Employer of Record (EOR) Asia: Your Ultimate Guide to Hiring Across the Continent

Asia is not one market. It is dozens of markets stacked next to each other, each with its own language, legal system, payroll structure, and employment rules. What works in Singapore will not work in Vietnam. What is standard practice in Japan may be entirely different from what is expected in Indonesia.

Yet companies everywhere are trying to hire across Asia. The region is home to some of the world’s fastest-growing economies, deepest talent pools, and most dynamic technology sectors. The opportunity is enormous. But so is the complexity.

This is where EOR Asia services become essential. An employer of record asia model lets businesses hire legally in any Asian country without setting up a local entity. Tarmack handles all the employment infrastructure so you can focus on the work itself.

What Does an EOR Do in an Asian Hiring Context?

An Employer of Record (EOR) is a company that legally employs workers on your behalf in a foreign country. The EOR’s name appears on the employment contract. It manages payroll and statutory benefits, withholds the correct taxes, and ensures every part of the employment relationship is compliant with local law.

You, as the business, direct the employee’s work. The EOR takes care of everything else behind the scenes.

In Asia, this matters more than almost anywhere else. Employment law changes regularly. Tax systems vary widely. Social security contributions work differently in each country. Some markets require government approvals before a foreign company can employ someone locally.

Tarmack has built its EOR Asia infrastructure to handle all of this. Whether you are hiring a developer in India, a sales manager in Japan, or a customer support team in the Philippines, Tarmack ensures you are always on the right side of the law.

Why Companies Are Expanding Their Hiring Across Asia

Several trends are driving this expansion right now. India has become a top destination for engineering, finance, and technology talent, with a large English-speaking workforce and a maturing startup ecosystem. 

Southeast Asia is experiencing rapid economic growth, with countries like Vietnam, Indonesia, and Thailand attracting manufacturing, logistics, and tech investment.

Singapore remains the regional headquarters choice for multinational corporations, thanks to its stable legal system and business-friendly regulations. Japan and South Korea offer deep pools of highly skilled workers in areas like robotics, semiconductors, and advanced manufacturing. 

The Philippines is a well-established hub for customer service, business process outsourcing, and creative work. China, despite its regulatory complexity, remains a critical market for companies with supply chains or large customer bases in the region.

The challenge is that each of these markets has its own rules. Working with an employer of record asia partner like Tarmack is the most practical way to move quickly without making costly compliance mistakes.

Employment Laws Country by Country Across Asia

Here’s precisely what you need to know –

1. India

India has one of the most layered employment law systems in the world. Labour law is a concurrent subject, meaning both central and state governments can legislate. 

Four major Labour Codes consolidating older laws are in the process of being implemented across the country.

The Code on Wages 2019 standardized minimum wage, timely payment of wages, and equal remuneration across industries. The Code on Social Security 2020 consolidates provident fund, gratuity, ESI (employee state insurance), and maternity benefit rules under a single framework. 

Provident Fund contributions are mandatory for companies with 20 or more employees, with both employer and employee contributing 12% of basic salary. Gratuity is payable to employees who complete five or more years of continuous service.

Contract terms, notice periods, and termination processes vary by state and employee category, which makes compliance particularly intricate for foreign businesses. India also operates a progressive personal income tax structure, with tax deducted at source by the employer every month.

• Four Labour Codes consolidating all employment legislation
• Provident Fund: 12% contribution from both employer and employee (20+ staff)
• Gratuity payable after five years of continuous service
• Working hours: 48 per week, varies by state
• Progressive income tax, deducted at source monthly
• Notice periods vary by state, industry, and role

2. China

China’s employment framework is primarily governed by the Labour Law of 1994 and the Labour Contract Law of 2008. The regulatory environment is strict, and compliance is taken seriously by authorities at every level.

Written employment contracts are mandatory and must be signed within one month of an employee starting work. Probation periods are permitted but tightly regulated. 

China’s social insurance system covers pension, medical, unemployment, work injury, and maternity, with contributions required from both employer and employee. The housing provident fund is an additional mandatory savings scheme that both parties contribute to jointly.

Employees cannot be dismissed without cause. Lawful grounds for termination and severance calculations are clearly defined in law, and exceeding the statutory overtime cap of 36 hours per month is a serious offence. 

Personal income tax uses a progressive rate system, with the employer responsible for monthly withholding and annual reconciliation.

• Written contracts mandatory within one month of joining
• Probation capped at six months for long-term contracts
• Overtime limited to 36 hours per month
• Social insurance covers pension, medical, unemployment, maternity, and work injury
• Housing provident fund contributions mandatory for both parties
• Termination without lawful cause is not permitted

3. Japan

Japan has a highly structured employment law system that strongly protects workers. The Labour Standards Act and the Labour Contract Act are the two central pieces of legislation that govern the employment relationship.

Standard working hours are 40 per week and eight per day. Overtime is permitted only under a specific agreement between the employer and employees, and Japan places legal caps on those overtime hours. 

Exceeding the limit is a criminal offence. Dismissal of an employee in Japan is very difficult. There is a long history of court precedent requiring objectively reasonable grounds and social acceptability before any termination is considered lawful.

Annual paid leave entitlement starts at 10 days after six months of service and increases with tenure. Social insurance contributions covering health, pension, and employment are split between employer and employee. 

All employment documentation must be in Japanese, and payroll processing follows strict statutory timelines.

• 40-hour week; overtime only under a formal employee agreement
• Legal overtime caps; exceeding them is a criminal offence
• Dismissal requires objectively reasonable grounds
• Annual leave starts at 10 days, increases with tenure
• All employment documents must be in Japanese

4. South Korea

South Korea has strong employee protections under the Labour Standards Act. The country is known for a highly skilled workforce and a robust manufacturing and technology sector, making it a common hiring destination for international businesses.

The standard working week is 52 hours, comprising 40 regular hours and up to 12 hours of overtime. Enforcement of this cap is strict. Fixed-term contracts are limited to two years in total. 

Beyond that point, the employee must be treated as permanent. Four major social insurance schemes apply: national pension, health insurance, employment insurance, and industrial accident compensation insurance.

Severance pay is mandatory for employees who have worked for one or more years, equivalent to 30 days of average wages per year of service. 

Annual paid leave entitlement is 15 days after one year of service, with additional days accruing with longer tenure. Personal income tax is withheld monthly and reconciled through an annual year-end settlement process.

• 52-hour weekly cap strictly enforced
• Fixed-term contracts limited to two years before permanent status applies
• Mandatory severance of 30 days’ wages per year of service
• Four social insurance schemes: pension, health, employment, accident
• Annual leave starts at 15 days after one year

5. Singapore

Singapore is one of the easiest places in Asia to hire and manage employees. The Employment Act governs most private sector workers, and the government regularly updates the framework to remain both competitive and fair.

The Central Provident Fund (CPF) is Singapore’s mandatory social security scheme. 

Contributions from both employer and employee are required for Singapore citizens and permanent residents. Work passes, including the Employment Pass, S Pass, and Work Permit, are required for foreign workers and carry specific salary and qualification thresholds that must be met.

Employees are entitled to a minimum of seven days of annual leave in the first year, increasing with tenure. Fair employment guidelines under the Tripartite Alliance discourage discrimination in hiring and retention. 

Personal income tax rates are progressive with a maximum rate of 24%, and employers must facilitate annual tax filing for their employees.

• CPF mandatory for citizens and permanent residents
• Work passes required for all foreign hires, with salary thresholds
• Minimum seven days annual leave in year one
• Progressive income tax up to 24%
• Tripartite fair employment guidelines actively enforced

6. Philippines

The Philippines is governed by the Labour Code of the Philippines, one of the more comprehensive employment frameworks in Southeast Asia. The country is a major outsourcing destination with a large, English-speaking workforce and strong statutory worker protections.

Regular employment status is achieved after a probationary period of up to six months. Beyond this point, employees gain full security of tenure. 

The 13th month pay is a statutory requirement. All rank-and-file employees must receive an additional month’s salary by 24 December each year. Social contributions cover SSS, PhilHealth, and Pag-IBIG, all shared between employer and employee.

Standard working hours are eight per day and 48 per week, with overtime paid at a 25% premium on regular days and 30% on rest days. Termination requires just cause or authorised cause, both strictly defined by law, and procedural requirements must be followed carefully to avoid liability.

• Six-month probation; full security of tenure after that
• 13th month pay statutory, due by 24 December
• SSS, PhilHealth, and Pag-IBIG contributions mandatory
• Overtime at 25% on regular days, 30% on rest days
• Termination requires just cause and strict procedural compliance

7. Vietnam

Vietnam’s Labour Code 2019 significantly updated the country’s employment framework and came into effect in January 2021. The country has become a major manufacturing and technology hub, drawing growing interest from businesses looking to diversify their regional operations.

Employment contracts must be in Vietnamese and signed before work begins. Fixed-term contracts are allowed for up to 24 months and can be renewed once before converting to an indefinite arrangement. Social insurance, health insurance, and unemployment insurance contributions are compulsory for both employer and employee.

Standard working hours are eight per day and 48 per week, with overtime capped at 200 to 300 hours per year depending on the sector. Employees are entitled to 12 days of annual leave after one full year of service. 

Termination of indefinite contracts requires advance notice ranging from 30 to 120 days depending on the employee’s role.

• Contracts in Vietnamese, signed before work begins
• Fixed-term contracts up to 24 months, renewable once
• Overtime capped at 200–300 hours per year
• 12 days annual leave after one full year
• Indefinite contract termination requires 30–120 days notice

8. Indonesia

Indonesia’s employment framework was significantly changed by the Job Creation Law of 2020 and its implementing regulations. The country is Southeast Asia’s largest economy and an increasingly important hiring destination for businesses entering the region.

Fixed-term contracts are limited to a maximum of five years in total, including renewals. BPJS Ketenagakerjaan and BPJS Kesehatan contributions are mandatory for all employees, covering work-related social security and health insurance respectively. 

Severance pay obligations apply upon termination, calculated based on years of service and the reason for termination.

Regional minimum wages vary significantly across provinces and cities and are updated annually. 

Religious holiday allowance must be paid to employees before major religious holidays, equivalent to one month’s salary for those with 12 or more months of service. Working hours are 40 per week, with overtime limited and compensated at statutory premium rates.

• Fixed-term contracts capped at five years total
• BPJS Ketenagakerjaan and BPJS Kesehatan mandatory for all staff
• Severance calculated on tenure and reason for termination
• Minimum wages set by province, updated annually
• Religious holiday allowance (THR) of one month’s salary mandatory

9. Thailand

Thailand’s Labour Protection Act, with amendments most recently in 2019, governs private sector employment. Thailand has a growing economy and a large workforce in manufacturing, tourism, and services, making it a common target for businesses expanding in Southeast Asia.

Standard working hours are eight per day and 48 per week for general work, with reduced limits applying to hazardous occupations. Annual leave is a minimum of six days per year after one full year of service. 

Social Security Fund contributions are required from both employers and employees, covering health, disability, maternity, and unemployment benefits.

Severance pay is statutory and calculated based on years of service. Foreign workers must obtain a work permit, with permit categories determining the types of roles a foreign national may perform. Personal income tax is withheld monthly on a progressive scale.

• 48-hour week (42 for hazardous roles)
• Social Security Fund covers health, disability, maternity, unemployment
• Statutory severance ranges from 30 to 400 days of wages
• Work permits required for all foreign nationals
• Minimum six days annual leave after one year

10. Malaysia

Malaysia’s Employment Act 1955 is the principal piece of labour legislation for Peninsular Malaysia. The Act was significantly amended in 2022 to expand its coverage and introduce new protections for a wider range of employees.

The 2022 amendments expanded the Employment Act to cover all employees regardless of salary level. 

The standard working week is 45 hours, with overtime paid at 1.5 times the hourly rate on regular days and higher rates on rest days and public holidays. Employees Provident Fund (EPF) contributions are mandatory for Malaysian citizens and permanent residents, with both employer and employee contributing monthly.

Paternity leave of seven days was introduced in the 2022 amendments, alongside improvements to maternity leave provisions. Annual leave starts at eight days for the first two years of service and increases with tenure. SOCSO contributions cover work injury and invalidity benefits for all employees.

• Employment Act now covers all employees regardless of salary
• 45-hour week; overtime at 1.5x on regular days
• EPF and SOCSO contributions mandatory
• Annual leave starts at eight days, increases with tenure
• Seven days paternity leave introduced under 2022 amendments

How Tarmack Simplifies Hiring Across Asia

No two Asian markets are the same. Between mandatory social contributions, locally required contract formats, strict termination rules, and government approval processes, the compliance burden of hiring across Asia is significant for any business working without local infrastructure.

Tarmack takes on that burden entirely. As your EOR Asia partner, we provide locally drafted employment contracts in the correct language, format, and structure for each country. 

We handle in-country payroll processing that accounts for all applicable taxes, social contributions, and statutory deductions. We calculate and pay statutory benefits including provident fund contributions, gratuity, 13th month pay, and severance accurately and on time.

We also provide onboarding support aligned with local requirements, visa and work permit guidance where applicable, and ongoing compliance monitoring so that changes in local law are reflected in how we manage your workforce. 

Every country we operate in is supported by a team that understands the employment landscape there.

With Tarmack, you can hire your first employee in a new Asian market in a matter of days. There is no need to register a legal entity, engage a separate law firm in each country, or build your own HR infrastructure from scratch. 

Our employer of record asia model scales with your ambitions, whether you need one hire or a hundred across multiple markets simultaneously.

Start Hiring Across Asia With Tarmack

Asia represents some of the greatest talent and growth opportunities available to businesses today. The complexity of hiring across the continent is real, but it does not have to slow you down.

Tarmack is your EOR Asia partner, handling local compliance in every market so you can hire with confidence, move quickly, and build the team you need.

From India to Japan, Singapore to Vietnam, we are already operating in the markets that matter most. Let us handle the employment side of things while you get on with building your business.

Contact us to learn more or speak with our team about your hiring plans in Asia.