China Payroll
How to Pay A Chinese Employee Without A Chinese Legal Entity

How to Pay A Chinese Employee Without A Chinese Legal Entity

International companies are eager to hire their 1st Chinese employee to improve their supply chain, product development or vendor management. Many of them don’t know where/how to start.

China does not allow the hiring of independent contractors without a legal entity registered in China. If an individual is performing employment-like services for you in China, that person is your employee and the employer must comply with all Chinese laws that go along with an employment relationship.

Some international companies hire the Chinese “employee” directly and wire the paycheck to that individual every week or month. The risk is high for both the employer and the individual. The employee is at some point going to explain to the Chinese authorities why he or she regularly receives foreign deposits and why they might not pay any taxes on this. And the company will be forbidden to do business in China if such violation is found.

Without spending a fortune and going through all the legal paperwork to set up a Chinese entity (WOFE, JV or Rep office), the fast and risk free employment solution is to have the proposed employee hired by a Chinese local professional staffing company (A) and pay the employee through the company A.

Hiring a Chinese employee through a professional staffing company can help the international employer handle:

  • Payroll and Benefits
  • Contracting and on-boarding
  • Personal tax calculation and withholding
  • Cash distribution
  • Business expense reimbursement
  • Labor law advice
  • Misc. HR issues

The advantages of using China Payroll services:

  • Solve your HR headache and save your time
  • Out of trouble with local Chinese law and labor regulation
  • Save employee’s time and energy handling his/her payroll
  • Add a useful broker (custodial) between you and employee
  • Speed up your China operation with minimal spending and risk

Contact us now to get more information about how to pay an employee in China.