Why Global Expansion Needs a Plan
Growth rarely stops at one border. Yet every new market brings its own employment rules, payroll obligations and statutory benefits. A dismissal that takes 30 days in one country can require a works council consultation in another. A pension contribution capped at a few hundred dollars in one market can be uncapped in the next.
Getting these details wrong is costly. Penalties, back pay and employee disputes can erase the value of a new hire.
This guide sets out a practical expansion roadmap, compares labour law in 15 key markets across five regions, and highlights the government incentives that can make entry easier.
What Is an Employer of Record?
An Employer of Record (EOR) is a service that lets a company hire employees in a new country without setting up a local legal entity. The EOR becomes the legal employer on paper. It issues the employment contract, runs payroll, withholds tax and pays statutory contributions. The client company keeps full control over the employee’s day-to-day work and performance.
For many businesses, an EOR is the fastest and lowest-risk route into a new market. It removes the cost, commitment and timeline of incorporating a company, opening a bank account and registering with local authorities.
| Setting Up a Local Entity | Using an EOR | |
| Time to first bire | Several weeks to months, depending on incorporation and registrations | Once the contract is signed and employee details are received |
| Upfront cost | Incorporation, capital, office and local advisers | Predictable monthly service fee |
| Compliance | Carried by your own HR, legal and finance teams | Handled by in-country specialists |
| Exit | Liquidation and deregistration | End the service agreement in line with local termination rules |
Common reasons companies use an EOR:
- Speed to market: Onboard your talent locally in 48 hours
- Flexibility and cost: Enter or exit a market quickly & with care
- Wider talent pool: Access a diverse skillset across APAC & Middle East
- Compliant: Leave the local complexities to the local experts
- Cost Effectiveness: Avoid the cost of setting up & maintaining a legal entity
The Five-Step Expansion Roadmap
| Step | What to Do | Key Question |
| 1. Assess the market | Review labour law complexity, employer cost and government support in each target market. | How hard is it to hire, pay and exit here? |
| 2. Choose your entry model | Decide between an EOR, a local entity or a mix. Many firms start with an EOR and incorporate later. | Do we need an entity now, or can we test first? |
| 3. Secure local expertise | Work with in-country specialists who know local contracts, payroll and statutory filings. | Who will answer compliance questions on the ground? |
| 4. Set up payroll and benefits | Configure pension, social security, leave and local benefit mandates correctly from day one. | Are all statutory contributions and insurances in place? |
| 5. Monitor ongoing changes | Track minimum wage reviews, pension reforms and new employment laws in every market. | Who alerts us when the rules change? |
Regional Deep Dives
Each region below compares key markets on the five areas that matter most when hiring. Figures are current as of November 2026. Always verify the latest rates before making employment decisions.
Asia
Asia offers the widest range of employment regimes. Singapore and Hong Kong have lean, employer-friendly frameworks. Mainland China, Japan and South Korea have strong employee protections, high social insurance costs and strict rules on termination.
Greater China & Singapore
| Singapore | Hong Kong | Mainland China (Shanghai) | |
| Termination notice | As per contract. If silent, 1 day to 4 weeks based on length of service (s.10). | As per contract (minimum 7 days); one month if not specified. Different notice requirements apply during probation (Employment Ordinance, s.6). | 30 days’ written notice or one month’s pay in lieu, and only on statutory grounds (Art. 40). |
| Severance or end of service | No statutory severance. Retrenchment benefits are guided by tripartite advisories and contract terms. | Severance pay after 24 months of continuous service (redundancy or lay-off); long service payment after 5 years (qualifying non-redundancy termination or other specified circumstances). MPF offsetting abolished from 1 May 2025, subject to transitional arrangements. | One month’s wage per year of service, with caps for high earners (Art. 47). |
| Pension and social security | CPF for citizens and PRs. Employer 17% (age 55 and below) on wages capped at S$8,000 a month. | MPF: Employer and employee contributions of 5% each, capped at HK$1,500 per month. A proposed increase to HK$2,000 was discussed in 2026 but has not yet been implemented. | Five social insurances plus Housing Provident Fund. Rates and contribution bases set by each city. |
| Annual leave | 7 days, rising by 1 day a year to 14 days (s.88). | 7 days, rising to 14 days with service. 15 statutory holidays in 2026, rising to 17 by 2030. | 5, 10 or 15 days based on cumulative working years. |
| Minimum wage | No general minimum wage. Progressive Wage Model covers specific sectors. | HK$43.1 per hour from 1 May 2026. | Set by province. Shanghai RMB 2,740 a month (the highest nationally). |
| Local benefit mandates | Work injury compensation insurance. Government-paid leave of 16 weeks maternity, 4 weeks paternity and 10 weeks shared parental leave (births from 1 April 2026). | Mandatory employees’ compensation insurance, 14 weeks’ maternity leave and 5 days’ paternity leave. The new ‘468’ continuous contract rule, effective 18 January 2026, extends statutory employment benefits to more part-time employees. | Written contract within one month or double wages (Art. 82). Agreements to waive social insurance are invalid from 1 September 2025. |
| Key legislation | Employment Act 1968; CPF Act 1953 | Employment Ordinance (Cap. 57); MPF Schemes Ordinance (Cap. 485) | Labour Contract Law 2008 (amended 2012); Social Insurance Law 2011 |
Northeast Asia
| Japan (Tokyo) | South Korea (Seoul) | |
| Termination notice | 30 days or pay in lieu (LSA Art. 20). Dismissal must be objectively reasonable (LCA Art. 16). | 30 days or 30 days’ pay (Art. 26). Justifiable cause and written notice required (Arts. 23, 27). |
| Severance or end of service | No statutory severance. Retirement allowances are common under company rules. | Mandatory retirement pay of 30 days’ average wage per year after one year of service. |
| Pension and social security | Employees’ Pension 18.3% split equally, plus health, employment and accident insurance. New child support levy of about 0.23% (shared) from April 2026. | National Pension 9.5% split equally (4.75% employer) in 2026, rising 0.5 points a year to 13% by 2033. |
| Annual leave | 10 days after 6 months, rising to 20 days. Employers must ensure 5 days are taken (Art. 39). | 15 days after one year, plus 1 day every 2 years up to 25 days (Art. 60). |
| Minimum wage | Set by prefecture. Tokyo ¥1,226 per hour. FY2026 guideline raises the national average to ¥1,176 from around October 2026. | KRW 10,320 per hour in 2026. KRW 10,700 from 1 January 2027. |
| Local benefit mandates | Rules of employment must be filed for 10 or more employees. Overtime requires an Article 36 agreement. | Four major insurances. 52-hour weekly working cap. Paid weekly holiday allowance. |
| Key legislation | Labor Standards Act 1947; Labor Contract Act 2007 | Labor Standards Act; Employee Retirement Benefit Security Act; National Pension Act |
Watch out in Asia: China and South Korea make termination difficult without clear, documented cause. Japan and Korea have rising social insurance costs that should be built into multi-year budgets. In Hong Kong, the abolition of MPF offsetting means severance and long service payments are now a full additional cost.
Middle East
Gulf markets are modernising fast. Both the UAE and Saudi Arabia have revamped their labour laws in recent years, and both enforce salary payment through digital wage protection systems. Nationalisation quotas are a key planning factor.
| UAE (Dubai) | Saudi Arabia (Riyadh) | |
| Termination notice | 30 to 90 days as agreed in the contract (Art. 43). | Indefinite contracts: 60 days if the employer terminates, 30 days if the employee resigns (Art. 75, amended 2025). |
| Severance or end of service | End of service gratuity of 21 days’ basic wage per year for the first 5 years, then 30 days per year. Capped at 2 years’ wages (Art. 51). | End of service award of half a month’s wage per year for the first 5 years, then one month per year (Art. 84). |
| Pension and social security | State pension (GPSSA) for UAE and GCC nationals only. Expatriates receive end of service gratuity. | GOSI annuities for Saudi nationals. For expatriates, employer pays 2% for occupational hazards only. |
| Annual leave | 30 days a year (Art. 29). | 21 days, rising to 30 days after 5 years (Art. 109). |
| Minimum wage | AED 6,000 for Emirati nationals working in the private sector, effective January 1, 2026. No general statutory minimum wage for non-nationals. | No general minimum wage. SAR 4,000 is the floor for a Saudi employee to count fully towards Saudisation. |
| Local benefit mandates | Salaries paid through WPS. Health insurance mandatory in all emirates since January 2025. Unemployment insurance (ILOE). Firms with 50+ staff must grow Emirati share of skilled roles by 2% a year (10% target by end 2026). | Salaries paid through Mudad. Saudisation (Nitaqat) quotas. Mandatory health insurance. 12 weeks maternity leave. |
| Key legislation | Federal Decree-Law No. 33 of 2021 | Labor Law (Royal Decree M/51, 2005), amended February 2025 |
Spotlight: UAE Wage Protection System (WPS) The WPS, run by the Ministry of Human Resources and Emiratisation, requires private sector employers to pay salaries electronically through approved banks and exchange houses. Late or missing payments are flagged automatically. Consequences can include fines, a block on new work permits and a lower company classification. Saudi Arabia runs a similar system through the Mudad platform. For any business entering the Gulf, a compliant payroll process is a legal requirement from the very first salary run.
READ: APAC Labour Law Updates
Americas
The Americas split sharply. The US and Canada offer flexible, common-law frameworks, although state and provincial rules add complexity. Brazil has one of the most protective and costly employment regimes in the world.
| United States | Brazil (São Paulo) | Canada (Ontario) | |
| Termination notice | At-will employment in most states. WARN Act requires 60 days’ notice for mass layoffs. | 30 days plus 3 days per year of service, up to 90 days (Law 12,506/2011). | 1 to 8 weeks based on service (ESA s.57). Courts often award longer common law notice. |
| Severance or end of service | No statutory severance. | 40% penalty on the employee’s FGTS balance for dismissal without cause. FGTS is funded by an 8% monthly deposit. | One week per year, up to 26 weeks, for staff with 5+ years where payroll is CA$2.5 million or more. |
| Pension and social security | Social Security 6.2% and Medicare 1.45% (employer share), plus federal and state unemployment tax. Some states mandate a retirement plan if none is offered. | Standard employer INSS of 20% of payroll plus workplace accident and third-party levies, subject to the employer’s activity and tax regime. Actual charges vary by activity, workplace-risk classification and applicable tax or payroll regime. | CPP employer contribution of 5.95%, plus an additional 4% CPP2 contribution on earnings above the first ceiling (CA$74,600) and up to the second ceiling (CA$85,000). Employment Insurance premiums also apply. |
| Annual leave | No federal paid leave requirement. Many states and cities require paid sick leave. | 30 calendar days plus a one-third vacation bonus. | 2 weeks, rising to 3 weeks after 5 years. |
| Minimum wage | Federal US$7.25 per hour. States set higher rates, such as California US$16.90 and New York City US$17.00. | R$1,621 a month nationally in 2026. São Paulo state floor R$1,804. Revised effective Jun 1, 2026, through PL 386/2026 | CA$17.60 per hour, rising to CA$17.95 on 1 October 2026. |
| Local benefit mandates | ACA coverage for employers with 50+ full-time staff. FMLA unpaid leave. State workers’ compensation. | 13th-month salary. Transport voucher. Monthly eSocial reporting. | Workers’ compensation (WSIB). Employer Health Tax on larger payrolls. |
| Key legislation | Fair Labor Standards Act 1938; WARN Act 1988; state laws | Consolidation of Labour Laws (CLT, Decree-Law 5,452/1943) | Employment Standards Act 2000 (Ontario) |
Watch out in the Americas: In the US, the real complexity sits at state and city level, where pay, leave and pay transparency rules differ widely. In Brazil, dismissal costs, the 13th salary and vacation bonus can add substantially to base salary, so budget for total cost of employment rather than salary alone. Brazil’s Congress is also close to cutting the maximum working week from 44 to 40 hours with two rest days. The amendment has passed the Chamber and the Senate committee, with a final Senate vote expected after the October 2026 elections.
Europe
European labour law is built on strong employee protections and generous statutory benefits. EU directives set common minimums, but national rules still vary. The UK is in the middle of its biggest employment law overhaul in a generation.
| United Kingdom | Germany (Berlin) | Ireland (Dublin) | |
| Termination notice | One week per year of service, up to 12 weeks (ERA 1996 s.86). | 4 weeks, rising to 7 months with service (BGB §622). Two weeks may apply during an agreed probationary period of up to six months. | 1 to 8 weeks based on service (Minimum Notice and Terms of Employment Act 1973). |
| Severance or end of service | Statutory redundancy pay after 2 years. Weekly pay capped at £751, maximum £22,530 (from April 2026). | Severance pay is not generally mandatory. However, under the KSchG, dismissal must be socially justified for employees with more than six months’ service in companies with more than 10 employees. Settlements are common. | Statutory redundancy after 2 years. 2 weeks’ pay per year plus 1 week, with weekly pay capped at €600. |
| Pension and social security | Pension auto-enrolment, employer minimum 3% of qualifying earnings. Employer National Insurance 15%. | Statutory pension 18.6% split equally, plus health, long-term care, unemployment and accident insurance. Subject to annual ceilings. | Auto-enrolment (MyFutureFund) since 1 January 2026. Employer contribution of 1.5%, rising to 6% by year 10. Employer PRSI rates of 9% on weekly earnings up to €552 and 11.25% above €552, increasing to 9.15% and 11.40% respectively from 1 October 2026. |
| Annual leave | 5.6 weeks (28 days) including bank holidays. | 20 days on a 5-day week (Federal Leave Act). | 4 working weeks plus public holidays (Organisation of Working Time Act 1997). |
| Minimum wage | National Living Wage £12.71 per hour (age 21+) from April 2026. | €13.90 per hour from 1 January 2026, rising to €14.60 in 2027. | €14.15 per hour from 1 January 2026. |
| Local benefit mandates | Statutory sick pay from day one since April 2026. From 1 January 2027, the qualifying period for unfair dismissal protection will fall from 2 years to 6 months, meaning employees with at least six months’ service by that date will qualify. The compensation cap will also be removed. | Employees may elect a works council in sites with 5+ staff, with co-determination rights. | Statutory sick pay of 5 days a year. Core terms in writing within 5 days of starting. |
| Key legislation | Employment Rights Act 1996; Employment Rights Act 2025; Pensions Act 2008 | Civil Code (BGB); Dismissal Protection Act (KSchG); Works Constitution Act (BetrVG) | Organisation of Working Time Act 1997; Automatic Enrolment Retirement Savings System Act 2024 |
Watch out in Europe: Employers in England, Wales and Scotland should note that staff employed from July 2026 will gain unfair dismissal protection when the new rules start in January 2027. In Germany, works councils can shape restructuring and working time decisions, so plan consultation time into any change.
Africa
Africa is one of the fastest-growing expansion frontiers, but frameworks differ in maturity. South Africa has well-developed, actively enforced labour law. Nigeria’s framework is older and relies heavily on contract terms, especially for managerial staff.
| South Africa (Johannesburg) | Nigeria (Lagos) | |
| Termination notice | 1 week (under 6 months), 2 weeks (6 to 12 months), 4 weeks (1 year+) (BCEA s.37). | 1 day to 1 month based on service (Labour Act s.11). Longer terms usually set by contract. |
| Severance or end of service | One week’s pay per year for operational dismissals (BCEA s.41). Dismissals must be fair in substance and procedure. | No general statutory severance. Redundancy terms are negotiated or set by contract. |
| Pension and social security | No mandatory pension. UIF 1% employer and 1% employee. Skills Development Levy 1% on larger payrolls. | Contributory pension, employer minimum 10% and employee 8%. |
| Annual leave | 21 consecutive days (15 working days) per cycle (BCEA s.20). | 6 working days after 12 months under the Labour Act (s.18), primarily applicable to manual and clerical workers. For professional employees, annual leave is generally determined by contract, with 15–20 days being common. |
| Minimum wage | R30.23 per hour from 1 March 2026. | ₦70,000 a month. The federal government signalled a review in 2026. |
| Local benefit mandates | Workers’ compensation (COIDA). Employment equity duties for designated employers. | Group life insurance. Industrial Training Fund levy and employee compensation contributions. |
| Key legislation | Basic Conditions of Employment Act 1997; Labour Relations Act 1995; National Minimum Wage Act 2018 | Labour Act (Cap. L1 LFN 2004); Pension Reform Act 2014; National Minimum Wage (Amendment) Act 2024 |
Watch out in Africa: In Nigeria, the Labour Act mainly covers manual and clerical workers, so well-drafted contracts are essential for professional staff. Several states pay above the national minimum wage. In South Africa, the CCMA handles unfair dismissal claims quickly, so documented, fair process matters.
Government Support and Market Entry Incentives
Incentives range from tax relief to talent visas and grants. Most require an application and a local presence, so check eligibility early.
| Region | Market | Key Incentives |
| Asia | Singapore | EDB incentives including the Pioneer Certificate and Development and Expansion Incentive for qualifying businesses. ONE Pass and Tech.Pass for eligible talent, with Tech.Pass transitioning to a new ONE Pass track in January 2027. Standard corporate tax rate of 17%. |
| Hong Kong | Two-tiered corporate profits tax of 8.25% on the first HK$2 million of assessable profits and 16.5% thereafter, subject to eligibility. Enhanced R&D tax deductions, the Top Talent Pass Scheme and free business establishment support from InvestHK. | |
| Mainland China | Preferential 15% corporate income tax for qualifying high-tech enterprises and eligible businesses in designated regions, including Hainan and western China. Individual income tax incentives for eligible talent in selected areas. | |
| Middle East | UAE | Corporate tax of 0% on taxable income up to AED375,000 and 9% above this threshold. Qualifying free-zone businesses may receive 0% tax on qualifying income. Foreign ownership opportunities and Golden Visas for eligible investors and skilled professionals. |
| Saudi Arabia | Regional Headquarters programme with 0% corporate and withholding tax on qualifying activities for 30 years and a 10-year Saudisation exemption. Special Economic Zones with reduced tax and customs duties. | |
| Americas | United States | Federal R&D tax credits and immediate deductions for qualifying domestic research expenditure under the 2025 tax legislation. Additional state and local investment incentives, grants and workforce training support. |
| Canada | Scientific Research and Experimental Development (SR&ED) tax incentives, including enhanced credits for eligible businesses. Global Talent Stream supporting expedited work permit processing for qualifying skilled positions. | |
| Brazil | Lei do Bem tax incentives for qualifying businesses investing in research, development and technological innovation. Regional investment incentives may also be available for eligible projects in designated areas. | |
| Europe | United Kingdom | R&D Expenditure Credit and enhanced support for qualifying R&D-intensive SMEs. Full expensing for eligible plant and machinery, Global Talent visas, and investment incentives through designated Investment Zones and Freeports. |
| Ireland | 12.5% corporate tax on trading income, with a 15% minimum effective tax rate for qualifying large groups. R&D tax credit increased to 35% in 2026, alongside IDA Ireland investment and training support. | |
| Germany | Research allowance (Forschungszulage) covering 25% of eligible R&D expenditure, increased to 35% for qualifying SMEs. From 2026, the annual assessment base is up to €12 million. Regional investment grants may also be available. | |
| Africa | South Africa | Employment Tax Incentive for hiring qualifying young employees aged 18–29. Eligible businesses operating within designated Special Economic Zones may benefit from a reduced corporate tax rate of 15%. |
| Nigeria | Economic Development Tax Incentive offering a 5% annual tax credit on qualifying capital expenditure for approved priority-sector investments. Free Trade Zones offer tax and customs incentives to eligible businesses. |
Incentives are subject to eligibility requirements and regulatory changes. Information is based on government guidance available as of November 2026. Businesses should verify the latest requirements with the relevant authorities before making investment decisions.
Your Pre-Entry Compliance Checklist
- Confirm the governing labour law, including notice, severance and probation rules.
- Calculate full employer cost, including pension, social security and mandatory insurance.
- Confirm leave entitlements and the current minimum wage, including the next review date.
- Review local benefit mandates, visa rules and nationalisation quotas.
- Decide who will monitor labour law changes after launch.
Labour law complexity is not uniform. Lean frameworks such as Singapore, Hong Kong and the US allow fast entry, while China, Brazil, Germany and South Korea demand careful contracts and cost planning. The right entry model, local expertise and ongoing monitoring make expansion sustainable.
Links International supports Employer of Record services across 100+ locations in Asia, the Middle East, the Americas, Europe and Africa. With 25+ years of experience, Links combines in-country specialists with a single account team to keep your expansion compliant. Onboard new employees in less than 48 hours and add Visa and Immigration support where you need it. Contact us to plan your next market entry.
Frequently Asked Questions on Global Expansion, Labour Laws & Market Entry
- What should businesses consider before expanding internationally?
Before entering a new market, businesses should assess local labour laws, employment costs, tax obligations, statutory benefits and government incentives. Choosing the right market entry strategy can help reduce risks and unexpected expenses.
- What is the difference between an Employer of Record (EOR) and setting up a local entity?
An Employer of Record (EOR) enables businesses to hire employees overseas without establishing a local legal entity. The EOR manages employment contracts, payroll, taxes and statutory compliance, while the client oversees daily operations. Setting up a local entity typically requires more time, investment and administrative resources.
- How can businesses hire employees overseas without setting up a local entity?
Businesses can use an Employer of Record (EOR) to hire employees internationally without incorporating a local company. The EOR acts as the legal employer, managing employment administration and local compliance while the business oversees day-to-day work.
- What are the biggest labour law challenges when expanding globally?
Common challenges include differences in termination rules, minimum wages, statutory leave, social security contributions and employee benefits. These requirements vary significantly across countries, making local expertise and ongoing compliance monitoring essential.
- Which countries offer government incentives for international businesses?
Several countries offer incentives to attract foreign investment. For example, Singapore provides qualifying business tax incentives, Hong Kong offers a two-tiered profits tax regime, and the UAE provides benefits for eligible free zone businesses. Eligibility depends on local regulations and business activities.