Introduction
Expanding into Asia can be one of the quickest ways for a company to grow. Here you can get access to huge talent pools and new opportunities. But if you have ever tried hiring in places like Singapore, India, or Malaysia, you will know it’s not as easy as it sounds.
Each country has its own employment laws and compliance requirements. Setting up a local entity here can take 3 to 6 months and also cost tens of thousands in legal and admin fees.
If you are a business trying to scale, these kinds of delays will not only slow you down but can also lead to missed opportunities and roles left vacant for months.
In such situations, the Employer of Record (EOR) comes in for help. With the help of EOR, you can hire on board and pay employees quickly without having to struggle through the red tape. In this article, let’s understand what an Employer of Record is and how it works.
What is an Employer of Record (EOR)?
An employer of record is a third-party partner that officially employs people on your behalf in another country. You are still the one managing their day-to-day work, but the ER takes care of things like contracts, payroll, benefits, and compliance.
Let me give you an example. Let’s suppose there is a SaaS company in the UK that wants to hire developers in Singapore. Normally, they would have to wait for months to set up a subsidiary before they could even bring someone on board.
But with an EOR, it’s different. The EOR drafts locally compliant contracts, handles CPF contributions, files payslips with the authorities, and makes sure everything is legal from day one.
This way, the company gets the talent it needs quickly, without dealing with red tape, and is also fully compliant.
Also Read: Direct Hiring: A Cost-Effective Approach to Recruitment
Why Companies Choose EOR: Core Benefits
| Benefit | Traditional Entity Setup | With EOR |
| Time-to-hire | 3–6 months | 2–4 weeks |
| Compliance risk | High, requires in-house experts | Low, handled by local specialists |
| Cost | High (legal, office, HR staff) | Transparent monthly per-employee fee |
| Payroll & Benefits | Multiple vendors needed | Single integrated partner |
| Talent Retention | Limited local knowledge | Market-aligned salaries & benefits |
Speed of Hiring and Market Entry
Time really is money. If you use an EOR to expand into another country, you can have your team up and running within a month. Normally, setting up a local entity can take up to 4 to 6 months. This way, you can save time and hire easily.
Compliance Clarity
Employment rules in Asia are not the same everywhere. For example, in Japan, if you misclassify contractors, the penalties can be huge. The same thing happened with Uber in the US. It had to pay $8.4 million in fines for workers’ misclassification.
With an EOR, you don’t have to face such a risk because they make sure contracts, classifications, and filings are all done by the book.
Cost Efficiency
If you are thinking of opening an entity in Singapore, it can go up to $15,000-$20,000 in setup and legal fees, and also additional ongoing compliance costs.
An EOR, on the other hand, usually charges of flat per-employee fee. It is simpler and much lighter on the budget, especially for companies just starting out in a new market.
Integrated HR and Payroll
You get integrated HR and payroll with an EOR service. Now you don’t have to separately manage one vendor for payroll, another for tax, and another for business. You get a partner who handles everything.
Salaries go out in local currency, and taxes are withheld properly without you having to handle multiple systems.
Talent Retention
NEOR also helps you to stay competitive. They know local salary benchmarks and often have the leverage to negotiate better insurance or perks.
This way, when you’re hiring in a new market, your offer still stands out, and talent is more likely to stay.
How EOR Simplifies Expansion
An EOR works as your plug-and-play HR department when you enter a new country. Here is what that looks like:
- Contracts: There are contracts that are drafted to match local labour laws. Because of these, you don’t have to worry about hidden compliance gaps.
- Payroll: salaries are paid out in the local currencies, with taxes properly withheld and filed on your behalf.
- Benefits: There are many benefits that come along with an EO service. Employees get enrolled in both mandatory and additional benefit programmes, keeping your package competitive.
- Visa and Work Permits: If you’re moving staff across borders, the ER handles the visa process for you.
- Compliance: You don’t have to look for every policy change; your EOR keeps things updated and aligned with the local law.
For example, in Singapore, they calculate and file CPF contributions directly with IRAS. In India, they make sure Provident Fund and Gratuity are fully compliant, and in Malaysia, they take care of EPF and SOCSO contributions.
Also Read: Staff Leasing Services: How They Boost Business Efficiency
Choosing the Right EOR Partner
Choosing the right EOR partner is really important. Here are a few things you should look for:
- Local expertise: They should be fully aware of local and country-specific employment laws.
- Data security: They should have security as their top priority and should have ISO 27001 or equivalent certifications.
- Transparent pricing: Another important thing to look for is that they should have clear fee structures with no hidden costs.
- Integrated platform: The platform should be integrated, and HR, payroll, and compliance should all work together in one system.
- Client support: They should have active client support for the times you want quick, reliable answers whenever compliance questions come up.
Tip: Before you commit, always ask to see sample contracts and case studies. It gives you a better sense of how they handle real situations.
Conclusion
In the end, I will say that expanding into Asia does not have to be complicated or costly. An employer of record lets you hire talent quickly while staying compliant with local laws and managing costs, while offering competitive benefits.
By choosing the right partner and working closely with them, you can get new opportunities and grow your business without the usual problems.
