Hiring Chinese Employee Without a Legal Entity in China
In this article, we provide you with the idea on why hiring Chinese employee without a legal entity in China
It is not easy for a foreign entity to set up their WFOE (Wholly Foreign Owned Enterprise) in China. The entire establishment process is complex and time- consuming, with many approvals required by multiple government authorities in China.
So what’s a company to do in the meantime? Is there any other solution when hiring a Chinese employee before the WFOE is registered or has a Representative office?.
One solution when hiring a Chinese employee without a legal entity or before the WFOE is setup, is to have your employees hired by a Chinese HR Agency that has a license to do the talent dispatching service/employee leasing service in China, like HROne.The Chinese employee is then employed by the HR Agency and is dispatched to work for the foreign entity in China. Under the Chinese laws that apply to the HR service provider in China, the minimum employment contract term for talent dispatching/leased employee is two years.
The normal practice for talent dispatching/employee leasing service is that the HR Agency signs the contracted employee’s labor contract with your employee, and handles the employee’s monthly payroll, individual income tax (IIT) and mandatory benefits (social insurance and housing fund) in China. Normally, there is a three party agreement between the HR Agency, the dispatched employee, and the foreign entity.
Why choosing a PEO leasing agency to support you in China?
The professional China PEO service provider allow the Representative Office (Rep Office) or foreign companies who has no legal entity in China safely and legally hire Chinese employees in China, or for other specific circumstances where a direct employment contract is not desired or feasible.
In addition to having the employee signing the labor contract with us, this service also combines all the key benefits of HROne Payroll Solutions and Mandatory Benefits Solutions in China.
- Leased employee signs labor contract with HROne and is dispatched to the client
- All services included in Payroll processing and IIT service
- All services included in social insurance and housing fund handling
- Labor dispute ‘ legal support in case of a labor dispute
- Employees’ relationship management ‘ support to manage the relationship with your employees
Particularly for Representative Offices in China, Talent Dispatch is the only avenue to legally recruit local employees.
Free Labor Calculation
Calculate the total cost of employing foreign and/or local employees in China. The HROne Calculator provides an updated cost estimate of the employee’s individual income tax burden and the employee’s and employer’s social security and housing fund contributions.
How HROne can be beneficial to your business
HROne’s service can handle the complete employee benefits for your company in compliance with the local policies and also can take care of the visa for your company’s expatriate employees. HROne can directly hire employees for a company not having a legal entity in China by our specialized Employee Leasing / Talent dispatching services.