Discover how an Employer of Record (EOR) in China, backed by localized HR support, enables businesses to hire quickly and efficiently. With Employer of Record China expertise in compliance, onboarding, and local workplace requirements, it will ensure your business expansion is smooth and uninterrupted.
Quick Reference for EOR China Services:
Why Choose EOR China in 2025: China's GDP of ~$19.1 trillion and status as the world's second-largest economy make it an essential engine for global growth. However, regulatory scrutiny has tightened, and an Employer of Record China eliminates complex WFOE setup requirements while ensuring complete regulatory compliance from day one.
An Employer of Record (EOR) China is a third-party service that legally employs your workers in China on your behalf. While you maintain day-to-day management control, the EOR handles all legal employment responsibilities, payroll processing, benefits administration, and compliance with Chinese labor laws.
The EOR model has become increasingly critical in China as businesses navigate the country's complex regulatory environment and recognize China's importance as the world's largest manufacturing hub and second-largest consumer market. With China's government implementing comprehensive reforms through initiatives like the 14th Five-Year Plan, Digital China 2035, and Carbon Neutrality by 2060 goals, international companies require sophisticated local expertise to establish successful operations without the lengthy WFOE (Wholly Foreign-Owned Enterprise) setup process.
In China, the EOR model (often legally structured as Talent Dispatch or BPO) creates a strict firewall between your company and Chinese labor authorities. While you retain functional oversight, the EOR serves as the legal employer of record, shielding you from the complexities of the "Five Insurances and One Fund" system.
China stands as the world's second-largest economy and most populous country, offering companies access to the world's largest manufacturing base, rapidly growing consumer market, and increasingly sophisticated workforce. The country serves as both a global production hub and a critical market for international businesses across all sectors.
China has transitioned into the 15th Five-Year Plan (2026–2030), which pivots the economy toward "New Quality Productive Forces." This policy framework moves beyond simple manufacturing volume to prioritize:
Digital China 2035 Update: The long-term "Digital China" initiative remains in force but has evolved. The 2026 focus is on Data Assetization (treating data as a tradeable capital factor) and the Industrial Internet of Things (IIoT), positioning China not just as a consumer of digital tech, but as a global exporter of digital infrastructure standards.
China's employment landscape is governed by comprehensive regulations designed to protect workers while supporting economic development. Chinese employment regulations are primarily based on the Labor Law, Labor Contract Law, and various implementing regulations from the Ministry of Human Resources and Social Security (MOHRSS).
The regulatory framework emphasizes employment contracts, social insurance coverage, and worker protection while accommodating business flexibility through various employment arrangements. The State Administration of Foreign Experts Affairs oversees foreign worker permits and compliance.
China's minimum wage system is highly regional. In 2025, major Tier 1 cities implemented significant hikes to address the rising cost of living.
China's standard working week is 40 hours, not 44. While the 1994 Labor Law mentioned 44 hours, the State Council strictly enforced the 40-hour week (5 days x 8 hours) shortly thereafter. EOR contracts must adhere to this standard to avoid "overtime trap" lawsuits.
Chinese employees enjoy a mix of statutory and "family-friendly" leave. The biggest 2025 update is the extension of Public Holidays and the universal rollout of Childcare Leave.
The State Council officially increased statutory public holidays from 11 to 13 days for 2025 onwards:
The choice between establishing a WFOE (Wholly Foreign-Owned Enterprise) or partnering with an Employer of Record in China represents a critical strategic decision given China's complex regulatory requirements and lengthy approval processes.
Traditional WFOE setup in China can cost over $200,000 and take 20-32 weeks due to comprehensive requirements including State Administration for Market Regulation (SAMR) registration, environmental assessments, tax registration with State Taxation Administration, and multiple approval processes.
EOR providers offer immediate market entry with comprehensive compliance management, making them ideal for companies testing the China market or requiring rapid talent acquisition.
The EOR model provides particular value for companies entering China's competitive markets, establishing R&D operations, or managing sales and marketing teams without the complexity and cost of WFOE establishment.
The EOR implementation process in China leverages local expertise to navigate complex administrative requirements while ensuring full regulatory compliance and cultural integration.
China's sophisticated regulatory environment requires EOR providers with deep local expertise, government relationships, and proven compliance capabilities.
Critical evaluation criteria include relationships with Chinese authorities, understanding of regional regulations (given variations between cities/provinces), and proven track record managing complex social insurance and tax obligations.
China's employment contracts must comply with specific legal requirements while accommodating local market conditions and cultural expectations.
Employment contracts in China must be in Chinese with specific mandatory clauses including probation periods, termination conditions, confidentiality agreements, and social insurance obligations.
China's employee registration involves multiple government agencies and requires careful coordination across national and local systems.
The onboarding process includes registration for China's "five insurances and one fund" (pension, medical, unemployment, work injury, maternity insurance plus housing provident fund), tax identification setup, and work permit applications for foreign employees.
China's complex regulatory environment requires continuous monitoring of changing laws, tax regulations, and social insurance requirements.
Professional EOR providers maintain dedicated teams monitoring regulatory changes, managing government relationships, and ensuring ongoing compliance across China's multi-layered administrative system.
China Payroll & Tax Requirements 2026
China's payroll system is highly digitized under the Golden Tax System Phase IV. This system now fully integrates tax, social security, and banking data, meaning discrepancies between a company's reported payroll and actual bank transfers are flagged automatically by AI-driven audits.
Critical 2026 Compliance Standard:
China uses a 7-bracket progressive tax system for Comprehensive Income (Wages + Salaries).
China offers two parallel deduction systems. Tax Residents (183+ days in China) must choose one of the following two regimes. They cannot use both.
Extended to Dec 31, 2027: This regime was set to expire but has been officially extended.
China's social security system requires contributions to five insurance funds plus the Housing Provident Fund. Rates and caps are adjusted annually in July based on the city's average salary.
China's payroll processing requires coordination with multiple government systems and adherence to strict reporting deadlines.
China's payroll systems require payment through local banks with detailed government reporting through various online platforms managed by tax and social insurance authorities.
China's workplace culture emphasizes hierarchy, relationships (guanxi), and long-term thinking, deeply influenced by Confucian values and socialist principles. Understanding concepts like "face" (mianzi), relationship-building, and collective harmony significantly enhances business success.
Chinese business relationships prioritize trust-building, mutual respect, and long-term commitment. The concept of "guanxi" (relationships/connections) remains fundamental, requiring investment in personal relationships and social obligations.
China's "Five Insurances and One Fund" system is strictly enforced. In 2026, the definition of "Mandatory Benefits" has expanded in practice to include Childcare Leave and Elderly Care Leave in most Tier 1 cities.
China's competitive talent market, particularly in Tier 1 cities, drives employers to offer comprehensive benefits packages that exceed statutory requirements. Learn more about our comprehensive benefits offerings.
For 2026, the most valued benefits are Commercial Health Insurance (to bypass public hospital queues) and Tax-Optimized Allowances for high earners.
China's work permit system has been modernized through the State Administration of Foreign Experts Affairs to attract international talent while maintaining regulatory control. The points-based system classifies foreign workers into A (top talent), B (professional), and C (general worker) categories. For comprehensive visa and work permit support, explore our visa services.
Recent improvements include streamlined online applications, clearer qualification criteria, and faster processing for qualified professionals and companies with good compliance records.
China's Foreigner's Work Permit (FWP) system classifies talent into three tiers. In 2026, the "Salary Route" remains the most efficient way to qualify for Category A or B without needing extensive documentation.
China's process is digitized under the Service System for Foreigners Working in China (FUWP). The process is split into two stages: "Pre-Entry" (Notification Letter) and "Post-Entry" (Final Permit & Residence).
China's immigration costs have dropped significantly for applicants from Hague Convention member countries (US, UK, EU, Australia), as expensive consular legalization is no longer required.
Note: The costs below distinguish between Government Fees (fixed) and Service Fees (variable).
China's termination framework provides strong worker protections through detailed procedures and compensation requirements. The Labor Contract Law specifies legitimate grounds for termination and mandates specific compensation based on circumstances and tenure.
Understanding China's complex termination requirements is essential for maintaining compliance while managing workforce changes in a highly regulated environment with significant employee protections.
China's Labor Contract Law is highly protective of employees. "At-will" employment does not exist. Termination requires specific statutory grounds, and procedural errors (e.g., firing for poor performance without a prior improvement plan) often result in the termination being ruled illegal, requiring reinstatement or double severance ("2N").
China requires specific procedures for different types of termination to ensure compliance with labor law protections and avoid costly disputes.
Mass layoffs (20+ employees or 10%+ of workforce) require additional procedures including government approval and worker consultation periods.
China's labor dispute system provides multiple resolution mechanisms with emphasis on mediation and arbitration before litigation.
The Labor Arbitration Committee provides cost-effective dispute resolution, though decisions can be appealed to People's Courts, creating potential for lengthy legal processes.
China's EOR provider market has evolved significantly, with both international platforms and specialized China-focused providers competing to serve the complex needs of companies operating in the world's second-largest economy.
Selecting the right EOR provider in China requires evaluating local regulatory expertise, government relationships, and operational capabilities in China's sophisticated yet complex business environment.
AYP Group leads China's EOR market through deep local expertise, guaranteed compliance, and comprehensive support tailored to China's complex regulatory environment and business culture. With extensive experience across China's major business centers and proven relationships with government agencies, AYP Group provides unmatched peace of mind for companies expanding into this critical market. Learn more about our transparent pricing structure.
AYP Group's China operations combine deep understanding of Labor Contract Law, social insurance complexities, and work permit requirements with culturally sensitive approaches that respect Chinese business practices and relationship-building traditions.
Remote offers EOR services in China through its global platform, providing standardized processes adapted for China's unique regulatory requirements. Remote's technology platform integrates with Chinese government systems for compliance reporting and social insurance management.
Deel provides EOR services in China emphasizing digital integration and streamlined processes for China's growing technology sector. Deel's platform offers automated compliance monitoring and multi-currency payroll capabilities.
Oyster HR delivers specialized EOR services with understanding of China's business culture and expansion strategies. Oyster provides bilingual support and cultural integration guidance for international teams working in Chinese business environments.
Globalization Partners offers enterprise-grade EOR services focused on large-scale deployments suitable for major corporations establishing significant operations across China's diverse regional markets.
China's complex regulatory environment requires EOR providers with proven expertise, government relationships, and cultural understanding essential for successful operations.
Regulatory expertise assessment involves evaluating provider knowledge of Labor Contract Law, social insurance variations across cities, and tax compliance requirements. Assess their ability to navigate changing regulations and maintain compliance across China's multi-layered administrative system.
Government relationship evaluation becomes critical given China's administrative requirements and the importance of maintaining good relationships with relevant authorities for smooth operations and problem resolution.
Cultural competency assessment involves understanding provider approaches to Chinese business culture, relationship-building capabilities, and ability to manage both local and international teams effectively within Chinese cultural contexts.
China's unique combination of rapid economic development and complex regulatory requirements demands careful planning, cultural sensitivity, and local expertise for successful EOR implementation.
Define hiring requirements clearly, including regional preferences, language capabilities, and cultural fit requirements. China's diverse markets require location-specific strategies and deep understanding of regional variations.
Research EOR providers thoroughly, focusing on regulatory expertise, government relationships, and cultural understanding. China's relationship-based business environment requires providers with established networks and proven track records.
China's hierarchical society values relationships, respect for authority, and long-term thinking. Understanding concepts like "guanxi," "mianzi" (face), and collective decision-making enhances workplace effectiveness and business success.
Provide comprehensive cultural orientation covering Chinese business etiquette, relationship-building practices, and communication styles. Offer benefits that accommodate Chinese cultural preferences including festivals, family obligations, and traditional celebrations.
Monitor compliance and relationship development through regular reviews, leveraging local expertise to maintain positive relationships with employees, government agencies, and business partners. Track cultural integration success and employee satisfaction indicators.
Plan for scalability while maintaining cultural sensitivity and regulatory compliance, considering long-term market development strategies that align with China's economic priorities and development goals.
AYP Group distinguishes itself in China's EOR market through guaranteed compliance, cultural expertise, and comprehensive support tailored to China's unique position as the world's second-largest economy and most complex business environment.
AYP Group distinguishes itself in China through our fully licensed Local Entity Model. Unlike providers who rely on third-party aggregators, we hold our own Labor Dispatch and HR Service Licenses, ensuring your team is legally employed by a compliant entity, not a gray-market agency.
AYP Group's China operations deliver complete employment lifecycle management through local expertise and culturally sensitive approaches that respect Chinese values while meeting international standards.
China represents the world's most significant business opportunity, combining massive market scale with sophisticated manufacturing capabilities and growing technological leadership. Companies that establish successful China operations gain access to unparalleled growth potential and strategic advantages.
China offers exceptional opportunities through its massive domestic market, advanced manufacturing capabilities, and growing technological sophistication. Success requires navigating complex regulations while building sustainable relationships and respecting cultural values.
Take the next step in your China expansion:
Our China team combines regulatory expertise with cultural sensitivity and relationship-building capabilities, ensuring your expansion succeeds from day one while building the foundations for long-term growth in the world's second-largest economy.
"AYP Group enabled our successful China market entry through their comprehensive EOR platform and deep local cultural expertise. Their transparent pricing and guaranteed compliance gave us confidence while their relationship-building guidance helped us establish strong partnerships with local stakeholders and government agencies."
--- Medical Device Company CEO, expanding from Germany to Shanghai
China's strategic importance and growth potential create exceptional opportunities for companies ready to establish operations in the world's second-largest economy. AYP Group's proven EOR platform eliminates complexity while ensuring cultural sensitivity and regulatory compliance.
Ready to unlock China's potential? Contact AYP Group today through our global office locations and discover how our comprehensive EOR services can accelerate your success in the world's most dynamic business environment.
AYP Group has been enabling successful China expansion for over a decade. Our China EOR services combine regulatory excellence with cultural expertise, ensuring rapid market entry with sustainable, relationship-focused operations.
Legal Disclaimer: This guide provides general information about Chinese employment regulations and EOR services. Specific legal advice should be obtained from qualified professionals. Employment laws and regulations are subject to change, and this information should not be considered as legal counsel. AYP Group maintains current regulatory knowledge and provides updates to clients as part of comprehensive EOR services.
An Employer of Record (EOR) in China assumes the legal responsibilities for employees, enabling your business to hire talent without the need to establish a local legal entity.
The cost of hiring through EOR services in China typically ranges from USD 400 to USD 800 per employee per month, depending on the specific services provided.
Using an Employer of Record (EOR) in China simplifies market entry and expansion backed by localized HR support, allowing you to focus on your core business while we handle HR management, compliance, and local regulations.
Several EOR service providers operate in China, including AYP. AYP offers comprehensive EOR solutions to help you hire, manage, and pay employees while ensuring full compliance, with no hidden costs for your peace of mind.
AYP’s onboarding process for employees in China includes:
AYP Employer of Record (EOR) in China has local support that ensure the employment practises align with the local laws, as such, the local EOR employees will have complete peace of mind to avoid any legal risks and penalties.
Also, our local HR support can provide a faster and seamless response for your local employees to have a better employee experience.
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