​ What is EOR/GEO (Employer of Record) (Outsourcing/Staffing)?

Agenda 

1. What is GEO/EOR (Employer of Record) (Outsourcing/Staffing) service?

2. What kind of companies should use GEO/EOR (Outsourcing/Staffing) services?

3. What are the advantages of using EOR/GEO (Outsourcing/Staffing) when expanding into Vietnam?  

4. JOB LINKS’s Main services

 

EOR = Employer of Record

GEO = Global Employment Organization

The basic structure of both EOR and GEO (Outsourcing/Staffing) is the same.

Generally, in order for a company to employ human resources in a country where it has expanded overseas, it is necessary to establish a local entity and to employ people in accordance with the laws (employment and labor laws) of that country.

In this case, there are various options for establishing a local entity, such as a branch office, representative office, or corporation. However, the procedures and costs for establishing a entity depend on the local laws, and in some cases, the time and costs for establishing the entity can be huge before it can function as a local entity.

In addition, the management of the new entity will require the employment of an administrative staff. In addition, many companies are not able to achieve the expected business development due to more workloads and risks than expected.

However, by utilizing the EOR/GEO (Employer of Record) (Outsourcing/Staffing) service provided by JOB LINKS, it is possible to start a business while minimizing the risks.

Using the EOR/GEO (Employer of Record) (Outsourcing/Staffing) service provided by JOB LINKS in Vietnam as an example, we will explain what advantages EOR/GEO (Employer of Record) (Outsourcing/Staffing) has for companies and how they should utilize it.

JOB LINKS contracts with local human resources (both local and foreigners) on behalf of companies seeking to expand overseas, and handles personnel and labor affairs, payroll, and tax processing as an employer. Companies seeking to expand overseas can hire human resources without establishing the entity in Vietnam, and can start their business with minimal cost, time, and risk.

Although JOB LINKS contracts the contract of employment with local human resources in Vietnam, the company seeking to expand its business overseas can in practice give orders, evaluate human resources, and make business policies regarding actual operations to the local human resources. There is no need to share information obtained in the process of business with us.

 

Do you have any of the following concerns when expanding into Vietnam?

Cost: The costs of setting up a business in Vietnam (establishment costs, accounting, rent, etc.) are high.

Risk: Not being familiar with local laws (employment, labor) in Vietnam, and the need for closing or clearance in case the business does not succeed.

Time: Want to start business as soon as possible, but it takes a long time to set up a local entity in Vietnam and make it functional.

JOB LINKS' EOR/GEO (Employer of Record) (Outsourcing/Staffing) service can be one solution to the above concerns of companies seeking to expand their business in Vietnam.

In general, EOR/GEO (Employer of Record) (Outsourcing/Staffing) services can be utilized in the following six ways.

2.1. Acquiring talented human resources from a global perspective

"Global remote work" has become the new normal, triggered by the global pandemic. EOR (Outsourcing/Staffing) makes it possible to hire talented human resources in countries where your company does not have the local entity. You can hire the human resources you need for your company as soon as possible, regardless of country or location.

 

2.2. Trial Expansion

In the case of establishing the local entity, in the case that the business does not succeed, it will be necessary to close the entity and clearance the company. The clearance process often takes a long time, and the risk of additional tax penalties is not low. EOR (Outsourcing/Staffing) can be used to hire local staff in Vietnam who can conduct their own marketing, market research, and search for suppliers and distributors in advance of starting local operations. After identifying the demand and business potential, you can make a decision to establish the local entity.

 

2.3. Utilization until the completion of establishment the entity.

Establishing the entity in Vietnam can take a long time. If you are planning to establish a corporation, representative office, or branch office in Vietnam, but want to start business as soon as possible before you miss a business opportunity, you can use EOR (Outsourcing/Staffing) to hire human resources in Vietnam until you establish the entity in Vietnam.

 

2.4. Trial for "foreign technical intern trainee" after their return to Vietnam

As of the end of June 2023, approximately 350,000 foreign technical intern trainees were residing in Japan under the foreign technical intern training system. Under the this system, they enter into an employment relationship with a company, sole proprietor, or other training provider in Japan to acquire skills that are difficult to acquire in their home country, based on a technical internship plan for a period of up to five years. Although the number of Vietnamese trainees temporarily decreased due to the pandemic, as of June 2023 there were approximately 200,000, the largest number among the 15 countries that dispatch technical intern trainees to Japan, accounting for 58% of the total number of foreign technical intern trainees residing in Japan. There are many cases where a Japanese company establishes the local entity in Vietnam after a trainee completes their technical internship in Japan, because they were an talented human resource, with connections and expectations in the local market. However, they do not have the skills in human resource management, payroll, and back-office operations in Vietnam. In addition, there are cases where, against expectations, after establishing the local entity, the management of the company is not as expected and the company has no choice to close the entity. When they return to Vietnam, they can reduce compliance risks by using EOR (Outsourcing/Staffing) and outsourcing HR and back-office operations (such as payroll calculation) to JOB LINKS, which has more than 15 years of experience in HR outsourcing in Vietnam.

 

2.5. A new way of working that does not interrupt your career

When accompanying a husband or wife who is going to work overseas, a life change will occur. In most cases, this would normally result in a career interruption due to family reasons that originate from the employee's own family. However, by utilizing EOR (Outsourcing/Staffing), you can continue working in your home country from your destination without career interruption. Not only the OR option of "family" or "work," but also the AND option of "family" and "work" can be taken.

 

2.6. Continuing employment after closing the local entity

When a company has no choice but to close its bases in Vietnam, it will not be able to hire the talented staff it had hired in Vietnam. However, by utilizing EOR (Outsourcing/Staffing) and employing them at our local JOB LINKS subsidiary in Vietnam on behalf of your company, you will be able to continue to employ talented staff

 

There are four major advantages to utilizing EOR/GEO (Outsourcing/Staffing) in Vietnam.

3.1. Minimize costs to enter the market

By utilizing EOR/GEO (Employer of Record) (Outsourcing/Staffing) services, you can start business in Vietnam without establishing a corporation, branch, or representative office. EOR/GEO (Employer of Record) (Outsourcing/Staffing) services are available for companies that are seeking to start business in Vietnam without establishing a corporation, branch office, or representative office. The cost of establishing the entity can be significantly reduced. In addition, office rent, accounting audit fees, taxes, and other costs associated with establishing the local entity are no longer necessary, making it possible to expand overseas to Vietnam at minimal cost.

 

3.2.  Expanding into Vietnam with minimal risk

Establishing the local entity in Vietnam offers great potential and returns, but it also involves a certain level of risk. Many companies may need to earn foreign currency in considering the company's results, but may not be willing to take the risks that may be involved in expanding overseas. If the company establishes the local entity in Vietnam but the business does not succeed, the option of closing the corporation, branch office, or representative office may arise. However, closing a business in Vietnam will require clearance work in Vietnam, which is said to take 1.5 to 2 years. In addition, there are many cases where additional tax penalties are imposed due to tax investigations by the tax authorities. However, by utilizing EOR(Outsourcing/Staffing), there is no need for clearance operations for closing the entity, and you do not have to worry about and take unnecessary risks outside of your main business.

 

3.3. Expansion can be done in a minimal amount of time

It takes several months to a year to decide whether to start a business, and at least six months to a year to establish the local entity in Vietnam. However, we understand that some companies cannot wait one to two years to start business in the rapidly changing Southeast Asian market. With EOR (Outsourcing/Staffing), you can start your business in Vietnam in as little as one month (if you have decided on the local human resources you want to hire), allowing you to enter the rapidly changing Southeast Asian market in a minimal amount of time without losing business opportunities. If you have not yet found the staff you need, we and our local partners will work together to support you and assist you in recruiting both local and foreign staff, and we will assist you in recruiting both local and Japanese staff.

 

3.4. Can grow your organization

By switching from outsourcing or freelance contracts to our EOR (Outsourcing/Staffing) - employment contracts, employees can enjoy the benefits and other benefits provided by the client, and can expect to improve their sense of belonging to the company and their individual performance.  ​

 

4.1. Employment

At first, JOB LINKS will contract the EOR (Outsourcing/Staffing) service agreement between JOB LINKS and the Client. Then, JOB LINKS will conclude an employment contract in accordance with Vietnamese law between the client and JOB LINKS and the candidate whom the client would like to hire locally in Vietnam (The template of employment contract can be prepared by JOB LINKS). The company can give you the practical direction and orders related to the actual work.

 

4.2. Human resources

We can hire local or foreign staff. If you have not yet decided which local staff you would like to hire, please contact us. We and our local partners will work together to help you hire the people you want to hire locally.

 

4.3. Payroll management

Each month, our professional team will calculate social security contributions, taxes, and salaries for locally hired employees. We also ensure that the monthly payroll schedule is complied with and that salaries are paid to the local staff.

 

4.4. Labor and human resource management

Entering and leaving a company requires complicated procedures for joining and leaving social insurance, as well as the clearance of personal income tax. We specialize in HR outsourcing and have over 15 years of experience in this field.

 

 

Contact

If you have any questions, please feel free to ask.

Kazuki Okura (Mr) :   kazuki.okura@joblinks.com.vn