Five years ago, if a Sydney-based SaaS company wanted to hire a developer in Manila, the conversation started with a lawyer. You would need a Philippine entity, a local registered agent, a tax identification number, a bank account denominated in pesos, and somewhere between $15,000 and $40,000 in setup costs before a single line of code got written.

That conversation has changed. Australian businesses, from funded startups to mid-market firms with 200 employees, are now hiring across the Philippines, India, Vietnam, and Singapore through Employer of Record platforms. No foreign entity. No local incorporation. No six-month legal runway.

The global EOR market is projected to grow from $5 billion in 2026 to nearly $20 billion by 2036, at a compounded annual growth rate of 14.8%. A meaningful share of that growth is coming from APAC, and Australian companies are driving a disproportionate chunk of the demand.

What an Employer of Record actually does

An EOR is a third-party company that legally employs your worker in another country on your behalf. The EOR holds the local employment contract, runs payroll, withholds taxes, administers statutory benefits, and handles compliance with local labour law. Your company manages the day-to-day work. The EOR manages the employment.

Think of it as outsourcing the legal employment wrapper without outsourcing the actual job. Your hire in Ho Chi Minh City reports to your product manager in Melbourne, joins your Slack workspace, and works on your roadmap. But on paper, they are employed by the EOR’s Vietnamese entity.

This matters because most countries require a local legal entity to employ someone. Without one, you are either incorporating (expensive, slow) or hiring through a contractor arrangement (fast, but increasingly risky).

Why Australian companies are turning to APAC

The short version: hiring a mid-level developer in Sydney costs north of AUD $130,000 once you add super and payroll tax. The same calibre of developer in the Philippines or Vietnam costs a fraction of that. India is similar. The salary gap is significant enough that even after you layer on EOR fees and employer contributions, the total cost of employment in Asia is typically 40% to 70% lower than hiring locally.

But cost is only part of the story. Australia’s tech talent shortage has been well documented and it is not getting better. Companies that cannot fill roles locally are looking to the timezone-adjacent markets in Southeast and South Asia where the talent supply is deep and the working hours overlap is manageable. A developer in Manila or Ho Chi Minh City shares most of the Australian working day. That matters more than most founders realise until they have tried managing someone twelve time zones away.

Singapore sits in a different category. It is not a cost play. Companies hire there for regional headquarters, compliance infrastructure, or access to ASEAN markets. The EOR fees are higher, but it removes the need for a Singapore subsidiary, which comes with its own incorporation costs and ongoing annual compliance overhead.

What it actually costs to hire through an EOR in Asia

You pay two things when you use an EOR. The first is a monthly management fee for the service itself, typically a few hundred dollars per employee per month depending on the provider. The second is the actual cost of employing your worker: their salary plus whatever the local government requires on top of it.

That second part is where most Australian businesses get surprised. Every country has its own mandatory employer contributions: social insurance, pension funds, health coverage, sometimes a compulsory 13th month salary. In most Asian markets, these add 10% to 25% on top of the gross salary you agreed with your hire. So a worker you are paying $24,000 a year might actually cost you closer to $30,000 once you add the statutory contributions and the EOR fee.

The other thing to watch is currency conversion. You are paying in AUD but salaries are owed in local currency. Some EOR providers charge a markup on the exchange rate, and over twelve months of payroll that adds up. It is worth asking about FX fees upfront, along with any charges for offboarding or early contract termination.

EOR vs. entity setup: where the break-even sits

The general rule is that an EOR makes financial sense when you have fewer than 10 to 15 employees in a single country. Below that headcount, the fixed costs of incorporation, ongoing compliance, local accounting, annual filings, and a registered office are disproportionately high relative to the EOR management fee.

Above 15 employees, the maths starts to shift. At $500 USD per month per employee, 15 people cost $90,000 per year in EOR fees alone. At that point, setting up your own entity in the Philippines or India and running payroll in-house (or through a local payroll provider) often becomes cheaper.

But cost is not the only variable. Speed matters too. An EOR can typically onboard an employee in 5 to 14 days. Entity incorporation in the Philippines takes 4 to 8 weeks. In India, it can take 8 to 12 weeks. In Vietnam, it commonly stretches to 3 to 4 months. For an Australian startup that just closed a Series A and needs to ship product, that speed difference is worth paying for.

The compliance risks Australian businesses need to watch

The biggest risk is not using an EOR. It is the alternative: hiring someone as a contractor when the relationship actually looks like employment. This is called worker misclassification, and tax authorities across Asia are getting better at catching it.

In the Philippines, the Department of Labor and Employment can reclassify a contractor as an employee if the worker uses your tools, follows your schedule, and reports to your managers. The penalties include back-payment of all statutory benefits, social contributions, and 13th month salary from the start of the engagement.

In India, the Employees’ Provident Fund Organisation has been increasingly scrutinising arrangements where “consultants” work full-time for a single client. In Vietnam, the Ministry of Labour regularly audits foreign companies with in-country workers who are not on local employment contracts.

Beyond misclassification, there are two other risks worth flagging. The first is permanent establishment. If your EOR arrangement is structured poorly, or if your Australian entity is making management decisions through employees based in another country, you could inadvertently trigger a taxable presence in that jurisdiction. This is a particular concern in India and Singapore. The second is IP assignment. If the employment contract between the EOR and your worker does not include proper intellectual property assignment clauses, you may not own the work product. Most reputable EOR providers handle this, but it is worth verifying in the contract before you sign.

How to choose the right EOR for APAC

Not all EOR providers are built the same, and the difference matters most in Asia where local employment law varies dramatically between countries.

The first question to ask is whether the provider owns its own legal entity in the country or uses a third-party partner. Providers that operate through their own entities typically offer faster onboarding, better control over compliance, and more direct access to local HR support. Providers that rely on in-country partners can sometimes add another layer of cost and communication friction.

For APAC specifically, Multiplier (headquartered in Singapore) has one of the strongest owned-entity networks across India, the Philippines, and Southeast Asia. Employment Hero, the Australian HRIS platform, has also built a competitive EOR product tailored to companies expanding from Australia and New Zealand into Asia. Independent comparison platforms like  Independent comparison platforms like Employsome review and score over 125 EOR providers across pricing, entity ownership, contract terms, and local support quality, which makes it easier to compare before committing.

The bottom line

The playbook for international hiring has changed. Australian businesses no longer need to choose between the expense and delay of foreign incorporation or the compliance risk of contractor arrangements. EOR platforms sit in the middle: compliant employment, fast onboarding, and a cost structure that makes sense for teams of 1 to 15 in a single market.

The APAC region is where most of this hiring is happening, and for good reason. The talent is deep, the time zones work, and the total cost of employment is a fraction of what it costs to hire locally. The key is doing it compliantly, and that starts with understanding the model before you sign anything.