Hire in Malaysia Without a Legal Entity: How Employer of Record (EOR) Services Help

Starting a legal entity in Malaysia can be a time-consuming and costly process. However, if your main goal is to hire Malaysian employees to support back-office, customer service, or remote operations such as digital marketing, software development, there’s a faster and more affordable option — using an Employer of Record (EOR) service in Malaysia.

This guide explains how EOR Malaysia works, its advantages, and what you should know before hiring employees in Malaysia without setting up a local company.

Key Considerations Before Hiring Employees in Malaysia:

Before hiring in Malaysia, it’s important to understand the Malaysian Employment Act 1955 (EA) — the primary law governing labor practices. It defines employee rights, employer responsibilities, and sets the minimum employment standards, including:

  • Working hours, overtime, and rest days
  • Wages and deductions
  • Employment termination procedures

As an employer, you’re also required to contribute to several statutory benefits:

  1. Employees Provident Fund (EPF)
    2. A mandatory retirement savings plan for private-sector employees in Malaysia. It provides long-term financial security and allows withdrawals for housing, education, and emergencies.
  2. Social Security Organization (SOCSO)
    3. Offers protection for work-related injuries, disabilities, and death benefits — ensuring medical and financial assistance for employees and their families.
  3. Employment Insurance System (EIS)
    4. Provides temporary financial support to employees who lose their jobs due to redundancy or retrenchment.
Managing all these statutory obligations can be complex for foreign companies — which is why many choose EOR services in Malaysia to simplify the process.

EOR in Malaysia

Methods to Hire in Malaysia Without a Local Entity

  1. Partnering with a Professional Employer Organization (PEO)
    2. A Professional Employer Organization (PEO) in Malaysia co-manages your HR and administrative functions. You retain control over day-to-day operations, while the PEO assists with payroll, benefits, and compliance.
    However, a PEO only co-manages employees, meaning you still share legal responsibilities. Large multinational firms sometimes face challenges like reduced employee engagement and data security risks when using PEO arrangements.

  2. Hiring Independent Contractors in Malaysia
    3. Independent contractors (freelancers) are self-employed professionals who provide services under a contract. They handle their own taxes and social contributions, giving you flexibility to hire specialized skills for short-term projects.
    While this method works for project-based or seasonal work, it’s harder to scale and offers less control compared to hiring through an Employer of Record in Malaysia.

  3. Employer of Record (EOR) Malaysia - The Fastest and Most Compliant Option
    4. An Employer of Record (EOR) in Malaysia is a third-party organization that legally employs workers on your behalf. Your employees work for you day-to-day, but the EOR manages all legal, payroll, and compliance matters. This is the most efficient and compliant way for global companies to hire employees in Malaysia without setting up a company.

Key Functions of an EOR in Malaysia

  • Employment Contracts: Drafts fully compliant contracts aligned with Malaysian labor law.
  • Payroll Management: Handles salary processing, tax deductions, and contributions.
  • Tax Filings: Ensures accurate, on-time submissions to Malaysian authorities.
  • Regulatory Compliance: Manages labor law adherence to prevent legal risks.
  • Social Contributions: Oversees EPF, SOCSO, and EIS contributions for all employees.


Why Choose EOR Services in Malaysia?

Using EOR Malaysia helps your business:
  • Hire faster — onboard employees within days instead of months.
  • Stay compliant — avoid complex local legal and tax setup.
  • Reduce costs — no need to incorporate or maintain a Malaysian entity.
  • Focus on growth — while the EOR handles HR, payroll, and compliance tasks.
With an EOR partner in Malaysia, you can scale your team quickly while keeping your business lean and compliant.


Start Hiring in Malaysia Today — Without a Legal Entity

Save time, reduce costs, and expand confidently with our Employer of Record (EOR) services in Malaysia.
We help foreign companies hire and manage Malaysian talent quickly and legally — so you can focus on your core business while we take care of HR, payroll, and compliance.


👉 Start getting your employees in Malaysia today!
Contact our local EOR experts in Malaysia to discuss your EOR needs.
Website: www.corfordasia.com
Email: jin@corfordasia.com