What is "Employer of Record (EOR) Services" for Overseas Expansion Support?
While Employer of Record (EOR) services were primarily used by multinational companies from Europe and the United States in the past, inquiries from Japanese companies have been increasing in recent years.
This is particularly due to the fact that large and medium-sized enterprises, small and medium-sized enterprises, and startups planning to expand overseas can conduct overseas test marketing without making a large initial investment.
In this article, we will explain the EOR services provided by JAC Outsourcing.
What is an Employer of Record (EOR) Service?
An Employer of Record (EOR) service allows you to "outsource employment overseas." This means you can hire employees in a foreign country without establishing a local legal entity like a corporation or representative office. EOR services handle the entire employment process, including recruitment, payroll, taxes, and compliance with local labor laws. This allows you to quickly hire local talent and focus on market research and preparing for your overseas expansion.
Issues Addressed by Employer of Record (EOR) Services During Overseas Expansion
Expanding overseas can be exciting, but also presents unique challenges. Here's how Employer of Record (EOR) services can help address some of the most common issues:
Business Planning:
・High Initial Costs: Setting up a local entity can be expensive. EORs eliminate the need for upfront investments, reducing the financial burden of overseas expansion.
・Uncertainty About Success: EORs allow you to test the market without a full-fledged establishment. This reduces risk and helps you make informed decisions.
・Withdrawal Costs: EORs offer flexibility. If you need to withdraw from the market, EORs minimise the financial impact of an exit strategy.
Legal and Compliance:
・Complex Foreign Laws: EORs possess expertise in local labor laws. In Indonesia, for example, they ensure compliance with company law, labor law, tax law, foreign investment law, and competition law.
・Back-Office Burden: EORs handle administrative tasks like payroll and taxes, freeing up your internal resources for core business activities.
Human Resources:
・Expatriate Deployment: EORs facilitate the recruitment and management of expatriate employees, even if you lack suitable internal candidates.
・Local Talent Acquisition: EORs provide guidance on local hiring practices, ensuring a smooth and compliant recruitment process for Indonesian employees.
Benefits of Employment Orientation Service (EOR)
| Reduced Administrative Burden | Spend time focusing on growth strategies instead of administration and save money on local subsidiary setup costs. |
| Rapid Recruitment of Top Talent | With over 20 years of experience and a proven track record in recruiting in Indonesia, we have a strong network of recruiting companies that can introduce you to the best talent. |
| Full Compliance with Legal Regulations | We guarantee full compliance with Indonesian laws and regulations. |
| Comprehensive Service Suite | We offer a wide range of support for your business needs, from business licenses, recruitment, hiring, payroll, work visas and taxes. |
| Premium Service | We are available to support you 24 hours a day, 365 days a year, to meet your unique business needs. |
JAC Outsourcing can support you even after you obtain your legal status, utilising the know-how we have accumulated over 20 years of experience. Our specialised consultants will provide you with the optimal solution tailored to your market strategy in Indonesia at the lowest possible cost.
Examples of Employment Orientation (EOR) Services
| Recruitment and Hiring | Over 20 years of cultivating our professional network allows you to recruit top talent and build high-performing specialised teams. |
| Employment Contract | Save time while creating employment contracts that guarantee the necessary conditions, protecting your top-tier company brand. |
| HR Processes | Our labor services aim to provide fair, on-time, and locally compliant salary payments to your employees. Calculations are done accurately and delivered within deadlines. |
| Income Tax Calculation | By utilising EOR, you don't need to stay updated on local tax regulations. EOR's expert guidance minimises the risk of non-compliance penalties. |
| Employee Insurance and Welfare Benefits | EOR seamlessly covers all mandatory employee insurance and benefits mandated by the Indonesian government, including social security, healthcare, pension, and religious bonuses. |
| Legal Support | Legal support is provided as part of our service, available at any stage of the contractual process to address your legal needs. |
JAC Outsourcing Service Flow
Our employment agent services are very similar to those offered by temporary staffing agencies in Japan.
| 1 | An employment agency contract will be concluded between your company and JAC Outsourcing. |
| 2 | JAC Outsourcing will directly hire local employees. |
| 3 | Local employees will perform the tasks you define, meeting your KPIs and reporting directly to your company. |
| 4 | JAC Outsourcing will handle all necessary HR services, including: |
The utmost priority of this service is to ensure compliance with laws and regulations and facilitate the safe and secure hiring of local employees. JAC Outsourcing will handle everything for you, including:
・Drafting employment contracts compliant with local laws in each country.
・Processing payroll calculations.
・Managing social insurance procedures.
Our team of experts, well-versed in local employment laws and working environments, provides support to minimise the risk of non-compliance and labor disputes.
Examples of Using Employment Agency Services
Case 1: Large, medium-sized, small, and medium-sized enterprises and startups planning overseas expansion
By hiring employees without making a significant initial investment, companies can gain insights into the local business environment and trade practices. This allows them to conduct thorough test marketing before making a decision to enter the overseas market.
Case 2: Establishment of a local subsidiary or representative office has been decided
Companies utilise this service to secure personnel with in-depth knowledge of the local market and sales channels in advance. This helps them prepare for rapid market development and customer acquisition. Even if the establishment of a local subsidiary or representative office has been decided, it takes a certain amount of time for the actual application, registration, and license registration. Therefore, companies can utilise employment outsourcing services during this period.
Case 3: Small-scale operation agency management
This service is also utilised by companies that already have agents in the local market but do not need to establish a representative office. They may feel uneasy about managing from Japan and want to have someone on the ground to provide support.
Case 4: Utilising overseas recruitment to find talent that is difficult to find in Japan
Companies can use this service to recruit talent with expertise in the Indonesian market, such as those who can speak Indonesian fluently and have the business skills to write and utilise the language effectively.
Case 5: Continuing employment of foreign nationals who were hired in Japan but returned to their home country
Case 6: Continuing employment of outstanding local employees after closing overseas bases
By utilising our EOR (Employer of Record) service, you can establish a solid foundation for your business by focusing on strategy execution without getting bogged down in administrative tasks, all while setting up a 1-2 year test market period.
Leveraging our outsourcing services enables you to mitigate unforeseen risks associated with changes in business, tax, and labor regulations, ensuring safe and secure company growth in full compliance with local requirements.
For more information, please don’t hesitate to contact us.
