Strategically located in Southeast Asia with a population of 35.9 million and a projected 5% growth rate in 2025, Malaysia is fast emerging as a prime investment hub. In 2023, it recorded RM378.5 billion in approved investments, its highest to date.
With a common-law legal system, skilled English-speaking workforce, competitive costs, strong infrastructure, and available land for development, Malaysia offers an ideal environment for business expansion, especially compared to regional alternatives.
That said, hiring employees directly can be complex, requiring company registration, local compliance, and ongoing administrative work.
Using an EOR service in Malaysia allows businesses to onboard local talent without setting up a legal entity. The EOR acts as the legal employer, managing HR, payroll, and ensuring compliance with local labor and tax laws.
Key Benefits of Using an EOR Service in Malaysia
- Hire Local Talent Without Setting Up a Legal Entity
An employer of record Malaysia gives you access to qualified local talent without the need to establish a legal entity. The EOR manages employment contracts and handles the hiring process for foreign workers in compliance with local laws helping you scale globally with fewer barriers. - Ensure Full Compliance with Malaysian Regulations
By using an EOR service in Malaysia, you delegate the responsibility of staying compliant with local employment laws. This includes drafting legal contracts, managing employment terms, handling terminations, processing payroll, and ensuring timely tax submissions to the IRBM. - Reduce Legal and Financial Risks
An experienced employer of record helps you avoid common compliance pitfalls that could result in penalties or legal disputes. Employees also benefit from clear legal protections, proper tax withholdings, and access to insurance, statutory benefits, and compensation when required. - Control Costs While Expanding
With an EOR service Malaysia, you can manage employment costs more efficiently. EORs offer scalable solutions tailored to your business needs, helping you reduce overhead and avoid costly mistakes related to non-compliance. - Focus on Growth, Not Administration
Outsourcing HR functions like onboarding, payroll, and training to an employer of record Malaysia allows you to stay focused on your core operations. The EOR service in Malaysia handles daily workforce management while providing ongoing support for your employees.
How does EOR work in Malaysia?
- Recruitment Support
With Employer of Record Malaysia services, companies can streamline the hiring process without needing to establish a local entity. From job postings and screening to shortlisting and interview coordination, the EOR matches your requirements with top local and remote candidates. This accelerates recruitment while ensuring compliance with Malaysian hiring regulations. - HR Placement & Employment Contracts
EOR service providers help draft employment contracts in line with Malaysian labor laws. These contracts cover essential clauses including job roles, compensation, work hours, benefits, termination terms, and confidentiality. The Employer of Record Malaysia ensures every contract meets legal standards depending on employment type permanent, part-time, or contract-based. - Payroll & Statutory Benefits
Managing payroll in a new market can be complex. An EOR in Malaysia handles accurate monthly payroll processing, payslip generation, and salary disbursement. They also manage statutory contributions such as EPF, SOCSO, and EIS, while offering optional benefits like insurance or paid leave based on company needs. - Legal & Regulatory Compliance
The EOR ensures full compliance with Malaysian employment regulations, including the Employment Act and Industrial Relations Act. This includes proper handling of taxes, contributions, terminations, and other HR matters, minimising the risk of non-compliance or penalties. - HR & Admin Support
Powered by a fully-computerised HR management system, the Employer of Record Malaysia service helps track attendance, leave, claims, and employee records with precision. The EOR provides continuous HR support so you can focus on growing your business while they handle backend processes efficiently.
Key Factors to Consider When Choosing an Employer of Record in Malaysia
When selecting an Employer of Record Malaysia, choosing the right partner can enhance employee satisfaction and help you fully leverage the benefits of EOR services. Here are the essential factors to look for:
- In-Depth Local Knowledge
A reliable EOR service in Malaysia should have a strong understanding of Malaysian labor laws, immigration processes, tax regulations, and employee benefits. Their familiarity with local customs and business practices ensures smoother HR and payroll execution, while also helping you connect with the right local talent. - Proven Compliance Record
Check the EOR’s compliance history. Are they transparent in their operations, timely with updates, and experienced in managing responsibilities? Review their credentials, ensure there are no legal issues or past compliance breaches, and look for reliable social proof. A strong track record gives you peace of mind when outsourcing your compliance responsibilities. - Comprehensive Service Offerings
Every business has different needs, so assess the scope of services provided by the EOR. This includes payroll, benefits administration, HR integration, record-keeping, and compliance support. A good Employer of Record Malaysia will tailor their offerings to match your business requirements. - Technology and Tools
An ideal EOR should provide access to a robust HR platform that supports remote workforce management and global payroll. These tools should simplify onboarding, benefits administration, and ensure timely payroll processing—while staying compliant with Malaysian labor laws and deadlines. - Client Feedback and Reputation
Don’t overlook client reviews, testimonials, and references. Look for feedback from companies that have worked with the EOR in Malaysia. Their experience can give you insight into service quality, responsiveness, and overall satisfaction.
Challenges and Risks When Working with an Employer of Record in Malaysia
- Navigating Complex Malaysian Employment Laws
Malaysia’s labor laws, primarily governed by the Employment Act 1955, cover everything from payroll, working hours, and leave entitlements to benefits and tax filing. These regulations are shaped by economic conditions, employee rights, and social factors, making compliance a nuanced task. Balancing employee protection with business interests can be time-consuming and overwhelming. A reliable Employer of Record in Malaysia helps you manage this complexity efficiently, so you can focus on business growth rather than regulatory hurdles. - Choosing the Right EOR Partner
The wide range of available EOR service providers in Malaysia can make it difficult to choose the right fit. You’ll need to evaluate providers based on transparency, responsiveness, flexibility, and their understanding of your business needs. Define your goals, assess each provider’s global experience, service offerings, cost structures, and the strength of their HR technology. A well-informed comparison will help you select an EOR that aligns with your objectives. - Foreign Worker Recruitment Process in Malaysia
Hiring foreign talent in Malaysia involves strict procedures and government regulations. An EOR must be well-versed in the foreign worker recruitment process in Malaysia, ensuring compliance with immigration laws, work permit applications, and quota systems. Any misstep can delay onboarding or expose your business to legal risks. - Ensuring Data Privacy and Security
Working with an EOR means sharing sensitive employee data with a third party. It’s essential that the EOR complies with Malaysia’s Personal Data Protection Act 2010 and has strong data protection measures in place. The EOR should use secure platforms to manage HR data, safeguard intellectual property, and maintain confidentiality to minimize the risk of data breaches.
Frequently Asked Questions – Employer of Record Malaysia
What is an EOR?
An Employer of Record (EOR) is a third-party service that legally hires and manages employees on your behalf, while you handle their daily tasks.
How fast can I hire through an EOR in Malaysia?
Hiring can be completed within days, much faster than the typical 4–12 weeks, as the EOR already has a local setup and talent network.
What are the costs involved?
Costs usually include a setup fee, monthly service fee, deposit, and FX charges. You also cover employee salaries, taxes, and benefits.
Can I terminate employees via an EOR Malaysia?
Yes. The EOR handles terminations in line with Malaysian laws, including notice, severance, and documentation.
Do EORs provide employee benefits?
Yes. EORs manage both mandatory and optional benefits, helping you stay compliant and competitive.
Can an EOR handle visa and work permit applications?
Yes. An Employer of Record Malaysia can assist with visa and work permit processes for foreign hires, ensuring compliance.
Boost Your Business with a Reliable EOR Service in Malaysia
Looking to scale your team efficiently in Malaysia? INFINITY8 offers a reliable EOR service in Malaysia designed to simplify hiring, payroll, and HR operations, without the need to set up a legal entity. Trusted by over 968 companies and 132 global clients, including 12 listed companies, our EOR solutions provide end-to-end support for new headcount management, monthly payroll processing, salary disbursement, and statutory compliance.
Take advantage of our exclusive limited-time offer up to 50% off all HR services when you sign up during our promotional launch. Our transparent pricing starts from RM70 per employee/month for HR & payroll services, 18% of annual gross salary for recruitment, and only 15% of monthly salary for full EOR support. Whether you’re expanding into Malaysia or need local talent fast, INFINITY8 delivers scalable, compliant, and cost-effective solutions. Get started today or contact us for a FREE consultation.
