High-Speed Market Entry – Malaysia

In the second addition of AYP’s Webinar Series, we discuss high-speed market entry into various countries in the ASEAN Region. Namely Singapore, Malaysia, Indonesia, the Philippines, Thailand and Vietnam. We discuss Professional Employer Organization (PEO) and Employer of Record (EOR), and how these two can be important factors into quickly and efficiently entering a market in any of the aforementioned countries. In this addition of AYP’s Webinar Series, we have experienced and esteemed in-house experts and consultants to guide you through the process and factors that affect high-speed market entry, and how you can use these to your company’s benefit.

In Malaysia’s addition of AYP’S high-speed market entry webinar, Zoe Phan was the speaker. As a Human Resource Consultant, Zoe has a plethora of experience and insightful information into AYP’s PEO clients and contractors, and is responsible for building strong rapport with them, which she has been doing so for two years. In the webinar, Zoe covers the PEO/EOR Process, scope of service, Malaysian contract types, labour laws and benefits, along with benefits and ROI of using a PEO Service.

Benefits of Using PEO/EOR: 

PEO/EOR Services allows your company to hire and connect with employees in other countries or regions, as well as reach new markets without the need of a physical entity in said region. The use of a PEO Service benefits both your company and employees alike, by providing your company with HR Services, Payroll and Benefits administration and Employer Compliance Assistance. On the other hand, it provides your employee with direct and compensation determination, as well as performance reviews. In short, a PEO service not only is cost-effective and efficient, it also reduces compliance risks.

Service Scope: 

When a company chooses to take on AYP’S PEO/EOR Services, AYP takes care of the company’s employment contracts, insurance coverage, on-boarding process for new employees, payroll process, HR Support and ensuring that the company is well updated on the local labour laws and regulations.

Malaysia’s Contract Types, Labour Laws, Employee Benefits & Work Permits:

In Malaysia, any employment lasting more than one month has to be formalised in a written contract. Either a fixed-term contract which expires after a set end date, or a permanent contract which has an indefinite duration and is either terminated by the employer or employee. They are both entitled to the same rights. A contract of employment must not contain any terms that restricts the rights of an employee. Employees who are under the Employment Act are either employees whose monthly wage is below RM 2,000 or manual workers whose monthly wage is above RM 2,000. On the other hand, non-employment act workers are governed by the terms of their own employees.

In Malaysia, the necessary components of a contract include a job title, compensation, working hours, termination notice period, confidentiality and conditions of overtime work, leave and benefits, probationary period and requirements to comply with company rules and penalties for misconduct. Pay rates vary on work days, rest days and public holidays. Leave entitlements of employees also depends on their number of years of service. Furthermore, termination and lay-off benefits also depends on the years of service provided before the employee was laid off. This is also pro-rated for any incomplete year.

It is necessary for Malaysian employers to make statutory contributions to the benefit of their employees. This includes the Employees Provident Fund (EPF), Social Security Organisation (SOCSO) and Employment Insurance System (EIS).

Success Stories/ROI:

The use of AYP’S PEO/EOR Services has provided a wide range of benefits for both employees and employers alike. For employers, they get efficient and fast market entry into a different country, along with the fact that this is incredibly cost-effective as well. HR and Payroll processes are provided and are ensured to be simple and straightforward to use. As for employees, the service provides them with a high level of support and covers insurance and employee benefits. It is also user-friendly and easy to adapt to. As we are constantly striving to improve ourselves, we also value and encourage customer feedback so that we can always work on improving the services we provide.

Our PEO/EOR Services have been used by clients in all different fields of work. It has benefitted over 300 firms in Malaysia, both local and foreign. Many clients also end up setting up their own entities after 1-2 years of partnering with us, while continuing to utilise our JuzTalent system.

Based on research done in 2019, the annual Return on Investment a company can achieve by utilising PEO/EOR Services is approximately 27.2% on cost savings alone. This includes savings in several HR-Related areas and the fact that this service can be provided without the need of any local entities to support this.

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