Employer of Record in Malaysia (EOR in Malaysia)

Hire Globally, Pay Locally, Expand Effortlessly

We act as your Employer of Record in Malaysia. Malaysia, a vibrant and economically thriving country, presents significant opportunities for businesses looking to expand their operations in Southeast Asia. Its strategic location, stable political environment, and skilled workforce make it an attractive destination for foreign investment. However, navigating the complexities of local labor and tax laws can be challenging for businesses unfamiliar with the Malaysian landscape. An Employer of Record in Malaysia can streamline your expansion process and ensure compliance with local regulations.

Want to have a Team in Malaysia TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Want to Have a Team in Malaysia TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Three Steps to Seamless Expansion with a Malaysian Employer of Record

1. Comprehensive Consultation and Planning

After first carefully defining your needs and goals, your Employer of Record will work closely with you to develop a customized solution that aligns with your business strategy.

2. Efficient Setup, Recruitment, and Onboarding

The Employer of Record will handle all legal and administrative matters that come with hiring new local talent or transferring existing global employees, including work permits, visas, payroll, and contract administration. The Employer of Record will ensure a smooth transition for your employees, providing necessary support and guidance, all of which is done without the need for you to establish a new local entity.

3. Ongoing HR Management and Compliance

While your employees get to work in the new market, the Employer of Record ensures compliance with local labor requirements and seamlessly takes over local payroll responsibility. Should changes occur in Malaysian employment laws or employer responsibilities, the Employer of Record will adapt automatically, guaranteeing you and your employees remain safe.

Benefits of Partnering with a Malaysian Employer of Record

New Market Entry

Quickly establish a presence in Malaysia without the need for a local entity.

Full Compliance with Local Laws

Ensure compliance with Malaysian labor regulations, reducing legal risks.

New Sources of Skilled Talent

Tap into the Malaysian talent pool and benefit from the EOR’s expertise in recruitment.

Cost and Time Savings

Avoid the substantial costs associated with setting up a local entity.

Scalability Regardless of Location

Easily scale your operations in Malaysia as your business grows.

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.

 5/5

Employer of Record vs. Company Incorporation in Malaysia: Making the Right Choice

While establishing a subsidiary in Malaysia is a traditional method for local expansion, partnering with an Employer of Record (EOR) offers several advantages:

Speed – An Employer of Record can accelerate the setup process in Malaysia, enabling you to start operations and hire staff much faster than traditional company incorporation, which can take several months. This rapid entry into the market allows you to capitalize on opportunities and gain a competitive edge.
Compliance – Both Employer of Records and subsidiaries must adhere to Malaysian tax laws and labor regulations. However, Employer of Records are well-equipped to manage these complexities, ensuring ongoing compliance and reducing the risk of legal challenges.
Cost – For smaller teams or temporary needs, Employer of Record services are often more cost-effective than establishing a subsidiary. By avoiding the significant upfront costs of incorporation and ongoing administrative expenses, you can optimize your resource allocation. For larger companies, Employer of Records provide streamlined solutions that integrate new markets into multi-country payroll systems seamlessly.
Control – While incorporating offers full control over HR, finances, and operations, Employer of Records provide similar control over your workforce while reducing administrative responsibilities and liability. You can focus on core business activities while the Employer of Record handles the complexities of local employment regulations.

Vital Criteria for Selecting the Best Employer of Record in Malaysia

Choosing the right Employer of Record in Malaysia is crucial for successful market entry. Consider these key factors:

Experience and Market Credibility – Look for a Malaysian Employer of Record with a proven track record and strong market reputation. Client feedback and industry accolades are reliable indicators of trustworthiness.
Comprehensive Service Offerings – Ensure the Employer of Record provides all necessary services or can tailor their offerings to meet your needs, including visa and work permit support, payroll processing, tax compliance, and navigating Malaysia’s tax and labor laws.
Scalability and Flexibility – Opt for an Employer of Record that can expand its services as your business grows. Their team should be capable of managing a growing workforce and adapting to evolving business needs.
Reliable Communication and Transparency – Choose an Employer of Record known for maintaining transparent and consistent communication. They should keep you informed about regulatory updates, upcoming deadlines, and any potential issues, providing a dedicated point of contact and digital tools for easy access to critical information.
Competitive and Clear Costing – Compare the pricing models of different Employer of Record providers. Ensure their fees are clear, competitive, and free of hidden costs. Third-party advice can help you obtain the best value for your Employer of Record in Malaysia.

Malaysian Labor Law

Contracts – In Malaysia, employment contracts are a fundamental part of the employment relationship. Contracts must be in writing for employees covered under the Employment Act of 1955, detailing job responsibilities, working hours, wages, and other terms. For those outside the Act’s purview, general contract law applies, making it crucial to ensure clear, mutually agreed terms for all employees.
Probationary Periods – Employers in Malaysia typically set a probationary period of 3-6 months, allowing time to assess the employee’s performance. While on probation, employees are entitled to most employment rights, and termination must be justifiable, especially if the probation exceeds 3 months.
Working Hours – The standard working week in Malaysia is capped at 48 hours, with daily work hours not exceeding 8 hours per day, and 6 days of work per week. Overtime pay is mandatory for work exceeding normal hours, with rates generally set at 1.5 times the hourly wage.
Paid Leave – Employees are entitled to annual leave based on their length of service, typically ranging from 8 to 16 days. In addition, Malaysian law mandates 11 public holidays per year. Other leave entitlements include paid sick leave (14 to 22 days) and maternity leave of 98 consecutive days for female employees.
Social Insurance – Malaysia’s social insurance schemes, such as the Employees Provident Fund (EPF) and the Social Security Organisation (SOCSO), are mandatory for most employees. Employers and employees both contribute a percentage of the employee’s salary toward these schemes, which provide retirement, medical, and unemployment benefits.
Severance Pay – In Malaysia, severance pay, also known as termination or layoff benefits, depends on the length of service. Employees with at least 12 months of continuous service are entitled to compensation, ranging from 10 to 20 days of wages for each year of service, depending on their tenure.

Managing these complex aspects of Malaysian labor law can be challenging. Partnering with an Employer of Record (EOR) in Malaysia helps ensure compliance with local regulations, safeguarding your business from legal risks and liabilities.

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Recruitment Agency in Malaysia

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FAQs

How does an Employer of Record assist in entering the Malaysian market?

An Employer of Record (EOR) in Malaysia manages the legal, HR, and compliance requirements for hiring employees, allowing businesses to quickly establish a presence without needing to set up a local entity.

What are the cost advantages of using an Employer of Record in Malaysia?

Opting for an Employer of Record in Malaysia can be more financially efficient than creating a local subsidiary, as it removes the need for incorporation costs and reduces ongoing administrative burdens.

Can an Employer of Record handle work visa and permit processes in Malaysia?

Yes, an Employer of Record in Malaysia oversees the entire visa and work permit application process, ensuring full compliance with the country’s immigration regulations.

What kinds of businesses benefit most from Employer of Record services in Malaysia?

Employer of Record services in Malaysia benefit companies of all sizes, particularly those looking for a fast and efficient market entry, cost reduction, and minimized administrative duties.

How does an Employer of Record ensure adherence to Malaysian labor laws?

Employer of Records in Malaysia employ local experts who stay updated on regulatory changes, ensuring full compliance with Malaysian labor laws and managing all related legal obligations.

What level of control do I maintain over employees when using an Employer of Record in Malaysia?

While the Employer of Record in Malaysia becomes the official employer, you still maintain significant control over the day-to-day management and operational responsibilities of your workforce.

Employer of Record in Malaysia (EOR in Malaysia)

Hire Globally, Pay Locally, Expand Effortlessly

Three Steps to Seamless Expansion with a Malaysian Employer of Record