Employer of Record in China

A mainland China EOR hire depends on the named Chinese employer, the worker's role and, for labour dispatch, the licensed agency and using unit. A registered foreign-enterprise resident representative office is exempt from dispatch role and workforce-share limits, but that exception gives no general hiring route to an overseas company without registered local presence. Compare direct employment with independent contracting; for genuinely independent services in China, 4dev.com's Contractor Platform supports contractor relationships.

What an employer of record does in China

In an employer of record arrangement, the worker signs a labour contract with a named Chinese employing party while the client directs the work. That party may be the client's registered Chinese employer or a licensed labour-dispatch agency; a registered foreign-enterprise resident representative office can be the using party in dispatch. Ask which route supports the hire before relying on the provider's EOR description.

Is an employer of record legal in China?

Legality depends on the named employer, the using party and the role. Ask the provider which Chinese employment or dispatch structure supports the hire.

Which structure is the provider proposing?

Proposed structure	Employing or using party	Conditions to check
Own registered China employer	The registered Chinese company employs the worker directly.	Confirm that the named Chinese entity will sign the labour contract and carry the employer obligations.
Licensed labour dispatch	The dispatch agency employs the worker; the client-side local operation is the using unit.	Confirm the agency's licence, the actual using unit, the permitted role and the workforce-share calculation.
Registered foreign-enterprise resident representative office using dispatch	The dispatch agency remains the employer and the registered representative office is the using party.	Confirm the office's registration and the dispatch arrangement. Its exception covers the dispatch role-type and workforce-share limits only.

The dispatch tests

Under the general dispatch rules, a using unit may use dispatched workers only in temporary, auxiliary or substitute roles. A temporary role lasts no more than six months, and dispatched workers may not exceed 10% of the using unit's workforce. The dispatch agency must sign the dispatched worker to a written labour contract of at least two years.

A registered foreign-enterprise resident representative office using dispatched workers is exempt from the role-type and 10% proportion limits. It still needs a licensed dispatch agency and the agency's written employment contract. The exception does not extend to a foreign company without registered local presence.

Check the dispatch licence and the employing entity

For a dispatch proposal, verify the agency that will employ the worker. Operating a labour-dispatch business requires an administrative licence and at least CNY 2 million in registered capital. The licence lasts three years, and the agency must request renewal 60 days before expiry.

Shanghai's labour-dispatch licence publication portal provides a starting point for the local check, but the landing page does not establish that a particular provider holds a licence. Request the licence number, legal-entity name, locality, scope and expiry date; compare them with the party named in the worker's labour contract and ask the provider to identify the using unit in writing.

Who signs and manages each relationship?

The named Chinese employer or dispatch agency signs the worker's labour contract and handles employer-side registration. The client can direct the work under the agreed arrangement. Documents should identify the legal employer and, in dispatch, the using unit.

Relationship or task	Client	Local employer or dispatch agency	Employee
Client-provider agreement	Signs the commercial or dispatch agreement and identifies the work required.	Signs the agreement and identifies the employing entity and, where relevant, the using unit.	Is not a party to this agreement.
Written labour contract	Confirms that the contract party matches the proposed structure.	Signs the worker's written labour contract; in dispatch, the agency contract must be at least two years.	Signs the labour contract with the named employer.
Day-to-day work	Gives operational direction within the agreed arrangement.	Remains the legal employer or dispatch agency; records should distinguish it from the using unit.	Performs the agreed role.
Social-insurance registration	Checks which entity will make the registration.	Applies for the employee's registration within 30 days after employment starts.	Supplies the information needed for the process.
Confidentiality and IP documents	Checks that the required documents identify the right parties and work output.	Confirms which employment or service documents it signs and maintains.	Signs the documents that apply to the engagement.

If several related entities are involved, document which one employs the worker, which manages the work, and how the worker's roles, remuneration and benefits are arranged.

This can avoid the potential legal risks that all related companies become jointly liable for the employee in case of a labor dispute.

— Yuanyuan Zhang, Associate, and Jeanette Yu, Senior Consultant, CMS China

The observation concerns staffing across related companies; it does not determine liability in every EOR arrangement.

Hiring through a China EOR, step by step

The structure, local employing party and candidate's status need checking before work starts. The statutory deadlines begin later and do not establish a universal onboarding period.

From structure review to first day

Step	Owner	Verified timing or dependency
Confirm the route	Client and provider	Identify the Chinese employing party, the using unit, work locality and whether the proposal is direct employment or labour dispatch.
Test a dispatch proposal	Provider and named using unit	Confirm the agency's licence, the role type and any applicable workforce-share limit before work begins.
Check the candidate's status	Named employer and worker	Establish the identity and work-status documents required for the chosen structure.
Put the commercial and employment documents in place	Client, provider, named employer and worker	The agreements should identify the contract parties, the work arrangement and the responsible employing entity.
Set the contract term and probation	Named employer and worker	A probation period can reach six months only on a fixed-term contract of at least three years or an open-ended contract; shorter terms have lower or no limit.

Deadlines after work begins

Once work starts, the employer must conclude a written labour contract no later than one month later and apply for social-insurance registration within 30 days. These are separate deadlines; neither measures the time needed for the pre-start checks.

If the candidate is a foreign national

For a candidate entering on a Z visa and applying for a work-class residence permit, the application requires proof of work permission and a letter from the employing unit. Where the visa requires a residence permit, the worker must apply within 30 days of entry. This entry-based deadline is separate from the domestic work-start deadlines and does not establish that every provider can obtain work permission.

What a China EOR costs, line by line

For a Shanghai hire, budget gross salary, statutory employer additions, a separately quoted provider fee and optional benefits. The July 2026 figures below model Shanghai costs; they are neither a national EOR price nor an all-in provider quote.

Shanghai's fixed employer social-insurance rates are 16% for pension, 9% for medical and maternity insurance through February 2027, and 0.5% for unemployment insurance: 25.5% in total. That subtotal excludes work-injury insurance, whose industry base rate ranges from 0.2% to 1.9% and can vary, and the ordinary housing-fund election of 5%, 6% or 7%. The CNY 12,577 component example assumes a Class I 0.2% work-injury rate and a chosen 7% ordinary housing-fund rate.

Five Shanghai cost examples

All five examples use those Class I injury and 7% housing assumptions. They exclude provider fees, bonuses, voluntary or supplemental benefits and employer-specific levies. Annual totals represent twelve ordinary months on the same basis.

Shanghai salary input	Gross / month	Employer additions	Total / month	Total / 12 months	Pension	Medical/maternity	Unemployment	Injury	Housing
Minimum-wage illustration	¥2,740.00	¥2,131.12	¥4,871.12	¥58,453.44	¥1,207.36	¥679.14	¥37.73	¥15.09	¥191.80
Three-area manufacturing survey: information and communications engineer, 2024 median	¥10,716.00	¥3,504.13	¥14,220.13	¥170,641.56	¥1,714.56	¥964.44	¥53.58	¥21.43	¥750.12
Shanghai 2025 all-calibre average wage	¥12,577.00	¥4,112.68	¥16,689.68	¥200,276.16	¥2,012.32	¥1,131.93	¥62.89	¥25.15	¥880.39
Three-area manufacturing survey: electrical engineer, 2024 75th percentile	¥15,079.00	¥4,930.84	¥20,009.84	¥240,118.08	¥2,412.64	¥1,357.11	¥75.40	¥30.16	¥1,055.53
Contribution-ceiling illustration	¥37,731.00	¥12,338.04	¥50,069.04	¥600,828.48	¥6,036.96	¥3,395.79	¥188.66	¥75.46	¥2,641.17

The two role inputs are one-twelfth of observations from a 2024 manufacturing survey covering Shanghai Qingpu, Jiangsu Wujiang and Zhejiang Jiashan. Shanghai contribution rates are applied only for illustration; these are not Shanghai-wide software salaries.

Why two lower bases change the bill

Shanghai's social-insurance floor is ¥7,546 and its ordinary housing-fund floor is ¥2,740; both use a ¥37,731 cap. At the minimum-wage illustration, the social-insurance components therefore use the higher ¥7,546 base while housing uses ¥2,740. At the contribution-ceiling illustration, both reach ¥37,731. Ask a provider to state the city, work-injury classification and housing-fund election alongside gross salary.

Where the China EOR model reaches its limits

The arrangement depends on the actual Chinese employer and using unit. Check role, quota, licence, contract and work-permission conditions against that structure; an EOR label does not resolve a gap in any of them.

Duration, role and dispatch structure

Six months defines a temporary dispatch role, while the agency's written employment contract must run for at least two years. Neither period is a universal EOR maximum. Under the general dispatch rules, only temporary, auxiliary or substitute roles qualify, and dispatched workers may not exceed 10% of the using unit's workforce.

For a registered foreign-enterprise resident representative office, the role-type and proportion limits do not apply. The agency licence and written employment contract still do.

Control, permanent establishment and foreign nationals

Review who supervises the worker, signs commercial deals, commits the business locally and maintains a local presence. Those facts bear on the proposed structure and any permanent-establishment assessment; do not infer a numerical threshold from an EOR contract.

For a foreign national, establish which unit would employ the person before relying on a provider's work-permission claim. The Z-visa residence-permit documents described above do not by themselves establish eligibility or sponsorship.

IP, confidentiality and non-compete

Ask which agreement secures rights in the work, which party receives confidential material and what restriction is proposed after the engagement ends. For commissioned copyright work, ownership follows the client–creator agreement; without a clear agreement, copyright remains with the creator. A transfer of copyright economic rights requires a written contract that identifies the work, transferred rights, territory, price, payment arrangements and liability.

Those commissioned-work rules do not determine employment-IP ownership. Check employment IP, confidentiality and any proposed non-compete against the actual employer, worker and work product; the EOR structure alone does not settle their terms.

Exit, penalties and changing employers

The named employer must apply the termination rule that fits the reason. For statutory no-fault termination, it gives 30 days' written notice or one month's extra wage; Article 39 separately covers listed serious-fault grounds. Statutory economic compensation is one month's average wage per full service year; a remaining period of six months to less than a year counts as a full year, while a shorter period earns half a month's wage. If the worker's wage exceeds three times the prior-year local average, that triple average caps the compensation wage base and no more than twelve years of service are payable.

Collective redundancy of at least 20 workers, or fewer than 20 but at least 10% of the workforce, has a separate 30-day explanation and reporting process. Failure to sign a written contract after the first month and before one year triggers double monthly wages, while unlawful termination triggers twice the statutory economic-compensation amount when reinstatement is not pursued or possible. Before moving a worker to another employer, review the contract chain, service history and required consents rather than assuming an automatic transfer.

When you do not need an EOR in China

If your registered Chinese entity can employ the worker directly, or the work is genuinely an independent service, an EOR may be unnecessary. The entity, working relationship and documents determine which route fits.

A foreign-invested Shanghai company can use its own Chinese entity as the employer. The registration application requires the company form, articles of association, shareholder-qualification documents and lawful-domicile documents; Shanghai's integrated startup portal combines company registration, seals, tax matters and the employee social-insurance application. See hiring in China for the wider entity-setup and employer obligations.

A registered foreign-enterprise resident representative office can instead use dispatch without the role-type and proportion limits. The licensed agency remains the employer and signs the worker's written employment contract. That exception gives no general direct-employment permission to a company without registered local presence.

Independent contracting can fit when the service is genuinely independent in practice. A written service agreement or individual-business registration does not settle the status: the authorities and courts assess actual management, including control over time and workload, work rules, discipline, continuity and price-setting. Where the organisation manages paid work under its rules and that work forms part of its business, an employment relationship can exist even without a written employment contract. The China contractors guide covers the status, contract and invoice questions for that route.

Alternatives for a China hire

Choose a route based on who legally employs or contracts with the person, the work they perform and the local footprint needed.

Route	Who employs or contracts	When it fits	First constraint to check
Own registered Chinese company	The registered Chinese entity employs the worker directly.	Ongoing direct employment and local operations justify establishing an employer.	The entity application, local domicile and employer-registration steps.
Licensed labour dispatch	The dispatch agency employs the worker; the Chinese operation or representative office is the using unit.	The actual role and using-unit arrangement meet the dispatch conditions.	Agency licence, role type, workforce-share limit and the agency's written labour contract.
Registered foreign-enterprise resident representative office using dispatch	The dispatch agency employs the worker; the registered representative office uses dispatched labour.	The office already has the required registered presence and uses the dispatch route.	The exception removes only the role-type and proportion limits; it does not waive agency licensing or the employment contract.
Genuine independent service contract	The contractor or the contractor's registered business contracts for services.	The person retains genuine independence over the working relationship.	Actual control, work rules, continuity and price-setting, rather than the contract label or registration alone.
PEO or payroll outsourcing	The existing employer remains the employer.	Administrative support is needed for a workforce already employed through a valid structure.	The agreement must identify the existing employer; an outsourcing label does not itself create an employing route.

Shanghai's integrated startup path combines company registration, seals, tax matters and the employee social-insurance application. It supplies no nationwide setup time or cost.

How to choose a China EOR provider

Ask for documents identifying the Chinese employer, any using unit and the proposed route. Check the answers against the applicable dispatch, employment, contribution and work-permission conditions.

• What is the full legal name, locality and registration of the Chinese company that will sign the worker's labour contract?
• Is the proposal labour dispatch? If so, provide the agency's licence number, legal-entity name, locality, scope and expiry date, and identify the party that will sign the employment contract.
• Which entity is the using unit, what role will the person perform, and how does the provider assess the temporary, auxiliary or substitute-role rule and the applicable workforce-share limit?
• Who signs the written labour contract, who applies for social-insurance registration, and how will the employer meet the one-month contract and 30-day registration deadlines? For dispatch, provide the agency contract that meets the at-least-two-year requirement.
• Which city and assessment bases are used in the quote? In Shanghai, ask for the social-insurance base, work-injury classification and actual rate, plus the ordinary housing-fund election, rather than accepting a single percentage.
• If the candidate is a foreign national, which named employing unit provides the letter for the work-class residence-permit application, and what work-permission evidence applies? The answer should distinguish the conditional Z-visa and residence-permit documents from any general claim of sponsorship.
• Does the quote separate gross salary, statutory employer additions, provider fee and optional benefits? Request the assumptions and exclusions in writing.
• Which agreement covers IP, confidentiality, data handling, termination and a later move to another employer? Ask how the documents identify the parties, work product, exit steps and any required consents.

Questions people actually ask

Is using an employer of record legal in China?

It can be, if the named Chinese employing or dispatch structure satisfies the rules that apply to it. A provider's EOR label does not determine the route: general dispatch is limited to temporary, auxiliary or substitute roles and a 10% using-unit cap, while a registered foreign-enterprise resident representative office has a narrow exception from those two limits.

Can a US company hire a China employee without opening a local entity?

Not through a general permission created by an EOR label. A registered Chinese employer can hire directly, while a registered representative office has a limited dispatch exception; a foreign company without registered local presence needs a structure-specific route rather than an assumption of direct employment.

Does a China EOR need a labour-dispatch licence?

Where the proposed route is labour dispatch, operating the dispatch business requires an administrative licence and at least CNY 2 million in registered capital. The licence is valid for three years, with a renewal request due 60 days before expiry; ask for the licence details and match them to the named employing entity.

What does a Shanghai EOR employee cost?

At ¥12,577.00 gross per month, the bounded Shanghai example has ¥4,112.68 in employer additions, a ¥16,689.68 monthly total and ¥200,276.16 over twelve ordinary months. It uses a Class I 0.2% work-injury rate and a 7% ordinary housing-fund election, and excludes provider fees, bonuses, voluntary benefits and employer-specific levies.

How quickly can a China employee start through an EOR?

Start time depends on the structure, licence, role, documents and candidate's status. Once work starts, the written labour contract is due no later than one month after the start date and social-insurance registration within 30 days.

Can an EOR sponsor a foreign national's work permit?

Sponsorship depends on the actual employing unit and the candidate's permission. A work-class residence-permit applicant entering on a Z visa needs proof of work permission and a letter from that unit. If the visa requires a residence permit, the application must be made within 30 days of entry.

Is every dispatch assignment limited to six months?

No. Six months defines a temporary dispatch role, while the dispatch agency's written employment contract must be at least two years; neither figure is a universal EOR maximum. The role, using unit and any applicable dispatch conditions still need review.

What happens if I later hire the worker through my own China company?

Review the existing employment and provider contracts, service history and required consents before a move. Do not assume the worker automatically transfers to the new employer.

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