How to stay compliant

Employer-of-Record (EOR) in China: Do You Need One?

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How to stay compliant

Employer-of-Record (EOR) in China: Do You Need One?

So you want to hire someone in China. Problem is, your company is located somewhere else.  

If you’ve done some research, you’ve probably been told you should be using an Employer-of-Record (EOR). Why? Well, if your company isn’t located in China, using an EOR can help you bypass the traditional obstacles to hiring full-time employees.  

But there’s a catch: EOR solutions in China are expensive—usually at least $500 per month per employee—and can take time to set up. And because you’re complying with a different set of labor laws, logistics and benefits can end up costing you lots of time and money. While they will save you time from setting up your own entity, they’re rarely cheap or fast.

The good news? There’s another way to hire remote workers in China, and it doesn’t involve forking out huge amounts of money for an EOR.  

The solution: Hire your teammates in China as contractors. If you’re hiring remotely and your teammates have autonomy, there’s a good chance you can make compliant contractor hires. You still have to use locally-compliant contracts, but the process is a lot easier, more affordable, and faster.

We built Thera to help you make contractor hires, in 150+ countries (like China). So you can hire the people you want on your team, without paying thousands for an EOR. You can get set up in a couple of clicks—and you’ll only pay $49 per contractor per month.  

It’s just as easy as it sounds. No catch. Here’s what Thera looks like vs. an EOR in China:

Everything you should know about using an EOR in China

Are you a business owner or manager considering hiring independent contractors in China? If so, you may be wondering about the legal and regulatory conditions specific to the country. In this post, we'll break down what you need to know about using an EOR (Employer of Record) in China and why hiring an independent contractor might be easier.

What is an EOR?

An EOR is a third-party company that acts as the legal employer of your workers. This means that the EOR takes care of all the legal and administrative tasks related to employment, such as payroll, taxes, and compliance with local labor laws. As the client company, you still manage the day-to-day work of your employees, but the EOR takes care of all the legal and administrative tasks.

Why use an EOR in China?  

Using an EOR in China can be a good option for companies that want to hire employees quickly and easily without establishing a legal entity in the country. This can be especially useful for small or medium-sized companies that don't have the resources to set up a legal entity in China. An EOR can also help companies navigate the complex legal and regulatory environment in China, which can be challenging for foreign companies.

Legal and regulatory conditions in China

China has strict labor laws and regulations that companies must comply with when hiring employees. For example, companies must provide social insurance and housing fund contributions for their employees, and must comply with minimum wage and working hour regulations. Failure to comply with these regulations can result in fines and legal penalties.

When using an EOR in China, it's important to choose a reputable company that has experience working in the country and can ensure compliance with local labor laws and regulations. It's also important to understand the costs associated with using an EOR, as these can vary depending on the company and the services provided.

Should you skip the EOR and hire independent contractors?

While using an EOR can be a good option for some companies, hiring an independent contractor may be easier and more cost-effective in certain situations. Contracting agreements are often simpler than employment agreements, and it’s almost always faster & cheaper to get onboarded with a contractor. Plus, independent contractors tend to be responsible for their own taxes and social insurance contributions, which can simplify the hiring process for companies.

What if I accidentally misclassify my contractors?

We’ve got two pieces of good news for you. For one, if you’re hiring remotely, it’s unlikely you’ll misclassify your contractors. Many of the things that qualify people as employees, such as company equipment and set working hours, don’t typically apply to remote work.

Still, it’s helpful to have the comfort of knowing you’re not at risk for misclassification. That’s why, at Thera, we’ve launched Misclassification Assurance: so you can hire contractors abroad, worry-free. Learn more about hiring with Thera below.

Hiring contractors? Thera can save you a ton of time

If you’re hiring contractors, you’re probably spending too much time on their payroll, contracts, and tax documents. Which is why we built Thera, which saves you 90% the time you spend on contractor paperwork each month.

With Thera, you can compliantly hire your contractors in 150+ countries, onboard them in minutes, and pay them all at once (in a click). It’s global contractor payroll, finally simplified.

Sound interesting? Click here to book a demo and see the platform firsthand

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