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?
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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.
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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.
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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.
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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.
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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.
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How Does an EOR Ensure Compliance? What Are the Compliance Issues to Take Note Of?
AYP Group’s EOR Malaysia solution ensures compliance by:
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Employment Contracts
We draft and manage employment contracts that adhere to Malaysian labor laws, including terms related to compensation, termination, and employee rights.
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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.
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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.
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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:
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Monthly Service Fees
AYP Group charges a monthly fee based on the number of employees managed, covering employment, compliance, and administrative tasks.
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Payroll Expenses
This includes employee salaries, bonuses, statutory deductions, and contributions such as the Employees Provident Fund (EPF) and Social Security Organization (SOCSO) payments.
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Setup Costs
Initial fees related to the onboarding of new employees, including contract preparation and compliance checks.
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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:
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Initial Consultation
We begin with a consultation to understand your hiring needs and business goals in Malaysia.
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Customized Proposal
AYP Group provides a tailored proposal, outlining the scope of services, costs, and timelines.
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Agreement and Onboarding
Once the agreement is finalized, we initiate the employee onboarding process, including contract preparation, payroll setup, and compliance checks.
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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:
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Payroll Management
We ensure timely and accurate payroll processing, including salary disbursement, tax deductions, and EPF/SOCSO contributions.
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Employee Benefits Administration
AYP Group manages statutory benefits like health insurance, leave entitlements, and retirement contributions, ensuring compliance with Malaysian laws.
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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:
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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).
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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.
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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.
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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.
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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:
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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.
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Assessment and Proposal
We will assess your needs and provide a customized proposal, including detailed pricing and service offerings.
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Agreement and Implementation
Upon agreement, we will initiate the onboarding process, taking over all employment-related functions to ensure a smooth transition.
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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:
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Rapid Onboarding
Quick setup of employment contracts and payroll management.
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Compliance Management
Handling of all local tax and labor law compliance.
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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?
What is the cost of hiring through Employer of Record (EOR) Malaysia services?
Why choose Employer of Record (EOR) Malaysia over direct hiring?
Who is the Employer of Record (EOR) service provider in Malaysia?
What is the process of hiring EOR employees in Malaysia?
The process of hiring employees in Malaysia through AYP’s Employer of Record (EOR) services includes several key steps:
- Requirement Analysis: AYP conducts a detailed analysis of your hiring needs to understand your specific requirements.
- Cost Simulation: AYP provides a cost simulation to give you a clear understanding of the total cost of hiring in Malaysia.
- Work Permit Application: If required, AYP handles the application process for work permits to ensure compliance with Malaysian regulations.
- Contract Preparation: AYP prepares employment contracts that align with Malaysian labor laws.
- Benefits Enrollment: AYP enrolls employees in the necessary benefits programs, ensuring they receive all mandatory entitlements.
- 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
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