseeing performance.

Things to Consider When Choosing EOR Hong Kong

When selecting an EOR Hong Kong provider, you should consider the following key factors to ensure they are the right providers for your company:

Local expertise

Hong Kong is protective of workers’ rights and implements strict laws and a comprehensive framework to uphold them. 

To make expanding your operations in the Hong Kong market seamless, you must choose an employer of record Hong Kong that possesses an in-depth understanding of the country’s labor laws and employment practices. Failing to do so may result in significant legal and financial consequences. 

For example, employers risk severe consequences for non-compliance, including fines of up to HKD 500,000 for safety violations and potential imprisonment for serious breaches. 

Additionally, misclassifying employees can result in significant financial penalties.

Compliance track record

Compliance track record is another important factor to consider when choosing an Hong Kong EOR. This means assessing to see if the EOR has a proven track record of adhering to local employment laws and regulations. 

This can be done in several ways. You can begin with researching the EOR provider’s history for any compliance violations or legal issues. You should also look for news articles, press releases, or regulatory actions that may indicate past non-compliance. 

Reputable EORs often obtain compliance certifications from industry organizations or regulatory bodies. Therefore, ask the EOR to provide copies of relevant certifications to demonstrate their commitment to compliance. 

Lastly, make inquiries about their compliance process. A strong EOR should have well-defined procedures for monitoring regulatory changes, conducting audits, and ensuring adherence to local laws and regulations.

Service offerings

Choosing an effective employer of record Hong Kong to partner with involves identifying the specific HR functions you need to outsource. This is because EORs offer a range of services and packages to meet different business needs. 

What HR-related tasks are essential to your business and can be handled externally? Whatever it is, ensure the EOR you select aligns with your business goals and can effectively manage these tasks to support your growth. 

Additionally, perform a cost analysis by comparing the costs of handling HR tasks in-house versus outsourcing them. This will also help you determine which functions can be more efficiently managed by an EOR Hong Kong. 

Technology platform

Assessing the EOR’s technology platform is essential because it directly impacts the efficiency, accuracy, and transparency of HR processes like payroll processing, employee management, and reporting. A robust platform can help to streamline these tasks, reduce errors, and provide real-time access to important data, ultimately improving the overall employee experience and operational efficiency. 

Ask the Hong Kong EOR provider directly to demonstrate their technology platform. This will allow you to assess how user-friendly and efficient the system is for managing payroll, employee data, and reporting. 

Seamless integration prevents data silos, reduces manual data entry, and ensures consistency across all business processes. It’s also important to ensure the platform can integrate with your existing systems or third-party tools, such as accounting software or HR management systems.

References and testimonials

Look for reviews on third-party websites, industry forums, or social media platforms where current or past clients may have shared their experiences with the EOR. 

You can also engage with industry-specific groups or forums where professionals discuss their experiences with different EORs. Ask for recommendations or feedback from others who have used the service. 

By seeking out clients testimonials and reviews, you can effectively gauge the reliability and performance of the EOR Hong Kong.

Challenges and Risks for Hong Kong Employer of Record

When choosing an employer of record Hong Kong, businesses may face several challenges and risks along the way,  including:

Complex Hong Kong employment law

Hong Kong’s employment laws can be intricate, and any missteps in areas such as contracts, terminations, or employee benefits can result in penalties. It’s essential to ensure that the EOR is well-versed in these regulations to avoid non-compliance.

Employer of record Hong Kong selection

Choosing the right EOR is critical. A poorly selected EOR can lead to compliance issues, employee dissatisfaction, and legal liabilities. However, we’ve outlined in the above section steps to follow in ensuring you choose the most efficient EOR provider.

Protecting employee data

Hong Kong has stringent data protection laws. It is crucial that the EOR has robust data protection measures in place to safeguard employee information.

Frequently Asked Questions for Employer of Record Hong Kong

1. What is an EOR?

For companies looking to expand their operations globally, an EOR allows them to quickly enter new markets without needing to establish a legal entity in each country. The EOR hires employees on behalf of the company, allowing the company to manage its workforce and operations while the EOR takes care of the legal and administrative aspects of employment.

2. How long does it take to hire an employee through an employer of record Hong Kong?

The hiring process through an employer of record Hong Kong varies. It can be completed within a few days to a couple of weeks, depending on the complexity of the role and the local market conditions.

3. What are the costs associated with using an employer of record Hong Kong?

Costs can vary based on the services required and the number of employees. Typically, there are setup fees and ongoing monthly fees per employee, which cover payroll, benefits administration, and compliance management.

4. Can I terminate an employee through EOR Hong Kong?

Termination of employment contract is possible through an employer of record Hong Kong. However, the process must comply with Hong Kong’s labor laws, which the EOR will manage on your behalf.

5. Does an employer of record Hong Kong provide benefits to employees?

One of the many services an employer of record Hong Kong provides includes managing statutory benefits as well as any additional benefits the client company wishes to offer.

6. Can an employer of record Hong Kong help with visa and work permit applications?

Yes, many EOR Hong Kong providers offer assistance with visa and work permit applications as part of their service offerings.

Maximize Your Business Potential with Employer of Record Hong Kong

Omni makes it easy to support employees across multiple countries, time zones, and currencies.

Our centralized document management solution makes gathering the necessary data required to apply for employment passes and other country-specific initiatives seamless and timely. With customized workflows and automated reminders, HR can help empower employees to manage the deadlines and documentation requirements for applications. And centralized documents and real-time data makes it easy for employees to access salary information and produce reports and documents necessary for verification.

Omni’s comprehensive payroll solution is tailored to Hong Kong’s specific requirements. With features like support for HKD, automated tax calculations, and managed MPF contributions, Omni can help HR teams simplify their payroll processing and tax calculations and ensure compliance with ease, reducing the risk of penalties. Not only that, with secure document storage and straightforward data input, you can quickly access and submit essential information required for working in Hong Kong.

Our dedicated local team of experts provides personalized support and ensures your business remains compliant with Hong Kong’s labor laws. Book your product tour with our team to learn more about how Omni can help maximize your business potential.

With a population of under six million and a labor force participation rate of 68.6%, Singapore is fertile ground for expanding your business or hiring remote employees. But employing labor in Singapore can be tricky, especially if it’s your first time hiring there or your organization doesn’t have the resources or expertise to handle the complexities of global expansion. Working with an Employer of Record Singapore is the safer option for many companies.

Atlas reports that 30% of APAC countries use EOR services to tackle hiring problems, retain talent, and solve other international expansion challenges. Below, we explore the perks of using an employer of record Singapore, how it works, and crucial things to consider before investing in it.

Benefits of Using Employer of Record Singapore

As a third-party organization, a Singapore employer of record takes responsibility for hiring and paying staff on behalf of another company without flouting employment regulations. Singapore EOR services save you the stress of setting up a legal entity or immersing yourself in Singapore’s labor laws to avoid compliance issues. Such companies optimize HR teams in the following ways:

Hire local talent

Hiring local talent without a Singapore EOR service is complex. First, you’d have to establish a legal entity in Singapore, which takes several months or even years and costs a lot. You’ll also have to open local bank accounts, organize payroll and benefits, and create a legal team. Furthermore, you’ll need to get familiar with the country’s labor laws regarding compensation expectations, annual leave, overtime, salary, etc. 

Let’s face it—it’s an overwhelming process that can lead to burnout if care isn’t taken, especially if you plan to do this in all the countries you want to hire from. But with an EOR Singapore, everything gets easier. 

A Singapore worker record helps you source, hire, and support employees in a foreign country without having to set up a legal entity. They also draft employment agreements and manage your employees’ payroll, fringe benefits, claims, and expenses while you retain control and autonomy over your workforce in your base country.

Compliance

Navigating Singapore’s Employment Act, payroll systems and tax rules can be complex and lead to costly mistakes if not handled properly. What better way to solve this than collaborating with a company well-versed in Singapore labor regulations? 

EOR services Singapore have adequate knowledge of the local employment laws businesses should obey for HR compliance. These include regulations regarding taxation, global payroll, benefits, intellectual property, and many others. By partnering with a Singapore EOR, your company will legally and efficiently engage with Singapore employees without violating labor laws.

Read next: Comprehensive Guide to Global HR Compliance

Risk mitigation

International hiring poses legal and compliance risk factors. Hence, it should be treated intricately without misunderstanding or ignorance to avoid severe penalties. For instance, misclassifying a full-time remote worker as an independent contractor is a breach of Singaporean employment laws and attracts penalties or fines.

EOR services Singapore mitigate these risks by assuming responsibility for legal compliance in the country. With them, you’re sure of accurate worker classification and the proper documentation of employment agreements. Besides the risk of misclassification, they also tackle employee disputes, terminations, precise payroll processing and compliance with local regulations.

Ultimately, this reduces your company’s legal and financial risks, giving you peace of mind and a fair and compliant workforce.

Cost effective

Using an EOR is cost-effective because it provides value for money. They offer international expansion without the need to establish a branch office or subsidiary company in Singapore. They also remove the burden of recurring administrative expenses, reducing your payroll processing and accounting costs.

Moreover, since the employer of record services Singapore will ensure your company complies with labor laws, you don’t need to worry about the risks of fines or other penalties that will demand money from your business. Indeed, they not only offer convenience but also provide a return on investment.

Focus on core business

Companies can regain significant operational time by outsourcing routine employment tasks and liabilities to Singapore EOR companies. Your EOR will handle all HR related tasks from onboarding new hires to offboarding existing staff.  They’ll also protect your business from potential legal issues, letting you manage your time more efficiently and effectively.

This gives you enough time to focus on other crucial matters and develop your business while your company retains control over its daily operations.

How does Singapore EOR work?

An EOR in Singapore acts as the legal employer for your workforce. Here’s how it works:

1. Hiring process

Singapore’s employment law is based on several regulations, including:

• The Employment Act
• The Child Development Co-Savings Act
• The Employment of Foreign Manpower Act
• Work Injury Compensation Act, and
• The Workplace Safety and Health Act

Besides ensuring full compliance with these regulations, EOR Singapore helps you find the right candidates. Simply list your desired skills and qualifications in a candidate and your EOR services Singapore will assist in recruiting suitable talent. 

Ultimately, they help you save the time, money, and effort you’d have spent on screening several applications to find the perfect match. And once they find a new hire, the employer of record Singapore also manages the onboarding process and prepares the necessary documentation.

2. Employment contract

After recruitment and hiring, the employer of record Singapore drafts an employment contract that complies with Singaporean legal standards.

An employment contract in Singapore spells out the rights and obligations of the employer and employee. The key terms included in the contract are:

• Job title and description
• Employment commencement date
• Employment duration for temporary contracts
• Working hours, work days per week, and rest days
• Workplace details (optional)
• Salary, overtime pay, bonuses, and other forms of compensation.
• Probationary period
• Allowances and deductions
• Types of leave
• Additional medical benefits
• Identities of both parties (employer and employee) involved
• Notice periods for termination of employment

Additional resource: How to Define Your Employee’s Job Scope (With a Template!)

3. Payroll and benefits

Once the Singapore EOR legally employs the candidate on your behalf, they register the new employee for payroll and prepare payslips every month while making the necessary deductions.

Singapore’s Employment Act specifies that an employee’s salary must be paid at least once a month within seven days after the end of a salary period. It also stipulates that additional payments for overtime work must be paid not later than 14 days after the last day of the salary period during which the employee performed the overtime work.

4. Compliance

An employer of record Singapore helps you manage your overseas payroll to ensure compliance and achieve consistent and accurate pay and tax withholdings for your Singapore-based employees. They’re your company’s global HR team that understands the complex labor laws and payroll regulations of the Singaporean landscape. 

For example, a Singapore worker record understands that all Singapore-sourced income is taxable regardless of resident status. Hence, they make the necessary deductions on your behalf to align with taxation in Singapore, as shown below:

Salary Range	Income Tax Bracket
Up to S$20,000	0%
S$ 20,000 – 30,000	2%
S$ 30,000 – 40,000	3.5%
S$ 40,000 – 80,000	7%
S$ 80,000 – 120,000	11.5%
S$ 120,000 – 160,000	15%
S$ 160,000 – 200,000	18%
S$ 200,000 – 240,000	19%
S$ 240,000 – 280,000	19.5%
S$ 280,000 – 320,000	20%
Above S$ 320,000 – 500,000	22%
S$ 500,000 – 1,000,000	23%
Above S$ 1,000,000	24%

5. HR administration

The employer of record Singapore handles HR tasks such as payroll, taxes, benefits, performance reviews, employee relations, and disciplinary actions. The Singapore EOR is the main point of contact between your international employees and your company for HR related matters. They ensure HR practices align with local laws and company policies.

Things to Consider When Choosing EOR Services Singapore

Before working with any EOR services in Singapore, consider the following:

Local expertise

Ensure the Singapore EOR services company thoroughly understands the country’s tax regulations and compliance requirements. They must have local expertise regarding the Employment Act, CPF contributions, work permits, and other legal employment matters to avoid penalties, fines, or other legal issues.

Furthermore, they must have legal entities, networks, and resources to handle Singapore’s operational requirements like payroll processing and benefits administration.

Compliance track record

Check for reviews on third-party sites like G2 or Trustpilot to be sure the Singapore EOR has actually achieved compliance for past clients. A good employer of record in Singapore should have a strong track record that proves their expertise in achieving compliance for businesses similar to yours.

Service offerings

Weigh the various services the EOR Singapore offers to ensure they can handle all aspects of employment and support your employees well enough.

An ideal employer of record Singapore should offer a comprehensive package that comprises relevant HR support and employee relations throughout the employee lifecycle. They include:

• Recruitment and hiring support
• Employment contracts
• Visa and work permit applications
• Employee benefits administration
• Payroll management
• HR advisory services
• Employee termination

A Singapore worker record with extensive service offerings can save you time and money, freeing your company from administrative burdens.

Technology platform

Assess the technology platforms the Singapore EOR uses for human capital management, payroll processing, and communication. This is necessary as a centralized, secure, and user-friendly platform will double efficiency, ensure data accuracy, and achieve clear communication between your company, the EOR, and your employees.

References and testimonials

Check for client testimonials and case studies that demonstrate the Singapore EOR’s reputation, work ethic, and successes. If their clients’ feedback is positive, the Singapore EOR is more likely to deliver reliable and compliant services. 

Challenges and Risks for Singapore Employer of Record

Complex Singapore employment law

While EOR services Singapore specialize in navigating complex regulations, there’s still a risk of compliance. For one, Singapore’s legal environment may change over time, and if your EOR Singapore fails to adapt promptly, your business may incur fines, increased costs, operational delays, or other legal consequences.

Employer of record Singapore selection

With the many EOR Singapore options available, it may not be easy to select the right choice. A pro tip is to do your due diligence and research the reputation of various EOR companies before deciding. This is necessary as some EORs may claim to have local expertise, but their understanding of specific industry practices or niche legal requirements in Singapore may be limited.

Also, ensure the EOR has its entity in Singapore and doesn’t rely on external providers to provide some of their services. If they depend on external providers, their charges will be more expensive.

Protecting employee data

Singapore’s 2021 Pandora papers leak reveals that any organization can be hacked or suffer data leaks if it lacks the right data protection systems. 

Since a third party will be handling your employment affairs in Singapore, there is a risk of employee data breaches. Hence, an employer of record services in Singapore should adopt strict data protection standards to safeguard your data from the wrong hands. 

Ensure your EOR company works in line with the Personal Data Protection Act (PDPA) Singapore. The PDPA comprises the demands governing the collection, use, disclosure and protection of personal data in Singapore. It also recognizes organizations’ need to collect and use employee data for legitimate purposes while protecting such data.

Frequently Asked Questions for Employer of Record Singapore

1. What is an EOR?

An EOR is a third-party agency that legally hires, recruits, pays, and manages overseas employees and HR processes on behalf of your company. 

2. How long does it take to hire an employee through an employer of record Singapore?

Hiring an employee through an Employer of Record Singapore typically takes one to three weeks if you’ve already found a candidate. It takes three to six weeks if an EOR Singapore helps with recruitment. The duration depends on factors such as the EOR’s efficiency and the complexity of the role.

3. What are the costs associated with using an employer of record Singapore?

The costs associated with using an Employer of Record (EOR) in Singapore vary depending on the Singapore EOR provider, workforce size and location, industry complexity, compliance management, and additional services. 

But generally, EOR costs range from S$599 to over S$2,000 per employee per month. Some EOR services Singapore charge per employee. Some take a percentage of your employees’ salary while others offer a custom or fixed pricing, 

4. Can I terminate an employee through Singapore EOR?

Yes, you can terminate an employee through an EOR. But the process has to be fair and compliant with the Singaporean Employment Act. 

5. Does an employer of record Singapore provide benefits to employees?

Yes, an employer of record Singapore provides benefits to employees. They include health insurance, paid leave, statutory benefits like Central Provident Fund (CPF) contributions, and other benefits the law requires. The Singapore EOR services may also offer additional benefits depending on your company’s preferences and industry standards.

6. Can an employer of record Singapore help with visa and work permit applications?

Yes, an EOR Singapore can help with visa and work permit applications, especially if your company intends to hire workers who need the appropriate authorization to work legally in Singapore.

Maximize Your Business Potential with Employer of Record Singapore

Omni makes it easy to support employees across multiple countries, time zones, and currencies.

Our centralized document management solution makes gathering the necessary data required to apply for employment passes and other country-specific initiatives seamless and timely. With customized workflows and automated reminders, HR can help empower employees to manage the deadlines and documentation requirements for applications. And centralized documents and real-time data makes it easy for employees to access salary information and produce reports and documents necessary for verification.

Omni offers a comprehensive payroll solution tailored to Singapore’s specific requirements. With features like support for SGD, automated tax calculations, and managed CPF contributions, Omni can help HR teams simplify their payroll processing and ensure compliance.

Additionally, Omni’s customizable dashboard allows your teams to set and manage calendars pre-loaded with country or region specific holidays and timezones, seamlessly onboarding individuals in various locations.

Our dedicated local team of experts provides personalized support and ensures your business remains compliant with Singapore’s labor laws. Book your product tour with our team to learn more about how Omni can help maximize your business potential.