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Employer of Record & PEO
Published:
15 July 2025
Last updated:
15 July 2025
Setting up a legal entity in Asia can take 3 to 9 months, depending on the country. For example, in Indonesia, incorporating a company involves multiple approvals from the Ministry of Law and Human Rights, which slows down time-to-market. Other bottlenecks include licensing, tax registration, and opening a bank account.
With professional employment services, you can start hiring in as little as 1–4 weeks. The service provider already has a local legal structure in place, meaning you bypass setup entirely and can onboard employees almost immediately.
✅ Verdict: Professional employment services are significantly faster—ideal for companies testing new markets or needing rapid execution.
Professional employment solutions eliminate much of the upfront legal and financial burden. Service fees are typically a flat monthly charge or percentage of gross salary, but when compared holistically, companies save significantly on hidden admin costs and ongoing compliance obligations.
✅ Verdict: Professional employment services offer a leaner cost model—especially valuable for short-term or pilot expansions.
Countries like Thailand and South Korea have complex labor laws around terminations, severance, and statutory benefits. Companies managing in-house HR must stay updated on ever-changing legal requirements—or risk fines, audits, or lawsuits.
A professional employment service provider becomes the legal employer, shouldering all compliance responsibilities — from employment contracts to social security contributions. Many providers work with in-country experts or are locally registered, ensuring accurate, real-time handling of legal obligations.
✅ Verdict: Professional employment services are safer for companies unfamiliar with local labor laws or operating without an in-house legal team.
Shutting down a legal entity in Asia isn't easy. In Vietnam, for instance, it can take 6–12 months and involves tax clearance, labor termination compliance, and complex deregistration processes.
With professional employment services, you can scale operations up or down without dealing with entity wind-down procedures. Whether you're hiring one remote employee in the Philippines or testing a sales team in Malaysia, you maintain full flexibility without long-term liability.
✅ Verdict: Professional employment services are ideal for agile businesses and pilot expansions.
While professional employment services offer an efficient market-entry model, there are scenarios where setting up a legal entity makes strategic sense:
In such cases, professional employment services can serve as a transitional bridge, allowing you to hire and operate while your entity is being set up.
The cost of setting up an entity vs using professional employment services is more than just a financial decision—it affects speed, risk, and flexibility. For companies looking to expand in Asia without setting up a legal entity, these services offer a shortcut to operational readiness without compromising compliance or budget.
Professional employment services are becoming a strategic default for mid-sized businesses entering new markets fast—especially in regions like Southeast Asia, where regulations and timelines vary widely.
At AYP, we help companies hire across 14 Asian markets—without setting up a single entity. With our Professional Employment Service also known as Employer of Record service, you get:
✅ Fast onboarding
✅ In-house local expertise
✅ 100% local compliance
at one flat rate with no hidden costs
👉 Book a Consultation and take your first step toward smarter, faster expansion.
