An EOR provider acts as the legal employer of a client’s employees and seconds the employee back to the client under a service agreement enabling you to hire anyone, anywhere in Asia within 48 hours.
Driven by the rise of remote working and continued need for talent, Employer of Record (EOR) services have become one of the fastest, flexible and cost effective ways to hire employees anywhere in Asia. Typical reasons that companies will use Employer of Record services include:
Hiring under a EOR model significantly reduces the cost and time to enter a market compared with a traditional approach of setting up a legal entity by removing the need to wait for entity setup processes and approvals, ongoing compliance costs and commitment of minimum capital.
Want to focus on strategic functions that aid business growth? Learn how Links Payroll Outsourcing can help reduce HR costs with our stress-free payroll services.
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Imagine if your business could streamline its hiring process by delegating administrative tasks such as payroll, tax compliance, and related complex procedures, while it focuses on attracting talent. This is precisely what the PEO/EOR model offers. Essentially, a PEO/EOR is a service provider that enables companies to outsource the employment, and above payroll responsibilities of these employees, legally, across the locations there the service provider operates in.
With the PEO / EOR approach, the client company’s employees are officially hired by the PEO / EOR firm, which assumes the role of the legal employer of the employees, and handles and manages the payroll, compliance and tax. Meanwhile, the PEO/EOR service provider also maintains the payroll records of the client’s employees as part of the arrangement. This allows the client to focus on directing the daily tasks of their employees and prioritising key business initiatives.
A professional employer organization (PEO) or employer of record (EOR) is an organisation that hires employees on behalf of the employer and seconds them back to the employer. In the case of foreign hiring, they help bypass certain barriers of entry, including the need to set up a business entity and provide additional benefits such as managing employee payroll. PEO allows businesses to have someone on the ground in as little as 48 hours.
PEO works as an outsourced HR unit supported by an external HR solution provider. Many aspects of HR is absorbed by the solution provider under a PEO / EOR model. This can vary depending on the service agreement but can include aspects such as employee administration, payroll processing, work permits, worker compensation insurance, benefits management, recruitment and onboarding, and more.
PEO / EOR services is a flexible solution that allows companies to increase their workforce despite headcount and resource limitations. Good for companies looking to expand into new locations and its benefits include:
PEO / EOR is a highly inexpensive solution for businesses looking to expand into a new location. Starting at US$300/Month, businesses are able to have someone on the ground without the need to set up a business entity that normally requires greater in-country capital and is often costly to set up and maintain.
As a professional HR service, PEO/EOR agencies can help you protect your business against fines and penalties by having compliance experts manage your HR function. This is especially beneficial for the management of new markets and foreign locations where you have limited knowledge of local payroll tax laws and reporting requirements, unemployment insurance, workers’ compensation, hiring and HR compliance.
Employing a PEO/EOR offers numerous advantages for international expansion. The key benefits of outsourcing employment services to an EOR include:
PEO / EOR services streamline overseas employment and payment processes through the following steps:
In most cases, payroll falls under the scope of PEO. This is especially useful for companies growing their workforce rapidly or are struggling to keep up with local regulatory compliance, MPF contributions and more.
Once payroll is set up properly management (even for multi-country) is fairly straightforward. Quality PEO services ensure your employees are paid accurately and on-time, giving companies the peace of mind that their business is fully compliant with local regulations around MPF contributions with dedicated help desk support.
Key aspects to note when deciding on a PEO partner:
At Links, we offer flexible Asia payroll services covering 19 locations across the Asia Pacific. Using a 100% in-country service delivery model, companies can safely rely on us to deliver their PEO.
Multi-country payroll refers to the process of managing and administering payroll for employees in various countries when a company has established a local entity. In other words, the organisation hires their own employees legally, themselves, whilst they outsource the administrative processing to a third-party professional firm.
In multi-country PEO/EOR, the employees are legally hired under the third-party professional PEO/EOR firm, on top of managing and administering the payroll processes for employees.
It is good to note that not all PEO/EOR firms offer payroll outsourcing services, and vice versa.
Links provides EoR services 100% from our own Links entities / team.
A multi-country PEO / EOR acts as the legal employer of the employee while maintaining constant and fluid communication between the company and the employee. A PEO/EOR service will handle the complicates bits of the process and:
On the other hand, the company utilising the PEO/EOR service will only have to handle:
Links and the Client maintain an open communication channel and as part of it, if there are any performance issues leading up to the termination, Client should communicate this intention to Links prior to any communication with the employee(s). Links will advise the compliance and market practice to the client, and will support all administration needed in the termination process.
In the past, hiring remote workers was a common practice. However, both this approach and the alternative of setting up a local entity are now generally discouraged. When a worker exclusively performs tasks for a single company, their legal status can be considered misclassified. As a result, the worker may be entitled to claim full payment for social benefits, paid time off, severance payments, in addition to their monthly compensation from the company.
Some Clients sign a separate non-disclosure clause with the employee, or input certain IP protection clause in the Employment Contract. Note that however, such laws are majorly not enforceable as part of the Labour Law in most locations. Therefore, Links will advise the Client what is the current market practice in the location, prior to suggesting where to get employee’s consent in writing.
Yes, Links offers Group Company Insurances in almost all locations. Note that for some locations, it is a market practice for employees to purchase their own insurance plans and employee can reimburse this paid amount via Links if needed.
Expenses claim will be added to the Total Monthly Gross Relevant Income, and is subject to the corresponding monthly fees relevant to the payout range.
Yes, we are able to provide recruitment and sourcing solution in Singapore, Hong Kong, Mainland China.
Normally, our EOR clients provide work equipment for their employees from their end. However, if needed, Links will be able to purchase the required equipment on behalf of the client and the cost will be charged back to the client.
Upon confirmation of EOR services agreement, our team will reach out to the client to obtain necessary information pertaining to the employee. Once our team receives the information, we will prepare the employment contract according to local labour laws and reach out to the employee for signing within 48 hours.
A suitable PEO / EOR service provider offers a range of features that cater to your needs during expansion. These may include:
Links has our own in-country teams across the region directly supporting our clients in each location. These in-country teams are seasoned with over 20 years of experience in local markets, and are well-equipped with knowledge in respect of local labour laws and regulations, market practices, cultural considerations and customs that might be preferred from industry to businesses. From historical changes to such laws, to future implementations by the government and shift of hiring or employment landscape, our teams work very close with our clients to ensure a hassle-free and compliance hiring across the region, and takes care of any administrations required as part of the service.
Get in touch with one of us today to start streamlining your HR processes across Asia