If you are expanding your reach to a different country and setting up outreach programs to harness local talent, there are certain dos and don’ts that you need to keep in mind. Avoiding common mistakes and following the best practices will ensure that you get smooth access to top local talent and don’t run into any regulatory issues.

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Global companies face many challenges as they begin and maintain operations in new countries. Language barriers, business customs, and hiring new employees are just a few of the hurdles. Managing costs, maintaining compliance, and having a clear view of the overall operations is an ongoing struggle for most companies. But what makes multinational companies unique is the desire to look beyond current operations and see what potential is ahead in unknown territories.

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The Asia-Pacific region consists of countries located along the Western Pacific Ocean. It is an umbrella term that includes East Asia, Southeast Asia, South Asia, and Oceania. Countries in the region feature well-developed corporate infrastructures, densely populated markets, and world-class technology.

With rapid GDP growth, Asia-Pacific economies are quickly outstripping the growth of western markets. For instance, China is now a top source of international direct investment in the world, while New Zealand, Singapore, and Hong Kong have secured the top three spots in World Bank’s Doing Business 2020 index.

This article covers the top 10 Asia-Pacific countries that are worth it for expanding your business. It is intended to provide an overview of each country’s most common employment law concerns and significant aspects that need to be kept in mind from a business perspective.

As soon as your company is set up in a new country and hires the very first employee, it becomes crucial to maintain certain records, including:

  • Personal details such as name, passport number, identity card, marital status, and address
  • Nature of employment
  • Designation in your company
  • Remuneration details
  • Period of employment
  • Non-cash and fringe benefits employees are entitled to

1.   Hong Kong

Hong Kong’s economy is well-known for its low tax rates and minimum government intervention. As it is heavily dependent on international trade, the country has become an attractive option for entrepreneurs, businesspeople, and fresh graduates.

The Employment Ordinance of Hong Kong covers full-time, part-time, and temporary employees. Here are some key aspects:

  • The employment contract is required to satisfy the minimum clauses of the Ordinance such as statutory holidays, sick and maternity leaves, mandatory provident fund payments, and severance and long-service payments.
  • The Ordinance does not specify a legal probationary period limit. However, Hong Kong’s Labor Department suggests a maximum duration of three months.
  • When hiring a new worker, your firm must inform the Inland Revenue Department within six months.
  • Businesses need to report remuneration given to employees on an annual basis.

2.   New Zealand

Other than its breathtaking landscapes, New Zealand is also known for its high-income and progressive economy. The country has become rapidly industrialized in the past few years, within the information technology, banking, and other service sectors.

New Zealand has emerged as the very top of World Bank’s Doing Business 2020 rankings, which implies that the government regulations substantially facilitate operations for companies seeking to expand to New Zealand. Here are some key employment concerns you need to keep in mind:

  • It is mandatory to have employment contracts for each employee that clearly states the responsibilities of employers and employees.
  • A regular working week in New Zealand comprises 40 hours and is divided into five working days.
  • Income taxes are typically withheld by the company and paid to the Inland Revenue on a Pay-As-You-Earn (PAYE) basis.
  • Workers in New Zealand can avail themselves of a four-week paid leave every year. The leave period can be provided gradually throughout the year, or allocated annually on the anniversary of an employee joining your organization.

3.   Singapore

Singapore has emerged as a rapidly progressing technological and financial hub in the Asia-Pacific region. Due to its free market economy and policies conducive for trade, the country has become one of the easiest places to operate a business, for both local and foreign companies.

Some of the largest industries in Singapore include finance, business, manufacturing, and tech exports. Here is what companies in Singapore need to know when hiring staff for the first time:

  • The Employment Act contains the basic rules about employment terms and the roles and responsibilities of the employers and employees.
  • Employees can work for a maximum of 44 hours a week (or 8 hours a day).
  • Salaries must be paid to employees at least once a month within seven days following the end of the salary period.
  • Employees are entitled to paid annual leave if they have worked with a company for a minimum of three months.
  • The legal age for employment in Singapore is 17 years and above. Children between 13 and 16 years can be employed, but there are limits on the type of work they are allowed to do.

4.   Australia

The presence of natural resources along with a favorable climate make Australia a great place to invest. It has the advantage of an open-market economy with bare minimum restrictions on the flow of goods and services.

Australia has a well-educated workforce benefiting any business. The education system in the country is internationally recognized and specialized training services are available for further skills development. Here are some employment law concerns that you need to know about when expanding to Australia:

  • The primary sources of employment law in the country are legislation, industrial instruments, and common law.
  • Full-time employees in Australia are allowed to work for a maximum of 38 hours per week.
  • The number of public holidays granted depends on the state where your company operates.
  • Both full-time and part-time employees are entitled to 4 weeks of paid annual leave, but it is common to avail six weeks.
  • Employees in Australia are eligible for up to 12 months of unpaid maternity leave for childbirth or adoption of a child under 16.

5.   Taiwan

Taiwan has witnessed rapid economic growth ever since the second half of the past century. Its main income is derived from the industrial manufacturing sector, especially by exports of machinery, electronics, and petrochemicals.

In the recent past, several government-owned banks and industrial businesses in Taiwan were privatized, which encouraged many businesses to relocate there. Here are general employment considerations to keep in mind when considering expansion to Taiwan:

  • Employment laws are generally contained in Taiwan’s Labor Standards Act (TSA) by the Ministry of Labor.
  • Working hours for employees in Taiwan are limited to 40 hours per week (8 hours per day).
  • Workers are entitled to two off days out of every seven. One rest day is mandatory, while the employees can choose to work overtime during the other.
  • Salaries to workers are usually paid monthly. Like in most Asian countries, workers are entitled to a 13th month bonus of a month’s wages, which is usually given out at the time of the Lunar New Year.
  • Notice periods for termination depend on the period of service. It begins from 10 days for those with a minimum of three months of service, increases to 20 days after a year, and rises up to 30 days after three years.

6.   South Korea

South Korea is known to have rapidly developed since the 20th century. It has emerged into a globally connected and technologically advanced country due to effective state-led urbanization projects.

A notable reason for South Korea’s success is heavy government investment towards education, which propelled the country as a technological hub with a skilled workforce. If South Korea is your dream destination for investment, consider the following aspects while planning your venture:

  • According to law, employees in businesses with 50 or more permanent workers are not permitted to work more than 52 hours a week.
  • A termination notice to a worker in South Korea must be served at least 30 days in advance.
  • It is mandatory for companies in South Korea to register their employees for payroll by the 15th day of the initial month of operations.
  • Employers are supposed to withhold income tax when giving out salaries to workers.
  • Paid leave is provided to employees based on the period of service. Employees get one day per month worked in their first year, which increases to 15 days per year from the second year. After that, one day of annual entitlement is added every two years of service.

7.   Japan

Japan is home to the third-largest economy in the world, after the US and China. It features an advanced marketplace and a robust work ethic across all sectors.

Some of the largest brands around the world, such as Honda, Toyota, Nissan, and Sony were founded in Japan, strengthening its place as a hub for those interested in a career in tech, business, or media. If you wish to expand to Japan, here are some of the important employment law concerns to consider:

  • Japan’s Labor Standards Laws contain the crux of the employment rules and regulations in the country.
  • Employment contracts are renewed yearly. However, fixed-term contracts of more than three years are not allowed.
  • Employees are legally permitted to work 40 hours a week.
  • Salaries are generally given out to employees near the 25th of each month. They can either be paid directly or transferred to the employee’s bank account.
  • Workers are entitled to paid leave after six months of service, with the leaves increasing every 12 months thereafter.

8.   Malaysia

Malaysia’s multi-cultural and multi-ethnic culture can be a big advantage if you are planning to expand your business to the country. The country initially had a state-oriented economic structure, which helped it become one of the most competitive markets in the world today.

Business, tourism, tech, manufacturing, and healthcare services are some of the most prosperous sectors in Malaysia. Starting out as an employer in Malaysia, here are some of the important aspects to take into account:

  • Employment and labor laws of Malaysia are enshrined in the Employment Act 1955.
  • Maximum working week in the country is 48-hours long and divided into six eight-hour days.
  • For employees with less than two years of service, the termination notice period must be four weeks, increasing to six weeks at two years and eight weeks at five years.
  • Businesses in Malaysia are required to withhold income tax payments from workers as per a Pay-As-You-Earn (PAYE) system.
  • Employees in Malaysia are entitled to 11 public holidays every year.

9.   Thailand

Thailand is known for its pristine beaches, scenic islands, and majestic temples. In recent years, the country’s economy has progressed rapidly, making it more than just a fancy tourist spot.

Thailand has a free-market system and pro-investment policies, which makes it easy for foreign companies to move there. Here are some of the common employment law concerns you must know about:

  • There is a legal requirement for drawing up written employment contracts in Thailand, but they are still highly recommended.
  • Employees are required to work 8 hours a day from Monday to Friday. However, some businesses also work half-days on Saturdays.
  • Thai workers are usually paid monthly, either directly in cash or by bank transfer.
  • While it is not mandatory, employees generally expect a 30-day notice period in case of termination.
  • Minimum leave entitlement in Thailand is six working days in a year after the initial year of service, but it is common for companies to offer 10-15 days.

10.                 Indonesia

Not only is Indonesia the world’s largest island country, it also has the largest economy in Southeast Asia. It is a mixed economy, with both, a government-led public sector and private businesses playing an important role in economic progress.

Indonesia has a large population, providing you with a big market for your products or services. If you want to relocate to Indonesia, here are some employment law concerns to keep in mind:

  • Workers are supposed to work no more than 40 hours each week.
  • There is no national minimum wage in Indonesia. Minimum wage requirements are different in every province.
  • Collective bargaining is becoming popular, so having discussions with trade unions is becoming important when it comes to wage discussions.
  • Employees who have worked with a company for a full year are usually entitled to a bonus (religious allowance). This is equal to a month’s salary and must be paid at least a week prior to the Eid-ul-Fitr public holiday.
  • Notice period in case of termination of an employee is usually 30 days.

Final Thoughts

The Asia-Pacific region presents a wide range of opportunities for startups, entrepreneurs, and established companies. It is popular for its fast-growing economies and technological advancements. Moreover, these countries are generally heavily populated, providing massive markets for your products and services. For further insight on expanding to different markets around the globe, click here to explore our website.

The Labor Law in France covers all issues related to employment, labor laws, and regulations. The terms and conditions of employment are clearly stated. The law also ensures employee representation and talks about discrimination, maternal and family leaves, as well as rights of all workers. There are a total of 35 jurisdictions focused on labor law in France.

Here are some of the recent changes to French labor laws:

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Implementing payroll in new countries is not easy. In-country regulations, compliance, ensuring statutory requirements are met is just the beginning. One of my recent clients came to Blue Marble with several challenges and needs for their global payroll. Some of the biggest issues for them were lack of visibility across all countries, and local in-country compliance concerns.

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China, the world’s second-largest economy with an estimated GDP of 14.5 trillion dollars, is one of the first places foreign investors look when considering expanding their enterprise. With low-cost labor, a substantial domestic market (given its enormous population), and strategic geographical location, China is a global economic powerhouse with an unparalleled manufacturing sector. Read more about Payroll Compliance in China.

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Singapore has a well-developed market, skilled workforce, and a robust corporate infrastructure that makes it an excellent place to expand your business. According to the World Bank, Singapore is the second easiest nation in which to conduct business (after New Zealand).

The business climate of Singapore has its foundation set in globalization, focusing on the principles of quality, reliability, productivity, and integrity. It is vital to gain basic knowledge of the local laws and regulations if you wish to form a company in Singapore. Here is a breakdown of the country’s corporate compliance requirements and the challenges associated with them:

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If you have employees in multiple countries, you know global payroll is not easy. So many factors go into managing payroll – local in-country regulations, tax and filing deadlines, statutory requirements – the list goes on. What are the key factors to successful, compliant payroll across all countries? Here are some of the top priorities for global payroll to consider:

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Multinational companies have faced many challenges over the last year. Now that the new year has begun, it’s time to look at your global payroll and identify ways to simplify the process. With new in-country regulations due to COVID, new Brexit rules, and furlough schemes in each country, payroll has gotten more complicated. How can you make sure you’re getting the most out of your global payroll in 2021 and stay ahead of new changes?

Technology

Each country has made adaptations to daily work life due to different government lockdowns and social distancing protocols. Some offices are fully remote, some are working with 50% capacity each day, and some have laid off or furloughed employees due to business conditions. Using technology to communicate and manage daily operations is a must have in this environment.

Platform

Using one platform to manage your employees across the globe is the gold standard in global payroll. Your payroll technology should have one login to manage employees in every country, provide automated updates, customized reporting across all countries and currencies, and real-time access to your payroll costs across the organization. If your payroll process isn’t running smoothly, your technology could be the problem. Having the right software that works for you is the key to simplifying payroll, reducing errors, and ensuring compliance in each country.

Expertise

One other aspect of global payroll is in-country expertise. What happens if you have a question about your payroll in India? What if the rules in India have changed and you didn’t know? Having direct access to in-country experts is another step in the right direction. You shouldn’t have to wait a week (or 2) to hear back on a simple payroll-related question. If you don’t have direct access to your payroll experts in each country, you’re missing out.

Blue Marble has taken the stress out of paying employees internationally. Our cloud-based technology is easy to use, provides customized monthly reporting across all countries and currencies, automatically updates with new payroll regulations in each country, and we provide a unique-to-the-industry hybrid service model so you have a US-based team and direct access to payroll experts in each country when questions come up. How simple can it be? Talk to us today to find out! 

2020 certainly turned the world upside down and forced organizations to make significant changes to their operations. In recent conversations with my clients, I’ve seen both sides of the spectrum. Some have scaled back operations, while others embraced expansion as employees worked entirely remote. Global Expansion in 2021 will been different, but is still possible.

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