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HR Insight
Published:
October 6, 2026
Last updated:
The nasty surprises that come from your first APAC hire are rarely from the candidate themselves. Rather, they come from pay that sits outside base salary, contributions that vary widely by market, contractor arrangements that are legally employment, contract terms that do not travel, and exits that cost more than expected.
Hiring in Asia is harder than it looks. Every market in APAC sets its own rules, so the same global hiring decision can be routine in one country and costly in the next. Here are the five lessons HR leaders most often say they would have planned for earlier.
Some markets require a 13th month payment by law, some expect it by custom, and some have neither. An offer benchmarked on base salary alone can land 8% or more below what the candidate actually compares it to.
What HR leaders wish they had known: in markets where the bonus is custom rather than law, candidates still treat it as part of the package. Budget for it from the first offer, and accrue it monthly rather than finding it at year end.
For companies hiring international employees, employer contributions in APAC markets range from a few percent, capped, to over 20% of salary across several separate schemes. The headline rate rarely tells the full story, because caps, foreign-worker rules and annual changes all move the real number.
What HR leaders wish they had known: foreign hires are not always cheaper or exempt. Malaysia added mandatory EPF for foreign employees from October 2025, and Taiwan extended its labour pension to foreign professionals in 2026. Recheck contribution rules every January, as most of these markets adjust a rate, ceiling or coverage rule each year.
Many companies hiring overseas employees for the first time start with contractors to move quickly. In most of these markets, regulators and courts look at how the work is actually done, not at what the contract calls it, and the cost of getting it wrong is backdated. It is also the first item in our list of Southeast Asia expansion mistakes to avoid.
What HR leaders wish they had known: a contractor who works full time, for one company, on its tools and under its direction usually looks like an employee. Plan the conversion to employment before the arrangement drifts, not after a claim.
A probation period or fixed-term contract that works at headquarters may not be valid in the hiring market. The contract type chosen on day one shapes how flexible the role is a year later.
What HR leaders wish they had known: probation and contract terms are worth agreeing market by market before the offer, rather than adapted from a global template.
Most markets in APAC do not allow at-will termination. Each requires a valid reason and a fair process, and several attach severance early in tenure.
What HR leaders wish they had known: the exit plan belongs in the hiring plan. Accrue severance from the start and document performance concerns as they arise.
When you hire employees abroad through an Employer of Record (EOR) that holds its own legal entity in the market, the employment contract, payroll registration and statutory filings sit with one accountable employer. AYP Group operates its own entities in major APAC markets including Malaysia, Indonesia, Thailand, Taiwan, Hong Kong, Vietnam, and the Philippines, with local in-house teams who manage contracts, payroll and statutory contributions in each one. That means one point of accountability as rules change, rather than a chain of third parties.
Every lesson above comes down to knowing the full picture before the offer goes out: the real cost of the role, the right contract, and what an exit would involve. AYP Group employs staff through its own legal entities in Malaysia, the Philippines, Vietnam, Indonesia, Thailand, Hong Kong and Taiwan, with local teams who run payroll, contracts and statutory contributions in each market. When you are ready to plan your first hire, contact our team to learn more about how we can help with your APAC expansion.
Not ready to commit yet? Try the Employee Cost Calculator for a quick estimate on what your hires will cost you!
Of these seven, the Philippines mandates 13th month pay for rank-and-file employees, and Indonesia mandates the THR religious holiday allowance. In Vietnam and Taiwan, year-end bonuses are strong market practice rather than law.
No. Contract types, probation limits, language requirements and termination grounds differ by market. Vietnam, for example, requires a Vietnamese-language version, and Indonesia does not allow probation on fixed-term contracts.
After 120 days of service, starting at 30 days' wages and rising to 400 days' wages at 20 years or more.
Increasingly, yes. Malaysia added mandatory EPF for foreign employees from October 2025, and Taiwan extended its labour pension to foreign professionals in 2026. Rules differ for each market and pass type.
An Employer of Record employs staff on your behalf through a local entity, handling contracts, payroll, statutory contributions and filings. Where the provider owns that entity, accountability for compliance sits with one employer.
