Expanding into China presents an exciting growth opportunity for Australian businesses, yet hiring local talent often becomes one of the greatest challenges. China’s labour laws are intricate, regional regulations vary significantly, and setting up a local entity can be both expensive and time-consuming. For many organisations, these hurdles delay market entry or lead to hiring missteps with long-term impacts.
Fortunately, there’s a far more efficient path that thousands of global companies now depend on: partnering with a China employer of record. If you’re finding it difficult to hire in China or simply want the fastest, safest, and most streamlined way to onboard local employees, an Employer of Record (EOR) can offer the ideal solution.
Why Hiring in China Is More Challenging Than Expected
Before discussing the benefits of an Employer of Record, it’s important to understand why China is such a difficult market for foreign employers.
Complex and Region-Specific Labour Laws
China has national employment regulations, but individual provinces and cities enforce additional rules. Employment contracts, mandatory social benefits, working hours, overtime calculations, and termination requirements all differ depending on location. For companies unfamiliar with these nuances, compliance becomes a minefield.
Mandatory Local Entity Setup
To legally hire staff in China, a business must typically register a local entity such as a Wholly Foreign-Owned Enterprise (WFOE). Setting up a WFOE can take several months and requires significant capital investment, local tax registrations, lease agreements, and ongoing administration. For companies testing the market, this is a major barrier.
Strict Termination Rules
Employee termination in China is heavily regulated. One mistake in documentation, notice periods, or severance calculations can expose an employer to legal disputes. Foreign companies often underestimate how rigid Chinese employment protection laws are.
High Expectations from Local Talent
China’s workforce, particularly in major cities, expects competitive benefits, reliable payroll, and strong compliance. Local candidates generally prefer to work with employers who already have a compliant presence in China, which creates additional pressure for foreign businesses.
What Is an Employer of Record (EOR) in China?
An Employer of Record is a third-party organisation that hires employees on your behalf in China. Your company manages the employee’s day-to-day responsibilities, while the EOR handles all legal, HR, and administrative aspects of employment.
This model allows you to hire local staff without establishing a Chinese entity, drastically speeding up your ability to start operating in the market.
An EOR in China typically manages:
- Employment contracts compliant with local laws
- Payroll processing
- Individual income tax filing
- Mandatory social insurance and housing fund contributions
- Employee benefits administration
- Local onboarding requirements
- HR compliance and ongoing support
- Offboarding and lawful termination
Why an Employer of Record Is the Easiest Solution for Hiring in China
Fast Market Entry
Instead of spending months setting up a WFOE, you can hire local employees in as little as two weeks through an EOR. This is ideal for companies looking to validate demand, launch sales activities, or hire local specialists quickly.
No Need for a Local Entity
An EOR acts as the legal employer, meaning you avoid the financial and administrative burden of establishing a Chinese company. This eliminates ongoing tax filings, office lease requirements, and entity maintenance.
100% Compliance with Chinese Labour Laws
With local experts managing employment contracts, social contributions, and statutory benefits, you significantly reduce the risk of fines or disputes. This peace of mind alone is a major reason why Australian firms choose EOR services.
Reduced HR Workload
Your team can focus on growth rather than navigating Chinese employment regulations. The EOR manages payroll accuracy, benefit payments, leave tracking, and more.
Better Recruitment Outcomes
Local candidates prefer employers who can provide compliant contracts and reliable payroll. Using an EOR boosts your company’s credibility and helps attract top talent in China’s highly competitive job market.
Cost-Effective Compared to Entity Setup
Entity establishment costs can exceed tens of thousands of dollars, not to mention annual operating expenses. An EOR eliminates these overheads, making it ideal for small and medium-sized Australian businesses.
Who Should Consider Using an Employer of Record in China?
An EOR is ideal for companies that:
- Want to test or enter the Chinese market quickly
- Need to hire remote staff or sales representatives
- Are unsure about long-term commitments
- Want to avoid the cost and complexity of a Chinese entity
- Need full compliance without expanding their HR team
If you’re planning early-stage operations or simply need one or two local employees, an EOR provides unmatched simplicity and flexibility.
Final Thoughts
Hiring in China doesn’t have to be overwhelming. While the country’s employment landscape is notoriously complex, an Employer of Record allows Australian businesses to expand with speed, confidence, and compliance. Whether you’re growing your sales presence, building a support team, or exploring new opportunities in the Chinese market, an EOR offers the easiest and most cost-effective path forward.
