Malaysia

Employer of Record (EOR) in Malaysia

Employer of Record (EOR) in Malaysia

Table of Contents
Expand business in Asia without a local entity setup

Manage payroll, talent, local compliance and scale your business with AYP’s Employer Of Record (EOR) service

What is an Employer of Record (EOR), and How Does it Work?

An Employer of Record (EOR) in Malaysia is a service that allows companies to hire and manage employees in Malaysia without establishing a legal entity in the country. AYP Group’s EOR Malaysia solution acts as the official employer for your employees, taking on all legal and administrative responsibilities. This includes managing payroll, taxes, benefits, and compliance with local labor laws.

By leveraging AYP Group’s EOR services in Malaysia, your company can efficiently expand into the Malaysian market, focusing on business growth while we handle the complexities of employment.

What are the Advantages of Using an EOR?

  1. Accelerated Market Entry

    With AYP Group’s EOR Malaysia solution, your business can quickly establish a presence in Malaysia without the need for lengthy setup processes. This enables you to start operations and hire employees almost immediately.

  2. Cost Efficiency

    Avoid the high costs associated with setting up a local entity, including legal, administrative, and HR-related expenses. The EOR model provides a cost-effective alternative, allowing you to invest resources where they are most needed.

  3. Compliance Assurance

    Navigating Malaysia’s labor laws and regulations can be complex. AYP Group ensures full compliance with all local employment laws, protecting your business from potential legal issues.

  4. Administrative Relief

    AYP Group handles all HR-related tasks, from payroll processing to employee benefits administration, freeing up your internal team to focus on strategic activities.

  5. Scalability

    Easily adjust your workforce in Malaysia according to your business needs without the limitations of managing a local entity. This flexibility is crucial for companies looking to enter or expand in the Malaysian market.

Have questions about hiring in Malaysia?

Get guidance on compliance, costs, and local support from our experts

How Does an EOR Ensure Compliance? What Are the Compliance Issues to Take Note Of?

AYP Group’s EOR Malaysia solution ensures compliance by:

  1. Employment Contracts

    We draft and manage employment contracts that adhere to Malaysian labor laws, including terms related to compensation, termination, and employee rights.

  2. Tax and Social Security Contributions

    AYP Group manages all payroll-related taxes and contributions, ensuring compliance with Malaysia’s tax laws and social security requirements.

  3. Employee Rights and Benefits

    We ensure that your employees receive all legally mandated benefits, such as leave entitlements and social security contributions, in accordance with Malaysian law.

  4. Documentation and Reporting

    AYP Group maintains thorough documentation and provides regular reports, ensuring transparency and compliance with local regulations.

Key compliance issues to note include:

  • Ensuring that employment contracts are compliant with Malaysian labor laws.
  • Adhering to local tax and social security regulations.
  • Staying updated with changes in labor laws and regulations.

What Are the Costs Associated with Using an EOR?

The costs of utilizing an EOR in Malaysia generally include:

  1. Monthly Service Fees

    AYP Group charges a monthly fee based on the number of employees managed, covering employment, compliance, and administrative tasks.

  2. Payroll Expenses

    This includes employee salaries, bonuses, statutory deductions, and contributions such as the Employees Provident Fund (EPF) and Social Security Organization (SOCSO) payments.

  3. Setup Costs

    Initial fees related to the onboarding of new employees, including contract preparation and compliance checks.

  4. Forex Mark-up and Bank Charges

    When dealing with multiple currencies, forex mark-ups are necessary to manage exchange rate fluctuations, ensuring consistent and accurate salary payments. Combined with applicable bank charges, these costs are integral to maintaining smooth international payroll operations.

How Does the Process of Using an EOR Work? What is the Timeline to Onboard an Employee?

The process of using AYP Group’s EOR Malaysia solution is streamlined for efficiency:

  1. Initial Consultation

    We begin with a consultation to understand your hiring needs and business goals in Malaysia.

  2. Customized Proposal

    AYP Group provides a tailored proposal, outlining the scope of services, costs, and timelines.

  3. Agreement and Onboarding

    Once the agreement is finalized, we initiate the employee onboarding process, including contract preparation, payroll setup, and compliance checks.

  4. Employee Onboarding

    AYP Group handles all aspects of onboarding, from executing employment contracts to enrolling employees in benefits programs.

The typical timeline to onboard an employee in Malaysia through our EOR service is 1 to 3 weeks, depending on the complexity and specific requirements.

How Does an EOR Manage Employee Benefits and Payroll?

AYP Group’s EOR Malaysia service manages employee benefits and payroll with precision:

  1. Payroll Management

    We ensure timely and accurate payroll processing, including salary disbursement, tax deductions, and EPF/SOCSO contributions.

  2. Employee Benefits Administration

    AYP Group manages statutory benefits like health insurance, leave entitlements, and retirement contributions, ensuring compliance with Malaysian laws.

  3. Benefits Optimization

    We continuously review and optimize benefits packages to ensure they are competitive and compliant with local regulations.

What is the Process of EOR in Malaysia for Foreign Employees

AYP Group’s Employer of Record (EOR) in Malaysia service simplifies the hiring and management of foreign employees:

  1. Needs Assessment

    We begin by evaluating your business requirements to determine the most suitable work permit in Malaysia, such as the Employment Pass (EP) or Professional Visit Pass (PVP).

  2. Work Permit Application

    AYP Group handles the entire application process for the work permit in Malaysia with the relevant authorities, ensuring full compliance with Malaysian immigration regulations and timely approval.

  3. Employment and Onboarding

    We draft compliant employment contracts in line with Malaysian labor laws and manage the onboarding process, including setting up payroll and administering employee benefits.

  4. Ongoing Compliance

    AYP Group ensures continuous adherence to local labor laws, manages any HR-related issues, and handles the renewal of work permits in Malaysia as needed.

  5. Offboarding

    When an employee’s tenure ends, we manage the entire exit process, including work permit cancellations and final payroll processing, ensuring all legal obligations are met.

This process allows your company to efficiently hire and manage foreign talent in Malaysia without establishing a local entity, leveraging AYP Group’s EOR in Malaysia services for seamless and compliant operations.

How to Get Started with EOR?

Starting with AYP Group’s EOR Malaysia solution is straightforward:

  1. Contact Us

    Reach out to our team for an initial consultation to discuss how our EOR services in Malaysia can support your business expansion in Malaysia.

  2. Assessment and Proposal

    We will assess your needs and provide a customized proposal, including detailed pricing and service offerings.

  3. Agreement and Implementation

    Upon agreement, we will initiate the onboarding process, taking over all employment-related functions to ensure a smooth transition.

  4. Ongoing Support

    AYP Group continues to provide ongoing HR, compliance, and payroll management support, ensuring your business operates seamlessly in Malaysia.

Use Case: How Employer of Record (EOR) helps company to expand without an entity in Malaysia

A European software company aimed to expand its operations into Malaysia to tap into the growing tech industry. Instead of establishing a local entity, which would involve significant time and financial investment, they chose AYP Group’s EOR Malaysia solution.

Challenges:

  • Urgent need to enter the Malaysian market to gain a competitive advantage.
  • Navigating Malaysia’s complex employment regulations.
  • Establishing a local HR infrastructure would have been resource-intensive.

Solution:

AYP Group provided a comprehensive EOR solution, including:

  • Rapid Onboarding

    Quick setup of employment contracts and payroll management.

  • Compliance Management

    Handling of all local tax and labor law compliance.

  • Employee Benefits

    Administration of statutory benefits like EPF, SOCSO, and health insurance.

Outcome:

The company successfully hired and onboarded employees in Malaysia within weeks, allowing them to start operations immediately. They avoided the costs and complexities of setting up a local entity while remaining fully compliant with all regulatory requirements. The use of AYP Group’s EOR solution enabled seamless expansion, providing the agility to scale quickly in a new market.

With AYP Group’s Employer of Record solution in Malaysia, businesses can efficiently expand their operations without the need for a local entity, ensuring compliance, cost-effectiveness, and a smooth transition into new markets. Contact us today to learn how our EOR Malaysia services can support your business growth.

FAQs

What is Employer of Record Malaysia?
An Employer of Record (EOR) in Malaysia simplifies the hiring process by assuming all legal responsibilities for your employees. This allows businesses to recruit and manage talent in Malaysia without the need to establish a local entity, facilitating seamless expansion and operations in the region. By using an EOR in Malaysia, companies can focus on their core business activities while the EOR ensures compliance with local labor laws and regulations.
The cost of hiring employees through an Employer of Record (EOR) in Malaysia generally ranges from USD 250 to USD 600 per employee per month. This fee covers essential services such as HR administration, payroll processing, compliance management, and benefits administration. With an EOR in Malaysia, businesses gain access to local expertise that ensures smooth operations and adherence to local legal requirements.
Choosing an Employer of Record (EOR) in Malaysia enables your business to enter and expand in new markets with minimal effort. An EOR in Malaysia takes care of HR administration, legal compliance, and employee management, ensuring your business adheres to local regulations. This allows you to concentrate on growing your business while the EOR handles the complexities of hiring and managing employees in Malaysia.
Several companies offer Employer of Record (EOR) services in Malaysia, including AYP. AYP provides a comprehensive EOR solution, helping companies to hire, manage, and pay employees while ensuring full compliance with Malaysian regulations. With transparent pricing and no hidden fees, AYP delivers peace of mind for businesses looking to expand into Malaysia.

The process of hiring employees in Malaysia through AYP’s Employer of Record (EOR) services includes several key steps:

  1. Requirement Analysis: AYP conducts a detailed analysis of your hiring needs to understand your specific requirements.
  2. Cost Simulation: AYP provides a cost simulation to give you a clear understanding of the total cost of hiring in Malaysia.
  3. Work Permit Application: If required, AYP handles the application process for work permits to ensure compliance with Malaysian regulations.
  4. Contract Preparation: AYP prepares employment contracts that align with Malaysian labor laws.
  5. Benefits Enrollment: AYP enrolls employees in the necessary benefits programs, ensuring they receive all mandatory entitlements.
  6. Employee Onboarding: AYP sends a welcome email and facilitates a smooth onboarding process, ensuring new hires are ready to start their roles effectively.

This streamlined process allows businesses to onboard employees in Malaysia quickly and in full compliance with local laws, with AYP managing all administrative and legal aspects.



Hire compliantly in the Malaysia with no hidden cost

Local labor compliance, payroll management, onboarding, and expert advisory — all in one service

We use cookies

This website use cookies to ensure you get the best experience on our website. For more information, see our Cookie Policy