EOR and PEO solve different problems. EOR lets you hire in a country where you have no entity — the EOR becomes the legal employer. PEO administers HR and payroll through your existing entity. If you don’t have a local entity, PEO is not an option. For most companies expanding into Asia, that means EOR is the right tool.
The Core Difference
| EOR | PEO | |
|---|---|---|
| Legal employer | The EOR company | Co-employment: both you and the PEO |
| Local entity required | No | Yes (in most cases) |
| Suitable for | Hiring without a local entity | Companies with an existing entity |
| Employment contract | Between EOR and employee | Between your company and employee |
| Liability | EOR bears statutory liability | Shared between you and PEO |
| Asia availability | Wide | Limited |
Employer of Record (EOR)
An EOR becomes the legal employer of record for your workers. The EOR:
- Signs the employment contract with the employee
- Runs local payroll and handles all statutory deductions
- Assumes statutory employment liability in that country
- Manages compliance with local labour law
- Bills you a monthly fee per employee
You direct the employee’s work — what they do, when, and how. The EOR handles everything administrative and legal.
The primary use case for EOR in Asia: hiring in Singapore, India, or the Philippines without incorporating locally. Entity setup in India or Japan can take 3–6 months and cost $15,000–$50,000+. EOR lets you start hiring in days.
Professional Employer Organisation (PEO)
A PEO enters into a co-employment arrangement with your company. The PEO:
- Administers payroll and benefits on your behalf
- Provides HR services — onboarding, compliance, benefits management
- Acts as employer for tax and benefits purposes only
You remain the primary employer. The employment relationship is with your company. The PEO is a service provider handling the administrative burden, not the legal employer.
The key requirement: in most cases, you need an existing legal entity in the country to use a PEO. The PEO co-employs your staff through your entity.
When to Use Each in Asia
Use EOR when:
- You want to hire in a country where you have no local entity
- You want to test a new Asia market before incorporating
- You have 1–10 employees in a given country
- Speed matters — EOR onboarding is days, entity setup is months
Use PEO when:
- You already have a legal entity in the country
- You have 20+ employees in a market and want to outsource HR administration
- You need benefits administration and HR services in addition to payroll
- You want to retain direct employment contracts with your staff
For most companies expanding into Asia, EOR is the right starting point. Entity setup in India, Indonesia, or Japan can take 3–6 months and cost $15,000–$50,000+. EOR lets you start hiring in days.
PEO Availability in Asia
PEO services are common in the US and Europe but significantly less available in Asia. Most of the largest Asia EOR providers — Deel, Remote, Multiplier — do not offer traditional PEO services. If you need co-employment through an existing entity in Asia, options are limited. Local HR outsourcing firms typically provide this service, not the global EOR platforms.
Cost Comparison
| Model | Typical Cost | What’s Included |
|---|---|---|
| EOR | $400–$650/mo per employee | Payroll, compliance, contracts, statutory contributions |
| PEO | 3–8% of total payroll or $150–$300/mo per employee | Payroll administration, HR services, benefits management |
EOR is more expensive per employee — but it includes the cost of maintaining a legal entity on your behalf. PEO is cheaper, but only after you’ve already invested in entity setup. The true cost comparison isn’t EOR vs PEO; it’s EOR vs (entity setup + PEO).
