China is one of the fastest growing economies in the world and it is attracting an increasing number of investors and international entrepreneurs for starting their businesses in the country. If you are someone who are thinking of starting a business in China and hiring employees then you would need comprehensive information about different aspects related to hiring and managing employees.
The different options of hiring employees in China
Before you decide to hire employees in China it is essential to understand the different ways in which you can hire employees by staying within the legal framework.
The various legal ways of hiring in China include hiring employees without legal entity through PEO, hiring employees after forming the company – WFOE, hiring employees under representative office – RO, hiring employees in China via local partner or supplier. Let us have a brief look at some of these different methods of hiring.
Hiring employees without legal entity through PEO: Using PEO for hiring staff in China is one of the most convenient and quickest way for the foreign investors to start a company and build the team in the country.
The talent dispatch or employee outsourcing are the common terms that are used for PEO service. This means that the PEO company can act as an employer for employees that are selected and have worked for foreign companies.
The employment agency (PEO) such as JSC signs the contract of local employment with the employees and manages mandatory benefits, monthly payroll, expenses claim and social benefits.
The PEO agency is responsible for managing all the essential operations that the employer has to perform in China. Due to several complexities involved with the local laws of China, an experienced PEO agency will help you with the declaration of all the locals taxes and the benefits that are in accordance with latest policies in the areas where the employees are located.
There are various benefits of hiring employees through PEO including focus on the business, easy entry as well as exit in Chinese market, compliance, saving of time and money, avoiding the barriers of culture and language.
Hiring employees after forming the company – WFOE: If you want to hire employees in China then you need a local company as the employer. If you are confident of a long term investment in China then setting the WFOE is the ideal option for you before you decide to hire employees.
The creation of WFOE takes approximately takes 2 to 6 months for completion. The different business practices and procedures in China require different licenses and hence the whole process might take even longer. It is vital that you find an experienced and expert agency before setting up the company. You can visit jscgroups.com for more information on different aspects related to hiring employees in China.
Once you have started operating the WFOE, you must set up the company’s housing fund and social security accounts following which you can start recruiting the employees and managing their payrolls.
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