Employer of Record (EOR) vs Agent of Record (AOR): A Guide for Singapore SMEs

Hiring across borders used to be reserved for large corporations. Today, even small and medium-sized businesses in Singapore are expanding regionally, engaging remote talent, or setting up overseas operations, which requires careful management of payroll, compliance, and accounting services.

As you grow, you might come across two terms: Agent of Record (AOR) and Employer of Record (EOR). While they sound similar, they serve very different purposes, and choosing the right one depends on what your business needs.

Here’s a clear, no-fluff breakdown of AOR vs EOR, and how to decide which is the better fit for your situation.

What Is an Employer of Record (EOR)?

An Employer of Record is a third party that legally employs someone on your behalf. Your company directs the person’s work, but the EOR handles everything that comes with being the official employer, such as:

• Drafting and issuing the employment contract
  
• Running payroll
  
• Making CPF contributions (in Singapore) or local equivalents abroad
  
• Handling tax filings and statutory deductions
  
• Managing leave, benefits, and HR compliance
  
• Applying for work passes (where permitted)
  

In Singapore, using an EOR is common when a business:

• Wants to hire quickly without setting up a legal entity
  
• Needs to stay compliant with MOM and IRAS rules
  
• Is bringing on a local or foreign employee for a limited-term project
  
• Wants to outsource payroll, tax, and HR compliance
  

Key point: The EOR is the legal employer. You get the team; they handle the admin and legal obligations.

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What Is an Agent of Record (AOR)?

An Agent of Record is different. They don’t employ anyone — instead, they act as a legal intermediary that handles certain employer-related functions, usually for independent contractors or freelancers.

AOR services may include:

• Drafting compliant contracts with contractors
  
• Ensuring proper invoicing and payment processes
  
• Withholding taxes (if applicable)
  
• Verifying legal status or work eligibility
  
• Managing contractor documentation for audits
  

AORs are useful when:

• You’re hiring contractors, not employees
  
• You want to stay compliant without turning contractors into full-time staff
  
• You need to engage contractors across different jurisdictions
  

Key point: With an AOR, the contractor remains self-employed. You get help with compliance, but you are not outsourcing legal employment.

AOR vs EOR: The Key Differences

Which One Is Right for Your Business?

Ask yourself these questions:

1. Are you hiring an employee or a contractor?

• Employee → EOR
  
• Contractor → AOR
  

2. Do you need someone on payroll, with CPF and benefits?

• Yes → EOR
  
• No, just project-based → AOR
  

3. Are you hiring locally in Singapore or overseas?

• Hiring Singapore citizens/PRs → EOR can help with compliance
  
• Hiring overseas contractors → AOR may be more appropriate
  

4. Do you have a local entity in the country where the worker is based?

• No entity, but need full-time support → EOR
  
• No entity, but only need freelance help → AOR
  

Summary

Understanding the difference between AOR and EOR can help you avoid compliance pitfalls and choose a structure that suits your growth strategy. For Singapore SMEs expanding regionally, hiring remote talent, or engaging freelance professionals, getting this right from the start saves you time, cost, and potential penalties.

The best choice comes down to your employment relationship, level of control, and local legal requirements — all of which tie closely to areas like payroll, tax filing, CPF compliance, and labour law.

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Here are some articles you might find helpful:

What Singapore SMEs Should Know About the Johor–Singapore Special Economic Zone (JS-SEZ)

Employer of Record in Singapore: How to Hire Employees Without Setting Up a Company

Maternity Leave in Singapore: 2025 Guide for Small Business Owners