Simplifying Employment in China: An Introduction to Employer of Record Services

By collaborating with an Employer of Record (EOR), foreign businesses can hire local or foreign staff without the necessity of establishing a local entity. Additionally, they can save time by avoiding the intricate maze of local labor laws, taxes, and regulations.

by | Apr 12, 2023 | Legal

Expanding your business into China often comes with the challenge of navigating the complex world of local labor laws, taxes, and regulations. Establishing a local subsidiary or company can be time-consuming and costly. Fortunately, Employer of Record (EOR) services offer a practical solution for foreign companies looking to hire and pay employers in China without establishing a local entity.

Understanding Employer of Record in China

An Employer of Record (EOR) is a third-party organization that serves as the legal employer for the employees of a foreign company operating in China. By partnering with an EOR, companies can hire local or foreign staff without the need to register a local company or subsidiary. The EOR manages administrative and legal aspects of employment, such as labor contracts, payroll, employee benefits, visa sponsorship, and compliance with local labor laws and regulations.

Advantages of Utilizing the Employer of Record Services

In China, the Employer of Record service is also known as staff outsourcing. By leveraging EOR services in China, foreign companies can enjoy several advantages:

  • Simplified market entry

EOR service providers enable companies to start operations in China without the time-consuming and costly process of establishing a local subsidiary. Foreign companies can also use the provider’s capacity to rapidly recruit and onboard employees, enabling them to adjust their workforce size according to market demands.

  • Compliance assurance

Doing business in China presents a unique set of challenges and risks for foreign companies. EOR possesses extensive knowledge of Chinese labor laws and regulations, ensuring that businesses remain compliant and avoid potential hazards or legal complications.

EOR can provide guidance on best practices for protecting intellectual property in China, helping foreign companies safeguard their assets and protect their reputation.

  • Cost and Operational efficiency

EOR will serve as the employee’s nominal employer, handling all the administrative and legal aspects of employment, allowing foreign businesses to concentrate on their daily business activities. This approach also leads to substantial cost savings, as foreign businesses are not required to invest in infrastructure, legal services, human resources, or other overhead expenses.

  • Enhanced global mobility

EOR can sponsor work visas for foreign employees, making it easier for businesses to hire and relocate talents in China.

Integra Group EOR solutions

 

By understanding the concept of EOR and carefully selecting the right provider, businesses can focus on their core operations and thrive in the Chinese market. Integra Group provides employer of record solutions for foreign businesses:

  • Employee onboarding
  • Labor Contract preparation
  • Payroll and Personal Income Tax calculations
  • Employee Social Welfare Benefits remittance
  • Employee Tax Return filings
  • Foreign Employee Work and Residency Permit applications

Contact us today to speak with our HR professionals and learn more about the EOR services.

 

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