Employer of Record 101: How to Hire Overseas Without Setting Up a Local Entity
- Ma
- Aug 13
- 3 min read
Expanding your team beyond borders is exciting… until you meet the mountain of paperwork. Setting up a legal entity in a new country can take months, cost thousands, and involve navigating laws you didn’t even know existed.
That’s where the Employer of Record—or EOR—comes in.
Think of EOR as the shortcut to international hiring. You find the talent, and the EOR handles all the legal and compliance headaches. It’s like having a local HR department in every country—without paying rent for the office.
And if you’re headquartered in Singapore and looking to hire in Malaysia (or vice versa), the EOR route could save you serious time, money, and stress.
What Is an Employer of Record (E.O.R), in Plain English?
An Employer of Record is a third-party organisation that officially hires and pays employees on your behalf in a country where you don’t have a legal entity. They handle payroll, taxes, benefits, and employment contracts, while you manage the person’s day-to-day work.
So on paper, the employee works for the EOR. In reality, they’re part of your team.
Why companies use EOR:
Skip the months-long process of entity registration
Avoid misclassifying workers (and the legal trouble that comes with it)
Comply with local labour laws without hiring an in-house legal team
Pay employees in their local currency without setting up complex banking systems
In Southeast Asia, EOR is increasingly common for Singaporean companies hiring Malaysian talent—and vice versa—because the markets are tightly connected but operate under different employment laws.
When an EOR Is a Game-Changer
While EOR isn’t the answer for every hiring situation, there are moments when it’s a lifesaver.
1. Testing a new market
You’re not 100% sure about committing to a country long-term. Instead of spending months and thousands setting up a local entity, you can use an EOR to hire one or two employees and test the waters.
2. Urgent project launches
Got a big client project kicking off in Malaysia next month, but you need local talent now? EOR lets you bring them onboard legally in weeks, not months.
3. Hiring remote specialists
You’ve found the perfect candidate in another country. With EOR, you don’t need to tell them “we can’t hire you until we open an office there.”
4. Avoiding legal risk
Every country has its own employment rules—taxes, benefits, termination clauses. Getting them wrong can mean hefty fines. EOR providers keep you compliant.
How It Works (Singapore → Malaysia Example)
Here’s a fictional but realistic story based on common cases we see:
Example Scenario:
A Singapore-based digital services startup had a regional rollout project and needed a Project Manager in Malaysia—fast. Setting up a Malaysian entity would have taken 4–6 months and cost upwards of SGD 20,000 in legal and administrative fees.
Instead, they engaged an Employer of Record. Within two weeks, the candidate was legally employed in Malaysia, fully compliant with local regulations, and ready to lead the rollout.
The result? The company estimates they saved over 40% in costs and avoided navigating Malaysian payroll, benefits, and tax compliance entirely.
This is the kind of speed and flexibility EOR provides—whether you’re hiring one person or building an entire remote team.
The Step-by-Step EOR Process
With a Singapore–Malaysia EOR, the process looks like this:
Planning & Setup
You share the role, location, and start date. The EOR confirms legal requirements, drafts compliant contracts, and aligns timelines.
Legal Employment
The EOR becomes the official employer under its local entity.
Onboarding
The candidate starts work for you, while HR admin stays in the background.
Payroll & Benefits
Salaries are processed, statutory contributions paid, and benefits administered in compliance with local laws.
Ongoing Support
The EOR stays as your partner for HR, payroll, and compliance support.
Why Singapore & Malaysia Are Perfect for EOR
Cross-border talent flow is already high due to shared business ties and proximity.
Different employment laws make direct hiring complex. For example, Malaysia enforces a statutory minimum wage, while Singapore does not.
Currency differences mean payroll can be tricky—EOR smooths the process.
Speed to market matters. A new opportunity can vanish if setup takes too long. EOR shortens the timeline dramatically.
An Employer of Record (EOR) lets you hire overseas without opening a local entity. They employ your team members on paper, handle payroll, taxes, and compliance, while you manage the work. For Singapore companies hiring in Malaysia—or vice versa—EOR can mean weeks instead of months, 40% cost savings, and zero legal headaches. If you want speed, compliance, and flexibility in cross-border hiring, EOR is your best friend.
Drop us a message and we will discuss how we can help you with our E.O.R Services.
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