The People’s Republic of China is increasingly being sought after because of its strong economy, making it one of the world’s most attractive countries for business. This has caused an infusion of companies attempting to enter its market. However, Chinese business and employment laws are some of the most stringent in the world, creating substantial obstacles to businesses that could otherwise thrive from the effective market.
It can be extremely difficult to establish a foreign entity in China and to comply with the complex immigration laws.
Professional staffing companies fill in the gap by allowing foreign businesses to establish a workforce in the country without having to overcome the obstacles imposed by the government. They provide many valuable benefits to businesses seeking to launch in new markets like China or to send contractors abroad.
Role of Professional Employer Organizations
A Professional Employer Organization, or PEO, is a staffing company that provides employment services to other businesses.
It is the Employer of Record and responsible for compliance with all applicable laws, taxes, insurance and mandatory benefits. It handles payroll processing, human resources management, and benefits administration. Through employee leasing, the company is still able to maintain day-to-day control over employees and determine their wages, hours and job duties.
PEOs assist small and medium-sized businesses, as well as foreign startups. There are currently more than 150,000 small businesses that use PEOs.
Using a PEO allows a foreign company to launch a business in a new country and establish a presence in China without having to make a substantial investment in establishing a Wholly Foreign-Owned Enterprise.
Benefits of Hiring a PEO in China
Hiring a China-based PEO directly rather than a PEO brooker provides many benefits. The onsite PEO can handle the following tasks on behalf of foreign companies and their strategic expansion abroad:
Complete Payroll Management
We set up payroll for all employees and complete all necessary calculations. We make payments to employees and third parties. Payroll calculations and mandatory benefits are different in each city in China, so we can expertly make these calculations for you. We complete all local payroll runs and make payments based on your employment agreement.
We draft and prepare all labor contracts. We also assist with all onboarding actions. We can also help recruit talent in China on your behalf.
Knowledgeable Tax Compliance
We can assist with all aspects of individual income tax for Chinese employees, including social charges and tax compliance, annual tax declarations and expenses claim declaration and reimbursement.
Efficient Benefits Administration
Because the PEO is considered the Employer of Record, small businesses can benefit from the preferred rates for insurance and other benefits offered by a larger PEO and pass these benefits on to their employees.
This allows small and mid-sized businesses to become more competitive in the global market. We manage employment mandatory benefits and assist with all human resources tasks related to these benefits, including assisting with leave and holidays management and workers’ compensation benefits.
Specialized Legal Matters
We can provide legal services for your workforce. We can also help you hire a qualified team in China while remaining compliant with complex immigration and visa laws. We also offer global entity solutions for your workforce if you would like to integrate your business directly into the Chinese market.
More PEO’s Benefits
Additionally, hiring a China PEO allows a business to realize the following benefits:
- Focus on operations – Use of localized knowledge to provide important compliance and complete administrative tasks in an efficient manner. Businesses do not have to familiarize themselves with these complex rules, allowing them to save time and money that they can use to focus on their business operations.
- Risk mitigation – Allows a business to minimize liability. The PEO is the employer of record and is responsible for all compliance matters.
- Standardized policies – Utilize and standardize HR policies and practices to better help minimize liability and benefit your employment structure.
- Guidance – Extensive resources and knowledge in Chinese employment, immigration and business law. We can provide important training and educational information to create a seamless transition into the Chinese market.
- Minimal investment – Allows a business to launch in a new market without having to invest in the infrastructure of establishing a complete business in the country. It also minimizes the amount of time and resources that must be provided to make this expansion.
Common Reasons to Use a China PEO
While many businesses realize the distinct advantage of outsourcing payroll and human resource tasks, there are a few types of businesses that prefer to use the holistic services offered by a China PEO like New Horizons Global Partners, including the following:
- Expand into the Chinese market and hire local staff to complete early market research and exploration;
- Hire local staff but not invest in a wholly foreign-owned enterprise;
- Complete occasional business matters, such as having client meetings or vendor management who do not want a large investment in a separate entity;
- Optimized ground operations with local staff;
- Base an overseas-based contractor in China or assist with limited projects;
- Use local talent but not have to deal with the complexities of expatriate work or travel visas;
- Help through local staff with the establishment and registration of a new entity.
Why Choose New Horizons Global Partners
As Asia’s leading Employer Organization, New Horizons Global Partners handles all necessary procedures to legally hire and onboard staff. We provide full employment services to manage your staffing needs and manage a team in China so you can concentrate on your primary business operations.
Our global workforce expertise allows businesses to recruit and hire talent in any country.