Employer Of Record in China
Skuad’s Employer of Record China (EOR) solutions make business expansion to China easy and hassle-free. Our unique HR platform allows companies to hire exceptionally talented employees in China, without having to set up a separate legal entity. It streamlines the process of hiring and onboarding a remote team by handling payroll management, taxation, and other legal compliances. To learn more about Skuad, Book a demo today.
China At A Glance
Estimated Population: 1.4 billion
Currency: Yuan (CNY) and Renminbi (RMB)
Capital city: Beijing
Languages: Mandarin, Cantonese
GDP: 2.3% (2020)
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Employment In China
The employment laws and regulations in China apply to both national and foreign employees. However, there are some variations in the benefits and entitlements. A formal and written employment contract is a must for every full-time employee hired in China. There are three types of employment contracts.
1. Fixed-term contract - This type of employment contract lasts only for a specific period.
2. Non-fixed term contract - This type of employment contract does not have any definite expiration period.
3. Project-based contract - This employment contract ends with the completion of the project.
The Chinese government offers all its citizens and residents a basic health insurance plan. Apart from this, many organizations also offer supplemental insurance benefits to their employees. In addition, employees are also entitled to get retirement benefits, employee health benefits in China, unemployment benefits, disability benefits, and maternity benefits during their employment. These benefits are given under The Labour Law, The Social Security Law, The Work Safety Law, and The Union Law.
The Chinese government updates its laws from time to time; keeping track of the latest provisions and updating work procedures can be a daunting task for foreign employers. Skuad’s EOR solutions can help you manage these complexities and mitigate challenges. Our team will ensure seamless hiring and onboarding, all in accordance with the relevant laws and procedures. To learn more about Skuad solutions, click here.
Mandatory Employee Benefits
Leave, Accrual, And Statutory Holidays
In general, the Chinese leave policies are not as generous as those of western countries. Therefore, many local and foreign companies choose to stretch the minimum limit and offer more leave and rest days to the employees as a negotiating tool.
Contractors Vs. Full-Time Employees
Companies planning to expand operations abroad or hire foreign talent have to choose between independent contractors and full-time employees. Here is a guide to smoothen the process and know everything about hiring contractors vs. hiring full-time employees in China.
Hiring an independent contractor is a relatively quick and hassle-free process. There is no legal commitment other than the employment contract. Furthermore, there are no overhead costs like benefits, statutory payments, and payroll taxes.
Since it is not mandatory to establish an entity or branch office to hire a contractor, hiring independent contractors can prove to be a wise decision for short-term projects. The professional relationship ends once the term or project is complete. However, a company is free to re-engage any contractor as per their current needs.
Many organizations have realized that hiring a full-time workforce is a better choice for expanding operations on foreign land. It makes complying with employment laws easier. Moreover, the companies also get an opportunity to foster long-term relationships with talented employees.
Although there are several administrative steps in the hiring process, partnering with employers of record EOR such as Skuad can make things easier for your company’s expansion. Click here to learn more.
Hiring In China
Hiring independent contractors
- It is mandatory to define the work parameters for any company that wants to hire independent contractors in China. However, the contractor has the last word on working methods, timing, and machinery used.
- It is mandatory to have a written agreement or contract that specifies the mode of payment of fees and the term of the contract.
- Some independent contractors might also want to use incremental or escrow (third-party) payment systems to protect themselves against non-payment issues.
Hiring full-time employees
- Hiring full-time employees in China is a complex procedure.
- Companies need to have an official employment contract for every employee.
- It is also mandatory to maintain employee files along with their compensation details.
Most organizations use popular Chinese job search platforms like Monster, China Job, China Hot, Careerengine, and Matchdragon to hire employees in China. Many fresh graduates upload their CVs on these platforms regularly. Choosing the right candidate can help employers in growing their business.
However, companies seeking to hire employees need to be extra vigilant about the authenticity of the profiles circulating on these platforms. With the volumes of applications received on these platforms, the chances of encountering fake profiles are high. Employers can also get in touch with the best hiring companies in China to find the right candidates for the job.
Alternatively, companies that want a hassle-free and safe hiring process can enlist the services of Skuad’s local EOR for screening profiles diligently, along with reference checks to ensure the best workforce selection for the organization. To learn more about Skuad, click here.
Probation & Termination
Probation & termination regulations in China are quite different from other nations. Here are some of the laws and regulations to consider.
Termination of employment in China
Employees in China cannot be terminated unilaterally by the companies. The ‘at will’ employment policy does not apply in China. Every company operating in China should be aware of the termination rules and regulations. Failure of compliance with these rules can result in penalties, employee payments, and employee reinstatement.
EOR Solution In China
Partnering with an EOR is one of the fastest ways of expanding your business into international markets. It enables employers to explore new markets and retain key talents, irrespective of their location. Lower risk, cost-effectiveness, and rapid set-up are the other benefits of EOR Solution.
With Skuad as an EOR partner, your business is set free from legal compliance issuess, taxation laws violation, provision of solicitors, and lawyers, and leaving you with ample time to concentrate on core marketing operations and getting a leg up in the international market. Click here to know more about Skuad.
Types Of Visas In China
There are eight types of visas in China.
Requirements to obtain a work visa in China
All work visa applications require submission of the original passport, offer letter from the employer, photograph, health certificate, and valid employment license to the Chinese authorities.
However, companies can also get in touch with the officials of the Ministry of Foreign Affairs or the Consulates / Embassies of the People’s Republic of China for the latest information on China’s work visa requirements.
Skuad is an EOR that can help you sponsor a Chinawork permit for foreign employees or get a Visa Z that allows them to work in China. Skuad handles all the work permit formalities along with other requirements of employment in China. Want to know more? Click here.
Payroll & Taxes In China
When understanding the system of payroll & taxes in China, it is important to understand the four payroll options:
1. Remote payroll - When a foreign employer or a non-resident organization hires resident employees in China, it comes under remote payroll.
2. Local payroll - At times, companies register their business in China under the Representative Office, Joint Venture, or Wholly Foreign-Owned Enterprise. However, some companies prefer to have another organization administer its payroll. This is termed local payroll. In this case, the EOR is fully responsible for obedience to tax, work permits, payroll, immigration, and employment regulations.
3. Internal payroll - Internal payroll is when large-scale companies wish to operate their local payroll across all their employees, be it local or foreign.
4. Fully outsourced payroll and employment - At times, companies decide to outsource the employment and payroll from the Global Employment Organization (GEO) in China. Such companies come under the fully outsourced payroll and employment system.
Skuad is a leading Global HR platform that can handle all your payroll and tax compliances while expanding your business in China. Click here to know more about it.
Social Security Contributions
Bonuses are awarded at the end of the year which equals one month of salary of the employee.
Incorporating a holding company in China involves several formalities and documentation procedures. It is vital for any company planning to expand into China to be aware of all the laws and formalities involved in incorporating a holding company.
Skuad can be your companion in simplifying the process of setting up a subsidiary in China. With a highly experienced team, Skuad will handle all the paperwork and documentation formalities of incorporation for you. To know more about it, click here.
Professional Employer Organization
A Professional Employer Organization China (PEO) is an organization that partners with a business entity to offer various HR services such as tax filing, employee benefits, payroll, and processing. This concept is also known as co-employment, wherein the hiring company takes care of the HR matters of the employees. As a company, PEO gives you better control over business operations.
On the other hand, an Employer Of Record (EOR) is an alternative payroll solution offered by global HR platforms. An EOR provides the same services as a PEO, but an EOR becomes the payroll employees’ legal employer.
Since an EOR is the legal employer, it takes care of compliance, payroll, timekeeping, unemployment claims, work permits in China, and worker’s compensation. As a legal employer, EOR holds all the responsibilities and liabilities of the employees.
Organizations planning to expand into new territories are better suited with a global EOR which becomes the legal employer on behalf of the organization. Instead of associating with a PEO, a co-employment partner, organizations have more to gain by utilizing the services of a EOR solution. The EOR solution safeguards organizations from unexpected policy changes, loss of control, and potential risks as the EOR bears every legal liability for the organization. In addition to these, the EOR handles payroll, tax, and employment law compliances. To know more about Skuad's EOR solution, Contact Skuad today
With the growing markets, a wide range of business opportunities in China, and swelling spending power, China is a smart choice for any organization seeking business expansion.
However, adhering to complex employment contract laws, setting up payrolls, getting through work permits, and understanding labor laws discourage companies from moving in this direction.
Therefore, companies often seek alternatives to simplify this business expansion and employee management process. Skuad’s international exposure and globally distributed teams can help you hire an excellent workforce in China.
Be it payroll management, benefits, compliances, or taxation, Skuad has succeeded in earning the trust and confidence of its clients and aspires to grow with them in the future. It aims to offer the best EOR China services to make every business’s expansion dream come true. Connect with Skuad today and give wings to your business expansion plans.