Why Are Companies Hiring Internationally More Than Ever?

Remote work has changed the world of hiring. Companies are no longer limited to local talent pools. They now have access to global professionals, offering them the flexibility to hire the best talent regardless of location.

This shift has been accelerated by digital collaboration tools, growing acceptance of remote work, and the need for specialized skills in competitive markets. Many businesses, especially startups and tech-driven companies, are turning to Asia for cost-effective and high-quality talent. But international hiring also brings complexities—chief among them being legal and compliance risks when companies don’t have a registered presence in foreign countries.

This is where hiring internationally without setting up a local entity comes in—through solutions like an Employer of Record (EOR).

What Does “Hiring Without a Local Entity” Actually Mean?

Traditionally, if a company wanted to hire employees in another country, it needed to establish a legal entity—a business structure registered under that country’s laws. Setting up an entity involves extensive paperwork, local office requirements, financial investment, and a deep understanding of labor, tax, and corporate laws.

Hiring without a local entity means a company can employ individuals in a foreign country without creating a business presence there. Instead, the company works with a third-party service provider—most often an EOR—that takes on the legal employer role while the original company still directs the employee’s day-to-day work.

This allows companies to expand quickly, legally, and cost-effectively.

What Is an Employer of Record (EOR), and How Does It Work?

An Employer of Record (EOR) is a third-party service that legally employs workers on behalf of another company in a country where that company has no registered presence. The EOR handles everything related to:

• Employment contracts and onboarding
  
• Payroll processing and tax withholding
  
• Social security contributions
  
• Statutory and optional employee benefits
  
• Compliance with local labor laws
  

Let’s break it down: your company finds the right candidate in a country like India, the Philippines, or Vietnam. The EOR legally hires that person, manages all HR-related requirements, and ensures compliance with local laws. Meanwhile, your company assigns work, manages performance, and integrates the employee into the team.

Why Avoid Setting Up a Local Entity for Global Hiring?

Creating a legal entity in each country where you hire is often unnecessary and expensive, especially when you only need a few employees in that region or are testing a new market.

Some key reasons businesses avoid setting up a local entity:

• High upfront costs: Legal fees, registration expenses, and office space can run into tens of thousands of dollars.
  
• Time-consuming setup: It may take 3–6 months (or more) to set up a fully functional legal entity.
  
• Regulatory risk: Navigating foreign labor and tax laws requires local expertise.
  
• Operational burden: Managing local payroll, compliance, and reporting adds complexity.
  
• Lack of flexibility: Scaling up or down becomes harder when you’re tied to a fixed business structure.
  

With an EOR, these problems are avoided.

What Are the Core Benefits of Hiring Internationally Without an Entity?

Here are the key benefits companies enjoy when hiring international talent without establishing a local legal entity:

1. Faster Access to Global Talent

Using an EOR, companies can start hiring in 1–2 weeks, as opposed to the months it takes to establish an entity. This is especially important when time-to-hire is critical, such as for:

• Launching a new product in a regional market
  
• Expanding customer support across time zones
  
• Meeting project-based staffing needs quickly
  

With EOR onboarding, companies can stay agile and respond quickly to talent needs.

2. Cost Savings on Expansion

Setting up a legal entity in a foreign country typically requires:

• Upfront legal and consulting fees
  
• Ongoing administrative and compliance costs
  
• Bank accounts and office registration
  
• Local director or representative appointments
  

All of this adds up. By contrast, an EOR solution has low startup costs and predictable monthly fees per employee, making it easier to budget for global growth.

Here’s a typical cost comparison:

Method	Upfront Cost	Monthly Cost	Time to Hire
EOR	Low (Often under $1,000)	$500–$1,000 per employee	1–2 weeks
Entity Setup	$10,000+	$2,000+/month	3–6 months

3. Legal Compliance Without the Complexity

Each country has unique employment laws. In Asia-Pacific alone, countries like India, Singapore, and Indonesia have distinct regulations for:

• Working hours
  
• Holidays and paid leave
  
• Termination policies
  
• Tax filings
  
• Employee classification
  

An EOR stays updated with these laws and ensures your company remains compliant. You won’t need an in-house legal team for every country you hire in—EORs already have local legal experts.

4. Simplified Payroll and Benefits

Paying employees in different countries means dealing with:

• Multi-currency payroll
  
• Social contributions
  
• Country-specific benefits
  
• Tax withholdings and filings
  

EORs manage local payroll in the employee’s currency and offer statutory and optional benefits that help attract top talent. This removes the burden of currency conversion, payroll software, and banking hurdles for your HR and finance teams.

5. Reduced Risk of Misclassification

Misclassifying full-time employees as independent contractors can lead to serious penalties, including:

• Back taxes and fines
  
• Legal liability
  
• Reputational damage
  

An EOR eliminates this risk by acting as the legal employer. Workers are properly classified, and all government requirements are met.

6. Scalability and Flexibility

EORs support flexible hiring across regions. Whether you need to:

• Hire 1 designer in Vietnam
  
• Onboard 5 developers in the Philippines
  
• Downsize a sales team in Malaysia
  

An EOR can quickly scale your workforce up or down, without the administrative complications of setting up or winding down entities.

This is especially useful for:

• Market testing
  
• Temporary projects
  
• Acquisitions or partnerships
  
• Seasonal hiring
  

7. Access to Local HR Support

EORs provide ongoing HR services including:

• Contract management
  
• Onboarding/offboarding
  
• Employee relations
  
• Local language support
  
• Cultural advice
  

This ensures smooth communication and alignment, even across borders. Employees feel supported, and companies avoid misunderstandings due to cultural or regulatory gaps.

8. Stronger Employer Branding in Local Markets

EORs help companies offer competitive compensation and benefits that meet local standards. This strengthens employer branding and increases your ability to attract top-tier candidates.

For instance:

• In India, top talent expects Provident Fund and medical insurance.
  
• In the Philippines, government-mandated benefits like SSS, PhilHealth, and Pag-IBIG are required.
  
• In Singapore, Central Provident Fund (CPF) contributions are a must.
  

The EOR handles these for you, ensuring you’re seen as a compliant and attractive employer.

Where in Asia Are Companies Hiring Remote Talent Through EORs?

Asia-Pacific is a hotbed for remote talent. Here’s why companies hire in these regions:

• India: Large talent pool in IT, engineering, and finance.
  
• Philippines: High English proficiency, strong customer service skills.
  
• Vietnam: Fast-growing tech sector with affordable talent.
  
• Indonesia: Emerging digital economy with diverse skillsets.
  
• Singapore: Regional business hub with finance and legal professionals.
  

Each country has its own legal requirements—another reason EORs are essential for smooth operations.

What About Intellectual Property and Data Security?

Some companies worry about protecting intellectual property (IP) when hiring overseas. A reputable EOR ensures that:

• IP rights are covered in local employment contracts.
  
• Confidentiality clauses meet local legal standards.
  
• Data handling complies with regional privacy laws (e.g., India’s DPDP Act or Singapore’s PDPA).
  

This gives businesses peace of mind, especially when employees handle sensitive or proprietary information.

How Do You Know If an EOR Is Right for You?

Hiring through an EOR is ideal when:

• You want to hire in a country where you don’t have a legal entity.
  
• You need to move quickly and can’t wait months for registration.
  
• You’re testing a market or building a small regional team.
  
• You want to avoid administrative burdens and legal risks.
  

If you plan long-term operations in one country, it may make sense to eventually establish an entity. But starting with an EOR offers a low-risk entry point.

Final Thoughts: Global Hiring Without Barriers

Hiring internationally no longer requires a maze of legal paperwork or costly entity setups. Through Employer of Record services, companies can hire top talent in Asia and beyond—quickly, legally, and efficiently.

From payroll to benefits to tax compliance, EORs make it possible to scale global teams without borders.

Team APAC provides EOR services across the Asia Pacific region. With a focus on compliance, local expertise, and personalized support, we help companies build strong, remote teams in countries like India, Vietnam, the Philippines, and beyond.

Whether you’re testing a market or planning regional expansion, we’re here to help you grow—without the red tape.

FAQs: Hiring Without a Local Entity

Can I transition from EOR to my own local entity later?
Yes. EOR providers often assist in smoothly transferring employees to your own entity once it’s established.

Can I hire contractors instead of using an EOR?
You can, but it increases the risk of worker misclassification. If you want more control and legal security, an EOR is the better choice.

Are EORs legal in all countries?
EOR solutions are legal and commonly used in most countries, though the structure may vary based on local labor laws.

How long does it take to start hiring through an EOR?
Typically 1–2 weeks from agreement to employee onboarding.

How do I choose the right EOR partner?
Look for transparency in fees, local compliance knowledge, responsive support, and positive client reviews.