With the second strongest consumer market in the world and an affordable workforce, China is an attractive option for startups and businesses wishing to expand into the Asian market. However, China has very stringent employment laws regulating the local and foreign labor force that often discourage foreign businesses from taking advantage of this market.
Fortunately, employee leasing in China offers the solution of bypassing these stringent guidelines and providing a competent local workforce.
What Is Employee Leasing in China?
Employee leasing in China is a legal arrangement in which a company’s staff is actually employed by another company. The second company is responsible for tasks such as:
- Paying the employee
- Handling social insurance deductions
- Handling housing fund accumulation
- Completing all payroll processing
- Deducting individual income tax
- Maintaining payroll data
- Handling human resource issues
The host company is then responsible for managing the day-to-day tasks.
Chinese law requires employee leasing companies to provide a minimum employment term of two years. Additionally, the leasing service is required to maintain a special license for this purpose.
What Are Professional Employer Organizations (PEO) in China?
A Professional Employer Organization in China is an agency that provides a service allowing an employer to outsource employee management tasks.
The PEO firm handles such tasks as employee payroll, work injury coverage, recruiting, training, development and employee benefits, depending on the agreement between the PEO agency and the client company.
The PEO becomes the official employer of the employee for the purposes of tax and other employment law matters. It then leases the employee back to the host company.
New Horizons is an established entity that is prepared to do business for a client company. We can get you a workforce on the ground in China within a few days in some situations.
You can skip the process to register your business or seek lengthy permits or licenses. Instead, you can have fully integrated human resources and administrative department incorporated into your foreign launch.
What Are the Advantages of Using Employee Leasing or PEOs?
Many startup companies and companies wishing to expand into the Asian market are daunted by the extra administrative tasks associated with this type of development. It is often cumbersome to manage payroll, benefits and other human resources issues, especially when these matters are coupled with complex immigration and employment laws.
Employee leasing and PEOs in China provide a seamless approach that allows you to have a dependable and viable workforce without having to deal with all the hassles of having employees.
Using PEOs and leasing employees in China allows companies to emerge into new markets while focusing on expanding their enterprise.
New Horizons is the leading PEO in China and throughout Asia. We assist employers who do not want to hire a local workforce in China or who do not have an entity in China. We handle all the administrative and legal hassles associated with hiring foreign staff.
We simplify your global expansion by providing the following services:
- Recruiting and hiring a talented team
- Drafting and preparing employment contracts that comply with Chinese employment law
- Completing onboarding services
- Supervising migration services
- Setting up a payroll system
- Making appropriate employment deductions for social charge contributions, housing
- accumulation and payments to third parties
- Making payroll calculations for taxes, benefits and expenses claims
- Managing expenses claim declaration and reimbursement
- Managing employment benefits
- Complying with tax laws and payments to third parties
- Providing tax and payment records to employers and employees
- Providing day-to-day guidance regarding Chinese labor laws and regulations
- Handling all termination procedures
Employee leasing in China allows your company to expand into this important market without needing to establish a legal entity in the country. We also ensure payroll compliance and minimize employer liability.
New Horizons has a breadth of knowledge regarding Chinese employment laws and labor regulations. We handle human resources functions so that your resources are freed up for more important tasks.
Small and medium-sized companies like this approach because it allows them to focus on the operations of their business.
However, large enterprises also like to use employee leasing and PEOs in China because it allows them to set up multiple offices and branches in numerous jurisdictions without having to invest too much time or money into a completely new workforce.
Contact New Horizons Global Partners to Learn More About Employee Leasing in China