China Employer of Record (EOR) solutions have become increasingly popular in recent years as more and more foreign companies seek to expand their operations into the Chinese market. EOR is a service that allows these companies to hire and employ local talent without the complexities and legal hurdles associated with establishing a legal entity in China. In this article, we’ll explore the most frequently asked questions about China EOR solution to help businesses navigate this essential aspect of global expansion.
How foreign companies can hire employees in China through China EOR solution?
Foreign companies looking to hire employees in China can do so through EOR solutions if they have no legal entity established in China. This involves partnering with a reputable and licensed EOR service provider in China, who will serve as the legal employer for the local employees selected by the foreign company, handling all employment, compliance, payroll, and HR-related matters, while the local employees are managed and reported to the foreign companies directly. By using the China EOR solution, foreign companies can hire and onboard employees in China legally without setting up a legal entity in the country.
What kind of companies shall use a China Employer of Record to ensure employment compliance in China?
Any foreign company looking to hire employees in China can benefit from using a China EOR. However, it is particularly useful for:
- Startups and small businesses in China: Companies that are just entering the Chinese market or who would like to test the China market and lack the resources to establish a legal entity can quickly get started with an EOR in China.
- Companies with short-term projects: For businesses that have short-term projects in China, China EOR services provide flexibility in hiring and terminating employees without the long-term commitments.
Whether special qualifications are required to provide EOR service in China?
Yes, EOR service providers in China are required to obtain the necessary licenses and meet certain qualifications to operate legally. These qualifications include China talent dispatching license and China human resource agency license. It’s crucial to work with a qualified and established EOR service provider to ensure compliance and smooth operations.
What kind of services are included in the China EOR Solution?
China EOR solution typically encompass a wide range of services, including:
- Employment contract management.
- Payroll processing and tax compliance.
- Benefits administration: including statutory social benefits and supplementary insurances.
- Pay slips
- HR support and management.
- Legal compliance and regulatory adherence.
Pros and Cons of using a China Employer of Record Solution?
- Quick Market Entry: EOR solutions enable companies to enter the Chinese market rapidly.
- Compliance Assurance: These services ensure that all employment and tax regulations are followed.
- Flexibility: EOR allows for easier scaling up or down of your workforce.
- Reduced Administrative Burden: EOR providers handle HR tasks, leaving companies to focus on their core business.
- Limited Control: Companies have less control over HR policies and decisions compared to having their legal entity in China.
- Employee sense of belongings: most of the EOR employees in China are working remotely, which will influence their sense of belongings.
What is the cost of using an EOR in China?
The cost of using an EOR in China varies depending on the service provider and the specific services, location required. Below is the normal cost structure of using the Employer of Record solution in China.
How long is the term of the labor contract under the China employer of record hiring mode?
The term of the labor contract in China under EOR hiring can be flexible and depends on the agreement between the employer and employee. Typically, employment contracts in China are fixed-term, often for one to three years. However, they can be renewed or terminated according to the needs of the business.
How long does it take to onboard an employee through China EOR?
The onboarding process through China EOR is relatively quick. JSC usually onboard an employee within 1-2 weeks. This includes drafting employment contracts, handling paperwork, and setting up the necessary HR and payroll systems.
How long does it take to offboard an employee through China EOR?
Offboarding an employee through China EOR usually takes at least 30 days. This is because in China, the local law regulates that employee and employer shall give 30 days notice before termination. Once the termination request raised, the agency can start on handling the offboarding process. This includes handling termination paperwork, finalizing payroll, and ensuring compliance with labor laws.
Can I hire contractors or part-time employees through China EOR solutions?
Yes, EOR solutions in China can be used to hire independent contractors or part-time employees. The flexibility of EOR services allows companies to engage different types of employment arrangements as needed.
China EOR solutions provide a practical and compliant way for foreign companies to hire employees in China. They offer an efficient way to navigate the complexities of the Chinese labor market and ensure legal compliance. However, it’s essential to choose a reputable and licensed EOR service provider with expertise in Chinese labor laws and regulations to make the most of this solution. With the right partner in China, businesses can tap into the vast opportunities that China offers while minimizing risk and administrative burdens.
About JSC – China PEO & Employment Expert.
JSC is a professional service company that assists foreign-invested companies in doing businesses in China.
Our core services China PEO and employment solution enables foreign investors to hire employees in China without setting up any company which allow them to expand into China market in days, not months. Our in-country local experts are also experienced in assisting businesses to compliantly establish their own legal entity in China.
Please contact us if you require any other information on China PEO.