Global Hiring: PEO & Employer of Record in China

Hire staff in China – without setting up a company

The People’s Republic of China, the new global economic superpower has long been the destination of choice for western businesses’ expansion plans. With almost unlimited market opportunities, the country offers growth potential within almost every industry. Our PEO in China solution enables the hiring of local staff without having to go through the complicated and costly procedure of registering an entity.

Becoming the official Employer of Record in China of our client’s employees, we take care of the local labor contract signing and take over the local employment admin liabilities that come along with scaling a global workforce.

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Transparent pricing

US$ 400 / employee / month. That’s it!

Compliant

Local employment contract and mandatory remittances

Flexible

Hire and onboard staff within just days

Risk-free

Stop the in-country presence at any time

Without setting up a company

When doing business in China, companies tend to choose between seeting up a Representative Office (RO), a Wholly Foreign-Owned Enterprise (WFOE) oor a Joint Venture (JV). In case a company is only required to employ local staff without any invoicing activities in Mainland, there is no necessity to incorporate an entity:

With PEO in China, Universal Hires becomes the Employer of Record onsite and takes care of the local employment admin
Easy, fast and smooth onboarding of local staff through Universal Hires’ in-house Chinese enitity

Chinese labor contract

The local employment administration will be handleded solely by Universal Hires, as the Employer of Record in China, on our foreign client’s behalf:

Drafting of a bilingual (English/Chinese) labor contract
Registration of the employee with relevant social insurance, housing fund and tax authorities on municipality level
Additional private medical insurance available
Full monthly end-to-end employment management (expenses, payroll, social insurance & income tax remittances)

Market presence in China

Having a local presence in Mainland China can be a key market advantage when scaling global business operations.

Optional office rental in Shanghai
Establish an extensive local network of partners, customers and distributors
Evaualte the long-term market potential in China
Strategy setup for the market entry of goods and services
Organization of local quality control management

Wolkenkratzer im Stadteil Pudong in Shanghai

Country-Guide: PEO & Employer of Record in China

Understanding the Chinese Labor Law is crucial when looking to hire a team in the Mainland. Universal Hires’ team brings along a long-standing market experience with helping foreign client’s scale their local operations.

Individual Income Tax (IIT)

Since January 1st 2019, China has adjusted tax brackets and changed residency rules in order to reduce tax burden on low income earners, with new special additional deductions available for resident tax payers.

The Individual Income Tax (IIT) is now calculated on an annual basis. Universal Hires is to withhold tax in advance on a monthly basis on the accumulated income and deductions. Individuals may have additional tax or tax returns to claim through the annual settlement process.

Labor contracts in China

There are several labor contract types that can be chosen when hiring through an Employer of Record / PEO in China. In practice, they include:

Fixed-term contract
Indefinite contract
Open-ended project-based contract

Working hours

The Working Hours Law of the People’s Republic of China states that a standard working week can be five working days with a eight working hours per day, maximum 44 hours of work per week.

Annual leave

A new employee’s annual leave entitlement of that year should be calculated on a prorated basis to the amount of time worked, from his/her actual commencement date until the end of the year; if it is less than half a day, it will be calculated as half a day; if it is more than half a day but less than one day, it will be calculated as one (1) day; The employee, who is still in the probationary period, is eligible for annual leave days on a prorated basis to the amount of time worked.

Employees during his/her probationary period shall also be entitled to annual leave.

According to the relevant regulations, under any of the following circumstances, an employee shall not eligible for the annual leave of that year:

The employee has taken sick leave for totally 2 months or more when he/she is an employee who has accumulatively worked for 1-10 year(s) in the company.
The employee has taken sick leave for totally 3 months or more when he/she is an employee who has accumulatively worked for 10-20 years in the company.
The employee has taken sick leave for totally 4 months or more when he/she is an employee who has accumulatively worked for 20 years or more in the company.
The employee has taken sick leave for 30 days in succession or in accumulation during a calendar year, he/she will not eligible for the additional leave of the following year.

Sick leave / Personal leave

Employees are entitled by law to a percentage of the salary paid according to the injury (work-related or not), medical treatment period (below six months or not), and completed years of services in the company. Ranges for percentage of the salary paid is 40-100% according the situation.

However, companies are allowed to offer individual sick leave benefits to the employee (e.g., min. 12 days fully reimbursed per calendar year upon medical certificate proof). Our HR team will adapt the language according to the practice that you want to follow with Jeremy.

Household registry in China

The Chinese household registry, also referred to as the Hukou system, plays an important role when onboarding local staff.

Hiring of Taiwanese / Hong Kong / Macau Nationals in Mainland China

Taiwanese, Hong Kong and Macau Nationals have a particular status in Mainland China and are considered somewhat in between a foreigner and Chinese. They can chose to contribute or not to the social insurances system, but do not benefit from the Mainland housing fund scheme.

In order for them to compliantly work in Mainland China, they will only need to apply for a special residence permit (Juzhuzheng 居住证) since those Nationals do not require a Work Permit.

Frequently Asked Questions

Is there a minimum engagement period to hire an employee through Universal Hires?

No, there is no minimum commitment period. The service agreement signed with Universal Hires can actually be terminated at any point of time respecting the 60 days’ notice period. This period allows us to coordinate a compliant termination procedure with the employee’s approval. There are no termination charges applied by Universal Hires.

PEO IN CHINA

Contact

WHERE WE ARE

Offices

Germany – HQ

Friedrichsstraße 34

10117 Berlin

Asia-Pacific Regional Office

18 Luard Road, One Capital Place

Wan Chai, Hong Kong