Hire Employees Across Asia Pacific

All thirteen markets AYP covers. An employer of record employs the person through a licensed local entity it already holds, so you need no incorporation, no local director and no paid-up capital of your own. That applies in Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. The alternative route, engaging an independent contractor, is available in twelve of the thirteen. China is the exception: a company with no Chinese entity generally cannot lawfully engage an individual directly, and payment normally has to run through a licensed agent.

More than most companies budget for. The range runs from roughly 5% to roughly 30%, and the shape of the cost matters as much as the headline rate.

Hong Kong and Thailand are the lightest, both at 5%, and both capped: MPF at HK$1,500 a month and the Social Security Fund at THB 875 a month, so the effective percentage falls as salaries rise. South Korea sits around 10 to 12%, Indonesia around 11.4%, the Philippines 12 to 14%, Malaysia up to 15.95%, India and Japan around 16 to 17%, Taiwan 17 to 20%, Vietnam 21.5%, and China is the heaviest at roughly 27 to 30%, set city by city rather than nationally.

Two things sit outside the percentage. Singapore's 17% CPF applies only to citizens and permanent residents, not to foreigners on a work pass, which is the single most common costing error overseas employers make. And several markets add a mandatory annual payment on top of contributions: Indonesia's THR religious bonus and the Philippines' 13th-month pay are each worth a further month of salary.

‍

Anywhere from one week to six months, depending entirely on the market.

Singapore is fastest at 1 to 3 weeks with ACRA, followed by Hong Kong at 1 to 4 weeks and Australia at 2 to 4 weeks with ASIC. Malaysia and India run 4 to 8 weeks, Thailand 6 to 12 weeks. Indonesia, Vietnam and Taiwan all take 2 to 4 months, and Japan is the slowest at 3 to 6 months.

Speed is not the whole picture, though, and in the fast markets it is not the point at all. Singapore incorporates quickly but requires a locally resident director and costs SGD 12,000 to 30,000 a year to maintain. Australia incorporates quickly but means registering for payroll tax and workers' compensation in every state you employ in. Indonesia requires IDR 10 billion in paid-up capital. The Philippines is quick to open but takes 9 to 18 months to close, because dissolution needs tax clearance first.

It varies by market, and the common assumption of "about thirty" is right in seven of the thirteen.

Japan, the Philippines and South Korea cross over at around twenty employees. Malaysia, Indonesia, Singapore, Vietnam, Thailand, Hong Kong and Taiwan sit at around thirty. India is the outlier at around fifty, largely because a global capability centre only justifies the multi-state registration overhead at scale. Australia and China turn less on headcount than on commitment: Australia because the cost is driven by how many states you employ in rather than how many people, China because it is driven by how many cities.

Below those thresholds the setup cost and annual compliance overhead rarely pay back. Above them, an entity usually does, and an employer of record becomes the more expensive option per head.

Yes. That is the main practical reason companies use an employer of record regionally rather than country by country. Hiring in Malaysia this quarter and Vietnam, the Philippines or Japan next means the same contract, the same account team and one invoice, instead of thirteen sets of registrations, thirteen payroll providers and thirteen sets of local statutory deadlines.

It also removes a specific trap. Several markets gate work-visa sponsorship behind conditions a new entity cannot meet. South Korea generally requires at least five Korean employees and a foreign-worker ratio under 20% before your own entity can sponsor an E-7, and Japan expects around ¥30 million in paid-up capital plus proof of business substance. An established employer of record already satisfies those tests, so a first foreign hire is possible on day one rather than after a local team exists.

Only where the relationship is genuinely one of contract for services, and the test is applied to the facts rather than the paperwork. Across every market in the region, authorities look at the same things: whether you direct how the work is performed, whether the person is integrated into your organisation, and whether they depend economically on your business. A well-drafted agreement carries very little weight against a day-to-day arrangement that looks like employment.

Reclassification is retrospective, so the exposure grows every month an arrangement continues. What it costs depends on the market. Vietnam's Labour Code 2019 looks explicitly at substance over label. Australia treats deliberate misrepresentation as sham contracting, a contravention in its own right. Thailand and South Korea add statutory severance that may be treated as accruing from the original engagement date. India adds gratuity on the same basis. And China is the outright exception: a foreign company with no Chinese entity generally cannot engage an individual directly in the first place.

Paying a local person directly from a foreign entity also risks creating a permanent establishment for that entity, which is a corporate tax problem rather than an employment one, and the exposure most companies miss entirely.