Hiring in China

The contract sets out role, salary in CNY, work location, working hours system, social insurance and any non-compete. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Chinese is the language labour authorities and arbitrators work in, so most EORs issue bilingual contracts with the Chinese text usually prevailing. Missing the one-month deadline exposes the employer to double wages.

Fixed-term contracts are the norm, but after two consecutive fixed terms or 10 years of service the employee can usually insist on an open-ended contract. Foreign employees are limited to fixed terms of up to five years.

Set probation from day one. Only one probation period is allowed per employee, it cannot run past the cap for the contract term, and pay during it must be at least 80% of the agreed salary.

Dismissal during probation still needs evidence that the employee failed written hiring criteria, and the EOR, not you, carries that risk. Agree the criteria before you agree a start date.

Overtime is paid at 150% on workdays, 200% on rest days without time off in lieu and 300% on public holidays, with a cap of 36 hours a month.

Seniority does not remove the entitlement. Flexible and comprehensive hours systems need approval from the local labour bureau, so put the hours system in the contract and ask whether the EOR holds the approval it relies on.

Multinationals commonly give more than the statutory floor, so check what the market expects for the role when you budget. Leave the employer fails to arrange is paid out at 300% of the daily wage, and the national annual leave rules are under revision to tighten enforcement.

Sick leave runs as a protected medical treatment period of 3 to 24 months by service, with sick pay set locally but never below 80% of the local minimum wage. Maternity leave is 98 days nationally and most provinces extend it to 128 days or more, funded by maternity insurance with an employer top-up in some cities, so confirm which side the EOR carries.

Every dismissal must fit a statutory ground, such as serious misconduct or proven incompetence after training or reassignment. Unlawful termination costs double severance, and for high earners the monthly figure is capped at three times the local average wage, counted for up to 12 years.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, unused leave, a termination certificate and the social insurance transfer. Most exits end in a mutual termination agreement, so budget for a package above the statutory minimum.

Supplementary commercial medical cover, annual health checks and a 13th-month salary paid before Chinese New Year are standard for professional roles even though they are not mandatory.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Employer contributions add roughly 30% to 40% on top of gross salary, depending on the city and capped at its contribution ceiling. That is before the EOR fee.

Social insurance opt-outs are the trap. Since 1 September 2025, any agreement to waive contributions is void, and an employee can resign over unpaid contributions and still claim severance, so check that the EOR contributes on the correct salary base from the first month.

Ask whether the EOR employs through its own licensed entity or dispatches through an agency. A labour dispatch provider usually cannot sponsor at all, because foreign nationals may not be dispatched, and the role must fall within the sponsor's business scope.

Permits are graded A, B or C on a points system that weighs salary, education and experience. Set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. Transfers abroad that are genuinely needed for HR management have been exempt from the security assessment and standard contract filing since 2024, but employee notice, a lawful basis and an impact assessment still apply.

Ask where payroll data is hosted and who in the partner chain can see it.

Setting up a wholly foreign-owned enterprise often takes 3 to 6 months, and the running cost is the point: a legal representative, a registered office, registered capital paid in within five years, monthly tax filings and a mandatory annual audit set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.