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Employer of Record in China
Discover how partnering with a China employer of record can simplify the hiring process and help you save on employment costs.
From $199/month per employee
Are you looking to hire employees in China without setting up a legal entity? A China Employer of Record provides a fast, compliant, and cost-effective hiring solution. In this guide, we’ll break down how China EOR services work, their advantages and challenges.
What is an Employer of Record in China?
A China EOR is a professional HR service that acts as the legal employer for a company’s China-based employees. By assuming full responsibility for payroll, benefits, and compliance with Chinese labor laws, a China EOR allows foreign businesses to legally hire and manage teams in China without establishing a local entity.
This arrangement helps global companies focus on core business operations while the EOR handles employment complexities such as tax filings, labor contracts, and regulatory compliance.
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- Hire employees in China with a China EOR
- No local entity is needed
- Pricing starts at USD 199 per employee
- Remote People can also help you find the best talent in China
Employers of Record are also referred to as China Professional Employer Organizations (PEOs). These organizations provide a range of employment services, such as payroll processing, benefits management, and ensuring compliance with Chinese labor regulations.
Additionally, Foreign Enterprise Service Companies (FESCOs) offer similar services by delivering end-to-end employment solutions for foreign companies entering the Chinese market.
By leveraging the services of a China EOR or FESCO, companies can:
- Ensure compliance with Chinese labor and tax regulations, reducing legal risks.
- Lower administrative burdens related to recruitment, payroll, and HR operations.
- Accelerate market entry by tapping into local knowledge and expertise.
- Maintain focus on core business activities while outsourcing employment challenges.
- Access full-service employment management, including payroll, benefits, and legal compliance.
Key China Market and Hiring Information
Why should global companies consider hiring in China? Despite challenges like weaker exports and a property market slowdown, China’s economy is projected to grow by 4.6% in 2025, following a 5% increase in GDP last year, according to the IMF. Urbanization continues to rise, with 64.9% of the population now living in cities. To support economic stability, the Chinese government aims to create 12 million urban jobs this year, maintaining last year’s achievement of 12.4 million.
This presents a unique opportunity for businesses to access a large pool of highly skilled, well-educated talent. With increased job creation and a strong workforce supply, it’s an ideal time to expand into the Chinese market. Partnering with a China Employer of Record (EOR) simplifies this process by ensuring compliance and efficient hiring.
Below is a snapshot of essential information to consider when hiring in China.
| Market Details for Hiring in China | Key Information |
|---|---|
| Capital City | Beijing |
| Payroll Frequency | Monthly |
| Currency | Chinese Yuan (CNY) & Renminbi (RMB) |
| Official Language | Mandarin Chinese |
| Approximate Population | 1.4 Billion |
| Average Work Week | 40 hours (Monday to Friday) |
| Minimum Wage | Varies by region, ranging from CNY 1,400 to CNY 2,500/month |
| Public Holidays | 7 to 10 days (depending on region, some spanning multiple days) |
| Social Security Contributions | Employer: 16-20%, Employee: 10.5% |
| Employment Contract Type | Written contracts required; probation period allowed |
| Termination Requirements | Written notice, severance based on years worked |
| Mandatory Employee Benefits | Health insurance, pension, unemployment insurance |
| Paid Annual Leave | 5 to 15 days, depending on length of service |
| Notice Period | 30 days for employee and employer |
| Severance Pay | 1 month’s salary for each year of service, capped at 12 months |
| Key Industries for Hiring | Technology, Manufacturing, Services, Retail |
How Does a China Employer of Record Service Work?
A China EOR service allows foreign companies to hire both local Chinese employees and foreign expats without establishing a legal entity in China. This solution simplifies hiring, payroll, and compliance with Chinese labor laws, making market entry faster and more efficient.
Chinese employees can work either on-site or remotely, while expats can be hired depending on visa requirements. The process involves a three-way agreement between the foreign company, the China Employer of Record, and the employee, ensuring seamless management of employment, payroll, and regulatory compliance.
Here’s how each party contributes to the arrangement:
The Employee
The China Employer of Record can directly hire employees seeking employment in China. If a company has not identified a candidate, many EORs also offer China recruitment services to help source qualified talent.
Once hired, the employee negotiates their contract terms (such as working hours, compensation, and benefits) with the client company. However, the formal employment contract is signed with the EOR, making the EOR the legal employer. The employee works exclusively for the client company, which oversees their daily tasks and responsibilities.
Meanwhile, the EOR handles payroll, benefits administration, and all other HR-related services.
The China Employer of Record
The China EOR serves as the legal employer, acting as the key link between the client company and the employee. The EOR holds the authority to contract employees who will work for its client.
Typically, the China EOR handles recruitment, onboarding, and payroll for the client company’s employees.
Once employed, the EOR manages payroll, benefits, tax deductions, compliance with social security programs, and leave schedules.
Additionally, any disputes between the client company and the employee can be mediated by the China EOR, ensuring smooth operations and legal compliance.
The Client Company
If a foreign company wants to hire Chinese employees, it can partner with a China Employer of Record. The company pays the EOR a management fee to handle HR responsibilities, including legal hiring and compliance services.
The client company transfers payments for salaries and mandatory employer contributions, such as social security programs, to the EOR. The EOR ensures accurate payroll processing and compliance with Chinese labor laws. While the client company negotiates contract terms and oversees daily operations, it delegates legal and administrative responsibilities to the China EOR, simplifying employment management.
How Does China Labor Law Affect Hiring Employees in China?
China Employer of Record (EOR) providers take full responsibility for ensuring compliance with Chinese labor laws. These regulations cover crucial areas such as employee rights, compensation, working hours, social security contributions, and termination procedures.
While the EOR manages legal compliance, it’s beneficial for client companies to understand these labor laws to better meet the expectations of their Chinese employees.
Contracts
Chinese labor laws require all employment contracts to clearly outline compensation (in CNY), working hours, job responsibilities, work location, and termination terms. These contracts are essential for ensuring transparency and protecting both employee and employer rights.
China EOR providers can only offer employment on a fixed-term basis, with a maximum contract length of two years. Additionally, all contracts must be executed in Chinese to comply with legal standards.
EORs are only allowed to hire workers on a fixed-term basis and the maximum a contract can last is two years. Contracts must be executed in Chinese.
Working Hours
In China, the standard work schedule consists of eight hours per day, five or six days a week, with a maximum of 40 hours per week. Overtime pay is legally required at a minimum rate of 150% of the regular salary. On rest days, employees receive 200% of their normal wages, while work on national holidays is compensated at 300%.
Although not legally mandated, it is common for Chinese employees to receive a 13th-month bonus as part of their annual compensation package.
Holidays and Paid Leave
Chinese labor laws grant all employees 11 national holidays annually. However, paid leave entitlement depends on the length of employment. New employees with less than one year of service are not eligible for paid leave.
Workers with one to five years of employment receive five days of paid leave per year. This increases to 10 days after five years and 15 days per year after 20 years of service.
Parental Leave
In China, mothers are entitled to 98 days of maternity leave for normal births, with additional days granted in cases of complications or multiple births. Instead of regular salary, mothers receive a maternity allowance, calculated based on the formula:
Average monthly salary for the previous year / 30 x maternity leave days.
Fathers are eligible for paternity leave ranging from 10 to 30 days, depending on the region, with 15 days being the average.
Employers in China are required to contribute between 30.8% and 42.8% of an employee’s gross salary to social security programs. These include pension, medical, unemployment, maternity, accident insurance, and a housing fund for residents. Employees are also required to contribute, with deductions ranging from 15.2% to 22.5% of their salary.
What Are the Benefits of a China Employer of Record Solution?
Expanding your team into China is full of opportunity, but it also comes with a maze of legal, tax, and administrative hurdles. That’s where a China Employer of Record (EOR) can be a game-changer. Instead of setting up a legal entity, dealing with complex local regulations, or risking non-compliance, you can partner with an EOR to make hiring simple, fast, and fully compliant.
A trusted China EOR acts as the legal employer on paper, but you still manage your team’s daily work. It’s a smart way to tap into China’s massive talent pool while avoiding the time, cost, and headaches of going it alone. Here’s a closer look at the major advantages:
| Benefits | Description |
|---|---|
| Quick and Cost-Effective Hiring | Enables you to hire employees in China quickly and cost-effectively compared to setting up a local entity or Wholly Foreign-Owned Enterprise (WFOE). |
| Compliance with Local Laws | Ensures full compliance with local labor and employment tax laws, reducing the risk of legal issues and penalties. |
| Employment Dispute Management | Handles any employment disputes that may arise with a China-based workforce, providing peace of mind and allowing you to focus on your core business activities. |
| Additional Employment Support | Is often able to support you with other China-related employment tasks such as managing work visas, sourcing talent in China, and providing local HR support. |
What Are the Downsides of a China Employer of Record Solution?
While a China Employer of Record can open a lot of doors for global businesses, it’s not always the perfect fit for every situation. Like any solution, it comes with a few trade-offs. Some companies may find that an EOR limits their flexibility, adds layers to communication, or isn’t as cost-effective for long-term operations compared to setting up their own entity.
It’s important to weigh the pros and cons carefully before deciding if an EOR matches your company’s goals, growth plans, and level of control you want over your operations in China. Here are a few potential downsides to keep in mind:
| Potential Disadvantages | Description |
|---|---|
| Expense When Hiring on a Large Scale | When hiring a large number of employees in China, the cumulative costs of using an EOR can become significant. In such cases, it may be more cost-effective to set up a local entity and outsource payroll functions directly. |
| Potential Confusion Among Employees | Employees might experience confusion regarding their true employer, as they are technically employed by the EOR but work for the client company. This can lead to misunderstandings about job responsibilities, benefits, and workplace policies. |
| Potential Sub-Contracting Issues | While the best EOR companies in China have their own entities within the country, some global EORs may subcontract to local EORs or Foreign Enterprise Service Companies (FESCOs). This can result in clients having to navigate multiple layers of middlemen, potentially complicating communication and service delivery. |
How to Choose a China Employer of Record Service
With so many EOR providers competing for attention in the Chinese market, picking the right partner isn’t always easy. Each EOR brings different strengths to the table, as some specialize in certain industries, others offer faster onboarding, while a few might shine in customer support or compliance expertise.
Choosing the wrong provider can lead to compliance risks, slow communication, or hidden costs down the line. That’s why it’s important to take your time and dig deeper before signing any agreements. Here are a few key factors to keep in mind as you evaluate your options:
Experience
Choose EOR providers with extensive experience operating in China. Their knowledge of local labor laws, compliance, and business culture can help prevent issues and attract top talent for your company.
Reputation
Research reviews and ratings to assess how professional the EOR is. Avoid providers with a history of treating employees unfairly or failing to comply with regulations.
Price
Request quotes from multiple EORs to compare pricing. Be cautious of hidden fees, as many companies advertise low starting prices but later include additional charges, increasing the overall cost.
Entity Ownership
Ensure that the EOR owns its local entities in China rather than subcontracting services to another company. Subcontracting can introduce confusion and increase the risk of mismanagement and errors.
Common Use Cases for a China EOR
Using a China EOR can be a game-changer for companies navigating the complexities of the Chinese market. Whether you’re testing the waters, building a remote team, or supporting a short-term project, an EOR offers the flexibility and local expertise you need to move quickly and stay compliant. Here are some key scenarios where a China EOR proves invaluable:
- Fast Market Entry
For businesses looking to quickly establish a presence in China, an EOR offers a streamlined solution. You can hire employees almost immediately, bypassing the lengthy and complex process of setting up a legal entity. This is ideal for companies testing the market before committing to a full-scale operation. - Hiring Local Talent Without a Local Entity
An EOR allows you to hire skilled Chinese employees while remaining fully compliant with local labor laws. This is particularly beneficial for businesses in tech, engineering, or manufacturing that want to avoid the high costs of setting up a branch or subsidiary. - Project-Based or Seasonal Needs
Companies with fluctuating workforce demands can benefit from an EOR’s flexible employment arrangements. You can quickly onboard and offboard employees based on project timelines, without the administrative burden of long-term contracts. - Sales and Business Development Teams
Expanding your sales or business development team in China is more efficient with an EOR managing payroll, benefits, and compliance. This allows your team to focus on building relationships and driving growth without operational distractions. - Managing Compliance Risks
Navigating China’s regulatory landscape can be challenging, particularly regarding employee benefits and social security. An experienced EOR mitigates compliance risks by handling all local labor requirements, reducing legal exposure. - Bridge to a Permanent Setup
Some companies use an EOR as a temporary solution while establishing a wholly-owned local entity. This allows you to start hiring and operations immediately, with a smooth transition once your permanent structure is in place.
These scenarios highlight how a China EOR can support your strategic goals while simplifying compliance, hiring, and administrative burdens in a new and competitive market.
How a China Employer of Record Supports Work Visas
Navigating the complex visa and work permit regulations is essential when expanding your business into China and hiring foreign employees. A China Employer of Record (EOR) can significantly simplify this process by acting as the legal employer and handling all administrative procedures on your behalf.
However, it is important to discuss specific requirements and limitations with the EOR beforehand, as many EORs in China are subject to government-imposed quotas on hiring foreign nationals.
How a China EOR Facilitates Work Visa Acquisition
The China EOR provider applies a Notification Letter of the Foreigner’s Work Permit to the relevant Chinese authorities. This involves preparing necessary documentation such as:
- Educational Qualifications
- Professional Experience
- Medical Examination Results
- Clean Criminal Record Certificate
Z Visa Application
Once the notification letter is approved, the EOR assists the employee in applying for a Z visa at a Chinese embassy or consulate in their home country. The Z visa is the standard work visa required for foreign nationals to work legally in China.
Residence Permit and Work Permit Issuance
Upon arrival in China with the Z visa, the EOR guides the employee through:
- Medical Examination: Conducted at an authorized hospital.
- Work Permit Application: The EOR applies for the Foreigner’s Work Permit.
- Residence Permit Conversion: The Z visa is converted into a Residence Permit, allowing long-term stay and employment in China.
What Are the Benefits of Using a China Employer of Record for Work Visas?
- Ensured Compliance: Staying updated with the latest immigration laws to meet all regulatory requirements.
- Time and Resource Efficiency: Handling the entire visa process to let you focus on core business activities.
- Streamlined Onboarding: Facilitating a smooth transition for the foreign employee into their new role.
- Risk Mitigation: Minimizing risks of legal penalties due to non-compliance with visa regulations.
By leveraging the expertise of a China EOR, companies can attract and retain international talent efficiently while focusing on strategic business objectives in the Chinese market.
Make Hiring in China Simple with Remote People
For the best deals on China EOR services, consider Remote People, which ensures optimal support and cost-efficiency for your expansion plans.
FREQUENTLY ASKED QUESTIONS (FAQs)
Yes. That’s one of the biggest benefits of using an EOR. A China EOR acts as the legal employer, allowing you to hire full-time employees without the need to establish a legal entity or navigate complex company registration processes.
In most cases, onboarding can be completed in a few days to a couple of weeks, depending on how quickly documentation and compliance checks are completed. An experienced EOR like Remote People streamlines the process to get your team started fast.
A China EOR typically manages employment contracts, payroll processing, benefits administration, tax filings, social insurance contributions, and compliance with Chinese labor laws, essentially covering all legal and HR responsibilities.
Generally, EORs can hire Chinese nationals on your behalf. Hiring foreign employees through an EOR may be more complex due to visa and work permit requirements, so it’s important to discuss your specific hiring needs with your provider.
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