Start with three facts: employer, direction and normal place of work
Do not begin by choosing a label such as EOR, outsourcing or dispatch. Identify who signs the employment contract, who directs daily work and where the person normally works. Those facts determine the mandatory rules, licences, payroll, insurance and tax processes.
Japan: client direction normally means licensed worker dispatch
- Japan has no standalone EOR licence. If the provider employs the person while the client directs daily work, the substance is worker dispatch and the provider needs a worker-dispatch licence.
- Accepting unlicensed dispatch, disguised contracting or dispatch beyond statutory limits can trigger Article 40-6 of the Worker Dispatch Act, under which the client may be deemed to have offered direct employment on the worker's existing terms.
- Establishment-level and individual-level three-year limits require active calendar and organisational-unit management.
South Korea: mandatory local protection can follow the normal workplace
Korea's Ministry of Employment and Labor explains that even where parties choose a governing law, that choice cannot remove mandatory protection of the country where the employee habitually works. The assessment looks at the workplace, who directs and pays, and who actually receives the labour. A foreign contracting entity alone does not take the relationship outside Korean labour law.
- Document wages, hours, holidays, leave and termination procedures clearly and administer them against Korean requirements.
- The Labor Standards Act generally applies to workplaces with five or more regular workers, while specified protections can also apply below that threshold.
- Confirm a foreign worker's status matches the actual role; do not treat the Employment Permit System for non-professional workers as interchangeable with professional work status.
- Foreign workers generally enter Korea's four social-insurance systems, subject to nationality, reciprocity and status-specific exceptions.
A procurement checklist for both markets
- Does the contracting entity itself hold every required dispatch or placement licence?
- Who gives daily instructions, and do the contract and operating reality match?
- Who owns payroll, withholding, social insurance and working-time records?
- Who verifies immigration status, and at what point before work starts?
- If personal data crosses borders, are purpose, scope, retention and access controls documented?
How TAC supports the two markets
In Japan, Tech Alliance株式会社 holds worker-dispatch licence 派13-318670 and fee-charging placement licence 13-ユ-317654, supporting recruitment, dispatch, temp-to-perm, payroll and HR administration. In Korea, TAC supports recruitment, executive search, talent mapping and delivery design with appropriate local specialists. We confirm the operating reality before defining the service.
This article provides general information, not legal or tax advice. Confirm contracts, immigration status, social insurance and tax treatment with qualified advisers in Japan or South Korea.