For foreign companies hiring employee in China, the official 2026 China national holiday schedule (China public holiday) has been released. Employers should take note of these statutory holidays in China to plan operations, staffing, and payroll smoothly throughout the year in China.

China’s public holidays include New Year’s Day, Spring Festival, Tomb-Sweeping Day, Labor Day, Dragon Boat Festival, Mid-Autumn Festival, and National Day. During these periods, employees in China are entitled to time off according to national regulations. The government also designates certain weekends as adjusted working days to balance long holiday breaks—these adjusted workdays are compulsory normal working days.

Please refer to the below picture for the exact dates of each holiday and the corresponding adjusted working days in 2026.

China has revised “National Public Holidays and Commemorative Days Holiday Policy” in November 2024, starting from January 1, 2025, all citizens will have an additional 2 days off. This includes 1 additional day for both the Spring Festival (Chinese New Year) and Labor Day.

Accordingly, the holiday and adjustment principles have been further optimized and improved. Except in special circumstances, the Spring Festival holiday will begin on the eve of the lunar New Year and last for 8 days; the National Day holiday will last for 7 days starting from October 1; Labor Day will be 5 days off; the New Year’s Day, Qingming Festival, Dragon Boat Festival, and Mid-Autumn Festival will each have 3 days off (if the holiday falls on a Wednesday, only that day will be a holiday); the National Day holiday will be extended to 8 days if it coincides with the Mid-Autumn Festival.

In accordance with these principles, the specific holiday arrangements for 2025, including New Year’s Day, Spring Festival, Qingming Festival, Labor Day, Dragon Boat Festival, Mid-Autumn Festival, and National Day, are as follows.

2023 October 25, The General Office issued the China holiday arrangements in 2024. The notice said that with the approval of The State Council, the specific arrangements for the New Year’s Day, Spring Festival, Qingming Festival (Tomb-Sweeping), Labor Day, Dragon Boat Festival, Mid-Autumn Festival and National Day holiday in 2024 are notified as follows.

Chinese government has announced the latest 2023 China Public Holiday arrangements. Check the picture below to see 2023 China Public Holidays.

This year the Mid-Autumn festival and national day holidays are combined together, with total 8 days off.

What employers need to know when hiring in China? This article explains the most critical information that employers should have when hiring in China.

1. Company must sign a written employment contract with each employee in China.

In China, signing a labor contract electronically is uncommon when hiring in China, and E-labor contracts may increase the likelihood of future labor disputes. It is strongly advised that you have a written employment contract.

Employees must sign each copy of a labor contract in China, while the employer must sign and chop the company seal on each copy. One original copy must be kept by both the employee and the employer.

Read more about China Labor Contract.

2. You can set probationary periods for your employees in China.

3. Contribute China social security on time and in full is very important.

There are five social insurance and one housing fund in China’s social security system. The Chinese social security system is extremely difficult to comprehend. In China, each city’s social security contribution base and percentage are different when hiring in China.

The social security contribution base for each employee will be adjusted annually based on their average salary from the previous year.

Read more about China Social Security System.

4. 13th month salary is not mandatory but common in China.

Many overseas employers may consider that 13th month salary is obligatory when hiring in China. In reality, the employer can choose whether or not to make an offer. However, if the 13th month salary is clearly stated in the employment contract, the employer is required to pay the employee.

The smart option when hiring in China is to give annual bonus to employee based on their performance.

5. Getting to know the China termination policy in advance.

In contrast to the United States, employers can easily fire employees due to the employment at will. Termination is a difficult process in China. Employers must notify employees one month in advance or pay one month’s wages as notice period compensation. The severance payment must also be paid by the employer. The amount of severance pay is determined by the number of years a person has worked for the company; the standard practice is one month’s salary for one complete working year when hiring in China.

6. You cannot hire employees in China directly without company establishment.

Many foreign companies will pay their employees in China directly even they have no company registered yet. It is very important to know that only registered company in China are able to hire employees in China and handling employees’ payroll, mandatory social securities. The compliance way is to engage a China EOR (China Employer of Record) and PEO vendor to hire employees.

Read more on How to Hire Employees In China Without Legal Entity?

7. Contractors are not suggested in China.

Contractors are quite common in western world. Considering the culture in China, Chinese people is more prefer to work as a full-time employee instead of hiring as part time employees and contractors. In China, contractors are not protected under China labour law, and employees are unable to engage into the China social security system. You shall consider if you would like to hire them as contractors or employees when hiring in China.

Read more about Contractors in China.

8. Benefits of using a China PEO/China EOR – China Employer of Record.

Hiring employees in China through a China PEO or China EOR is one of the most flexible and cost-effective solution when foreign investors have no company established yet in China. The PEO/ China EOR vendor in China will act as the employer of record, handle employee’s labor contract, payroll, social security, individual income tax in China while employees are working for you directly in China.

Read more about What is China PEO & China EOR? How does it work in China?

9. You shall apply work visa for your foreign employees in China.

If you want to hire foreign workers in China, you must first learn about the China work visa and residence permit processes, which vary by city. It’s becoming more difficult to hire foreigners who are currently outside of China as a result of the Covid-19. Only foreigners who have received Chinese vaccinations are permitted to enter. In China, there is a scoring system for visa applications; foreigners with a score of more than 60 can obtain a work permit and a residency permit. The entire application process takes about two months. It is critical to understand that foreigners can only legally work in China after obtaining a work permit and a resident permit.

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.

Info@jscgroups.com

Hire independent contractor in China can be a good strategy for companies when they’re working on a specific short-term project that doesn’t require full-time employees. Independent contractors are quite popular in western countries like United States and are becoming popular these years in China. This article will walk you through the most important aspects of hiring independent contractors in China.

What are Independent Contractors in China?

An independent contractor in China is a person who provides temporary services to a company or organization under the terms of a business or service contract in China. An independent contractor is a self-employed person or entity hired as a non-employee to perform work for or provide services to company in China. There is no employment relationship between the independent contracts with the company in China.

Difference of Independent Contractors and Full time Employee in China.

Tax Obligations for Independent Contractors in China.

An individual’s income derived independently from performing various services not for employment, such as design, decoration, installation, drafting, laboratory, testing, medical, legal, accounting, consulting, teaching, translation, reviewing, calligraphy and painting, sculpture, video, audio, video, performance, performance, advertising, exhibition, technical services, introduction services, brokerage services, agency services, and other personal services shall all contribute individual income tax in China.

Deduction of expenses for remuneration of independent contractors services: for each income of less than CNY 4,000, the deduction is CNY 800; for each income of more than CNY 4,000, the deduction is calculated at a rate of 20%.

The amount of each income is used as the withholding taxable income, and the excess progressive withholding rate of 20% to 40% is applied, as shown in the table above.

Amount of withholding tax payable in advance for remuneration for independent contractors services = amount of withholding tax payable in advance – Quick deductions calculation

Example:

If the company pays CNY 70,000 yuan for independent contractors in China, the calculation process of withholding tax on this income is as follows:

Income: 70,000*(1-20%)=CNY 56,000

Income Tax payable in advance: 56,000×40%-7,000=CNY 15,400

Understand more about How to Calculate Employee Salary in China? [China Payroll Guide].

Important Tips when hiring independent contractor in China.

1. Do not pay independent contractor in China from overseas, which may have the tax compliance issue. You can pay through China PEO vendor.

2. Do not manage independent contractors working time, working method, working place etc, which might be treated as full time employment.

3. Company shall calculate and declare the individual income tax for independent contractors in China.

4. Do not sign employment contract with your independent contractor in China.

Frequently Asked Questions about hiring independent contractors in China.

Do I need to sign contract with independent contractors in China?

Yes. A contract can help you to avoid any potential disputes by ensuring that both parties are on the same page. Please do not mention any terms in relation to managing your China independent contractors’ working hours, managing their work in detail, or anything else. This term could lead to the relationship between independent contractors being treated as full-time employment.

Can I hire independent contractors in China through my oversea entity?

No. Sign independent contractor in China with your oversea entity is not under protection in China. As an oversea entity, you are unable to declare and deduct the individual income tax for independent contractors in China which will have the risk for tax compliance. The compliance method of hiring independent contractors in China is through a China PEO and employment agency.

Should I need to contribute social security for my independent contractors in China?

No. If you are hiring independent contractor in China, you don’t need to contribute China social insurance and housing fund for them. Only hiring full time employees in China are required to contribute China social security.

How to hire and pay independent contractors in China?

If you have your registered company in China, you can sign agreement with them directly and pay them as agreed in the agreement. If you have no legal entity in China, you shall engage a China PEO and employment agency, to have them signing the agreement with your independent contractor in China, and they can ensure the payroll compliance.

Should I pay my independent contractors monthly in China?

No. There is no requirement for payment frequency for paying independent contractor in China. Usually paid shall be paid after project or services completed. Detailed payment rule can be aligned by independent contractors and company in the agreement.

Should I undertake severance payment when terminating independent contractor in China?

No. Since this is not an employment relationship, relationship at be ended at will.

Can I know any other ways of hiring contractors or employees in China?

The below article is going to guide foreign investors regarding different type of options that can enable them hiring employees in China in a quick and compliance manner.

Best way to hire employee in China in 2022

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.

Info@jscgroups.com

Comprehensive guide to help you understand all practices about hiring employees in China to ensure your hiring in Chinese are fully compliance under China Employment Law.

Contents:

1. China Labor Contract
2. China Employment Law
3. Work Rules and Working Hours in China
4. Probation Period in China
5. Severance Payment
6. Overtime Pay
7. Bonus in China
8. Hiring Cost in China
9. China Individual Income Tax
10. China Social Security – Social Insurance
11. China Social Security – Social Housing Fund
12. Salary Payment in China
13. China Annual Leave Policy
14. China Pension and Retirement Age
15. Sick Leave Policy in China
16. China Maternity and Child Care Leave
17. 2022 China Public Holiday

1. China Labor Contract

China Employment Law is the most important law in China governing the relationship when hiring in Chinese. This China employment Law applies to both foreigners and local Chinese employees, and it applies to both local Chinese companies and Wholly Foreign-Owned Enterprises (China WFOE). This China Employment law was created to protect the rights of employees hired in China and to foster harmonious working relationships.

Only registered company in China are eligible to hiring in Chinese and sign labor contract with employees in China. For foreign companies who has no legal entity in China, hire employee in China through a China PEO is the compliance employment method. Learn more about How to Hire Employees In China Without Legal Entity?

A written labor contract is required. The labor contract must be written in Chinese, with an English translation. In the event of a dispute, courts will only rely on the Chinese version. Employers operating in China without written labor contracts face a number of risks. In particular, if an employer fails to provide a written labor contract for employee more than a month, the employer will be required to pay double the employee’s monthly salary.

If an employer fails to execute a written labor contract for more than a year, the employee will be deemed to have entered into an open-term / permanent employment contract with the employer.

A written employment contract is required by China Employment Law. Some terms must be defined are list below:

• Fixed-term or ad hoc.
• Probation periods vary in length.
• Name, position, term, benefits, social security, and so on must be stated.

Understand more about Employment Contract in China [China Labor Contract Template].

2. China Employment Law

How to hire employee in China is one of the frequently asked questions among foreign investors who are new comers to the China market. This article is going to guide foreign investors regarding different type of options that can enable them hiring employees in China in a quick and compliance manner.

3 Compliance ways to hire employee in China

Labour Law of the People’s Republic of China is quite complex. There are three different kinds of options for foreign companies to hire employee in China to start their business follow the law.

Hire Employee in China through China PEO & Employment agency before having a company established in China

Hire employee in China through a China PEO and employment agency is the best hiring option for foreign investors who are just getting started in the China market and want to hire some staff before registering a company there. The PEO in China or the employment outsoucing agency in China will sign the local employment contract with the employees you choose, handle the monthly salary calculation and disbursement, contribute the statutory benefits such as social insurance and housing fund, and ensure tax compliance in China under the China PEO and employment solution.

What type of business should hire employees in China using a China PEO & Employment solution?

1. Company who has no long-term plan in China and would like to test the China market.
2. Companies that are in the process of establishing a business in China but want to hire employee in China first.
3. Company who is not willing to set up the company in China and only want to hiring in Chinese.

The advantages of hiring employees through a China PEO or employment agency.

1. No legal entity and company required.
2. Fast. Able to on-boarding employee within 2 weeks in China.
3. Ensure payroll and employment compliance in China.

Understand more on Steps to engage a PEO in China.

Hire Employee in China through China WFOE

For foreign companies already has their WFOE (Wholly Foreign Owned Enterprise) established, hiring employees through their China WFOE is the most common option in China as the WFOE already has the capacity to hire employees directly. In this case, China WFOE will directly sign a China local labor contract with their employees and ensure that China payroll and mandatory benefits are processed on time. Because of the complexities of China’s local regulations, it is highly recommended that foreign companies hire a China HR outsourcing firm to handle their employees’ payroll and benefits in order to ensure compliance.

Before you decide to hire employees through your China WFOE, make sure you check the following items:

1. Understand and learn China salary structure and average salary in China.
2. Make certain that the corporate registration and bank account are fully completed.
3. Ensure that the company has already established a corporate account for social security and housing funds.
4. You can only contribute the social security in the city where your WFOE is registered. If your employee is located in other city in China, you shall engage a China payroll service provider to handle the social security.
5. Make sure that you already have a comprehensive China labor contract to sign with your Chinese employees. Contact JSC for China labor contract template. Understand more of China labor contract.

Hire Employee in China through China Representative Office

Representative office in China is also one of the common entity types among foreign investors. It is critical for foreign investors to understand that the China representative office is not permitted to hiring in Chinese directly; all hiring under the China representative office must go through a China labor dispatch agency or employment outsourcing agency in China. The Chinese employees will be officially hired and dispatched to work for the China Representative Office by a China labor dispatch agency. The foreign parent company can hire foreign employees, and the China representative office can register the foreign employees as representatives to work in China for the China representative office.

Hiring employees in China through a oversea entity is not compliant.

Many foreign companies choose to hire their employees directly through their overseas entity, which is very risky and illegal in China and can be interpreted as avoiding the liability of tax and mandatory social security contributions. Without a written labor contract in China with a China registered company, neither the employee nor the employer are protected. Hiring employees in China through a China PEO and employment agency is one option to avoid hiring through an overseas entity.

What is the best way to hire employee in China?

If you have no company in China, China PEO and China employment solution is the best option for you to hire employee in China without a legal entity.

If you have a legal entity in China, hire employee in China under your own China WFOE is the best option.

Once you have decided which hiring option you are going to us, you shall also learn about the hiring tips in China, check our article about Top Tips For Hiring Employees in China [2022 Complete Hiring Practices]

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.

Info@jscgroups.com

Hiring employees through a PEO agency in China is becoming increasingly popular among international investors looking to start a business in China . How to recruiting in China simply and in a compliant manner is a critical issue for international investors who do not have a legal entity in China or who are in the process of establishing China WFOE. This problem can be solved by a PEO in China under employment outsourcing, which can assist international companies in employing staff in China prior to establishing a company in China.

If you are unfamiliar with China’s PEO or EOR, the following two articles will be of assistance to you.

What is China PEO & China EOR? How does it work in China?

How to Hire Employees In China Without Legal Entity?

If you already have a basic understanding of China PEO and EOR, the following 5 stages for hiring a PEO in China can help you onboard your first employee quickly and easily.

Contents:

Step 1: Select a local PEO in China

Step 2: Prepare Employee On boarding Information and Documents

Step 3: Review local employment contract

Step 4: Understand China payroll and monthly hiring cost

Step 5: Pay On time. Employee onboard through PEO in China

Step 1: Select a local PEO in China

In China, there are many PEO vendors with various names, such as EOR vendors, employment outsourcing agencies, employee outsourcing service providers, recruiting agencies, and so on. You can also find foreign PEO in China, state owned service provider, or local private service provider.

Given the complexities of China’s local employment policies, payroll, and benefits regulations, a local PEO service provider is more recommended because they are more familiar with the local policies and have more local resources and knowledge to assist you in completing the employer liability and handling potential labor disputes. In the meanwhile, local service provider is hiring in Chinese employee under their own legal entity, and handle employee’s payroll and social security themselves which also ensure the efficiency and speed of response, while there are many foreign PEO service providers who actually outsource or subcontract the PEO employees to the local service provider. As a result, it’s critical to select a PEO in China who runs their own operation and business locally.

Here are some helpful hints for choosing a competent PEO vendor in China.

• Select a Chinese service provider who can hire employees directly.
• Examine the PEO vendor’s provincial and city coverage and choose the one with the most.
• Review the PEO vendor’s labor conflict history and choose the one with the fewest labor disputes.
• Choose a local PEO in China with extensive experience working with global enterprises in China.
• Examine the service contract and China labor contract template that the PEO in China will sign with the PEO employee, and choose the one that offers multilingual agreements.
• Examine the China PEO vendor’s flexibility in terms of salary pay dates and payment dates. Choose the one with the most versatility.
• Examine the extent of services provided by the China PEO vendor.

Step 2：Prepare Employee On boarding Information and Documents

Based on the above recommendations, you should find a qualified China PEO service provider. It is critical to explain the PEO and EOR employment models to your Chinese employee. Because employees may verify the company’s background and records online, choosing a reputable local service provider is critical. Your employees will be more inclined to work for a reputable PEO in China.

Following initial alignment with your PEO employee in China, you will begin gathering on boarding information and documentation from your employee, which will be utilized mostly for payroll processing, local labor contract preparation, and mandatory benefits contribution.

Although different cities in China may require different paperwork, the general information and documentation required for on-boarding a PEO or EOR employee in China are included below.

• Employee personal information includes full name, social security number, home address, phone number, bank account information, marital status, nationality, and current social security status, among other things.
• Employment details including employee salary in China, on-boarding date, working city, social security contribution city, position, probation period, monthly gross compensation, annual leaves, and other benefits, among other things.
• A copy of your ID card
• Copy of your bank account
• Employee page in Hukou book
• Previous employer’s termination certificate

Step 3: Review local labor contract template

Your PEO vendor in China will sign China local labor contract with your employees in China as the employer of record. It will be the responsibility of the China PEO vendor to produce a local labor contract based on the personal information and employment details provided by you. The labor contract of a China PEO vendor is usually a generic form that covers all of the required terms and circumstances for hiring employees in China.

Although labor contracts in China must be written in Chinese, you will need a bilingual (Chinese and English) local employment contract to fully comprehend the terms and conditions.

It is strongly recommended that you check the provisions of the labor contract given below to guarantee that both your business in China and your employee’s benefits are protected under such an employment contract.

• Employee’s salary and benefits
• China Leaves and China holidays
• Confidentiality
• Work duties
• Intelligence Property

Many multinational companies prefer to incorporate their global policies, terms, and conditions into their employee contracts in China; nevertheless, this is not recommended. The best option is to provide the terms and conditions to your chosen China PEO service provider, who will then evaluate and change the terms to verify that they are all in conformity with Chinese laws.

Step 4: Understand China Salary and monthly hiring cost

Although it is difficult for foreign investors to fully understand China payroll and China salary calculation due to the complexity of local policies in China, it is nevertheless critical that you have a general understanding of the employment cost structure in China. You can also request a quick training on China payroll and how your employee’s salary is computed from your China PEO vendor.

Understand more about China salary and China average salary, read. Complete Guide on Salary in China 2022 [Average Salary in China]

Here is one article for that can help you to understand. How to Calculate Employee Salary in China? [China Payroll Guide].

To sum up the most essential payroll and labor cost advice in China,

1. China salary shall be paid monthly.
2. Instead of a net pay, offer a monthly gross salary.
3. Employee gross monthly wage – Personal tax – Employee social security contribution= Employee net monthly salary
4. Monthly employment and recruiting cost = Employee monthly gross wage + Employer social security contribution
5. Salary for the 13th month is optional. It becomes necessary, however, if it is included in the labor contract.
6. The basis and percentage of contributions to social security vary by city.
7. Social security contribution base is adjusted yearly.

Step 5: Pay On-time. Employee onboard through PEO in China

The last step is very simple but extreme important. Remember to pay your China PEO service provider on-time so that the PEO in China can release the salary to your employee on-time and contribute their local tax, social insurance and housing fund on time and in full.

Considering the foreign currency control in China, usually it takes 5 days to receive the payment from overseas to China. If your employee pay date is on last working day of each month, it is safe to pay your PEO in China around 20th of each month. The date will vary depending on local holidays and holidays in your native country, such as Chinese New Year (January, February), China National Holiday (October), and Christmas (Dec).

Hiring employees in China through a China PEO service provider is a simple and legal way to start a business in China without having to set up a corporation. The first and most critical step is to find a reputable PEO provider in China.

Please contact us if you require any other information on China PEO.

Info@jscgroups.com

Hiring employees through PEO and EOR agencies is quite popular globally especially during the COVID-19, international expansion is restricted due to the border restriction in each country. The most appropriate method for doing business in China is through a China PEO or China EOR agency. This article helps you to understand how China PEO and China EOR works in China

Contents:

What is PEO & EOR?

What is PEO and EOR in China?

What are the obligations from the China PEO and China EOR agency?

Advantages of engaging a China PEO and China EOR

Disadvantages of hiring employee through PEO and EOR agency In China

How to hire employees in China through China PEO & China EOR?

What kind of company shall use China PEO & China EOR?

Cost of hiring employees through China EOR?

What is PEO & EOR?

PEO is the abbreviation of professional employer organization, while EOR is the abbreviation of employer of record. PEO and EOR agency usually support on the employment, payroll, mandatory benefits, tax filing, social security, labor dispute, employment relationship, etc.

The PEO and EOR agency will enter into a co-employment relationship with the actual employer and employee. Through such co-employment, the PEO and EOR agency will act as the employer of record (EOR) and handling all the mandatory employment and payroll related issues on the name of legal employer, while employees are managed and work for the actual employer.

What is China PEO and China EOR?

PEO and EOR in China is also called labor dispatching, talent dispatching, labor leasing, employee outsourcing. It is usually provided by the licensed human resource agency or consulting firm in China.

Similar like global PEO and EOR agency, China PEO and China EOR agency will act as the employer of record to sign the local employment contract with the local Chinese employees that are selected by client. The China PEO and China EOR agency will complete all the compliance procedure of employee on-boarding, off-boarding and monthly payroll, China social security. However, employees daily work management is all managed by client who is the actual employer in China. Read more about How to Hire Employee in China Without a Legal Entity.

What are the obligations from the China PEO and China EOR agency?

As the China PEO and China EOR agency, below are all the mandatory things they shall complete to ensure the hiring compliance in China

• Sign a written Chinese labor contract with each employee in China
• Complete employee’s mandatory social security and housing fund registration in the first month of on boarding in the city where employee is located
• Employee payroll in China. Calculate employee’s salary and statutory benefits base on the policy of the city where employee is located on the monthly basis.
• Release salary to employee monthly on time
• Contribute the mandatory China social security and housing fund monthly
• Declare employees’ local personal tax/individual income tax monthly
• De-register employee in the social security and housing fund bureau when employee leave
• Handling employment relationship, labor dispute, termination issues in China
• Assist employee in declare the yearly annual tax return yearly

As the local HR and employment expert, China PEO and China EOR agency shall be a very important role between actual employer and employee, to ensure the hiring and payroll compliance in China.

Advantages of engaging a PEO and EOR in China

Engaging a China PEO and China EOR vendor to start doing business in China is a very smart approach. Especially for foreign investors, who have less knowledge of China market, local regulations, market situation. Below is the conclusion of the advantages of engaging a China PEO and China EOR.

1. Able to hire employees anywhere in China without setting up your own legal entity

In China, if you would like to legally hire employees, you shall have a China legal entity to hire employees. However, for foreign investors it takes time and efforts to setting up a WFOE in China. Therefore, engage a China PEO or China EOR vendor can easily hire employees working for them without the establishment of the legal entity.

2. Easy and quick method to start doing business in China

China PEO and China EOR allowed foreign companies to start business in China within 1 week. Once the candidates been selected by client, the China PEO agency i can complete the on-boarding process within 1 week so that client can have the employees in China to start their business.

3. Flexible China market entry and exit approach

Many foreign investors would like to test the China market in the very initial stage. Setting up a company in China like China WFOE indeed is time and cost consuming, and it is not easy to close if foreign investors finally decide to leave China market. China PEO and China EOR indeed is the most flexible option for foreign investors to test the China market by hiring some local Chinese employees working for them. They can make a decision after couple of months to stay in the China market by setting up a China WFOE or leave the China market by terminating the employment relationship with the employees through the China PEO and China EOR agency.

4. Limited cost and liability

As foreign investors who want to establish a legal entity in China, it usually cost the initial establishment and ongoing maintaining of the tax accounting. In the meanwhile, the corporate itself in China undertake the high liabilities. Engaging a China PEO and EOR in the early stage of doing business in China can help foreign investors to control the cost and liability.

5. Avoid facing complexity China local laws and regulations

The complexity of China local laws and regulations make it difficult for foreign investors to start doing business and hiring employee in China. China PEO and China EOR agency can be a bridge for foreign investors to understand the local regulations, practices, and ensuring the hiring compliance in China.

Disadvantages of hiring employee through PEO and EOR agency In China

Employee may have less sense of belonging since their actual employer and legal employer is different. In this case, we suggest foreign investors can offer some extra benefits to employees, for example, commercial insurance, family insurance, gifts during different festivals in China through the HR agency in China to compensate employees.

When the headcounts in China are increasing, hiring under China PEO might be not good. In this case, most of the companies will then set up their own China WFOE and transfer all the employees to the China WFOE.

How to hire employees in China through China PEO & China EOR?

As introduced, China PEO and China EOR solution is indeed a good approach for foreign companies to quickly and easily start a business in China. Below are the steps of engaging a China PEO and EOR agency to hire employees in China while you don’t have a presence establishment yet.

Step 1: Select a qualified China PEO/ China EOR vendor

Step 2: Find your candidate in China

Step 3: Collect the personal information and employment details of the candidate

Step 4: China PEO/China EOR vendor prepare local employment contract

Step 5: China PEO/China EOR vendor prepare the first month invoice with the employment cost breakdown

Step 6: Foreign company transfer the invoice payment to China PEO/China EOR vendor

Step 7: China PEO/China EOR vendor release register employee into social insurance and housing fund bureau

Step 8: China PEO/China EOR vendor release first month salary to employee and declare tax

Read more on 5 steps to engage a PEO in China.

What kind of company shall use China PEO or China EOR?

There is different situation that company can engage a PEO/EOR service provider in China to hire employees.

1. Foreign investors who have no legal entity in China

The most common situation to engage a China PEO/China EOR is when foreign investors have no legal entity in China. In this case, the only compliance method to hire Chinese employees are through a China EOR or PEO agency in China. Employees can be selected by foreign companies and employed by the local Chinese PEO/EOR agency, while employees can work on the market research, sales, client management, etc for the foreign investors.

2. Foreign investors who are in the process of setting up a company in China

While it takes couple of months to set up a company in China, sometime, foreign investors would like to hire someone in China first. In this case, hire employee through a China PEO/China EOR is also a good option. Employees can transfer to the new entity after establishment.

3. Companies in China that has no headcounts to hire employees directly

Some of the companies may have the limited headcounts for hiring their own staff, they might can choose to engage a China EOR agency to hire the other employees until they have more headcounts to hire by themselves.

4. Companies in China who want to outsource a function

It is also very common in China to outsource the supporting function like call center, account management team. More like a BPO case, the PEO/EOR agency in China will hire the whole function for clients in China.

Cost of hiring employees through China EOR?

The cost of hiring in China includes the employee’s monthly gross salary, employer contributions to social security, and additional employee benefits such as supplementary health insurance and medical check-ups. Additionally, the service fee from the China EOR (Employer of Record) provider and applicable taxes must be factored into the total cost.

Read more about Pay Employees in China through China Employer of Record.

China PEO and China EOR agency can be a bridge for foreign investors to understand the local regulations, practices, and ensuring the hiring compliance in China. Remotepad has independently judged JSC as one of the leading China EOR agencies.

No matter it is hiring employee through a China PEO agency/China EOR agency or by China WFOE directly, it is all very important for foreign investors to understand the tips and practices of hiring employee in China.