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China PEO – Professional Employer Organization

China Professional Employer Organization (China PEO)

In this article

China PEO – Professional Employer Organization
What is a China PEO?
What are the benefits of engaging a China PEO?
How China PEOs Work
Top 5 leading China PEOs
Engage a China PEO — our take
FAQs

Key points

  • A China Professional Employer Organization (China PEO) is a company which specialize in payroll, HR and benefits administration support for international companies hiring in China.
  • A China PEO may operate only in the China market, or they may be part of an international PEO company with operations in China. 
  • When choosing a China PEO it is important to choose a provider with extensive knowledge of China employment laws and market conditions. 

In today’s fast-paced global business landscape, organizations seeking to expand into new markets face numerous challenges. One such hurdle is navigating the complex intricacies of human resources, compliance, and employment regulations. This is where China Professional Employer Organizations (PEOs) come into play, providing a valuable solution for businesses venturing into the Chinese market. Here, we explore what China PEOs are, outline their benefits, and shed light on how they function.

What is a China PEO?

A China Professional Employer Organization, also known as a China PEO, is an entity that acts as an outsourced employer for foreign companies operating in China. It enables foreign businesses to establish a presence and hire employees in China without establishing their own legal entity or navigating the complexities of Chinese employment laws, labor contracts, and payroll systems.

Often the term China PEO is used interchangeably with the term ‘China Employer of Record’ or ‘China EOR’. A China EOR is a company in China that becomes the legal employer of your team based in China, while the team continue to work under the operational direction of your company. Usually, a China PEO offers China EOR services, and vice versa. 

A China PEO may operate just in China (that is, being a China domestic PEO), or they may be a global PEO with operations throughout the world, in addition to China. 

What are the benefits of engaging a China PEO?

Compared to the standard option of opening a legal entity in China, engaging a China PEO has a range of benefits: 

  • Simplified Market Entry: China PEOs provide a streamlined process for foreign businesses to enter the Chinese market swiftly. They eliminate the need for establishing a legal entity, setting up payroll systems, or registering for various licenses and permits.
  • Compliance and Risk Management: Compliance with Chinese employment laws can be challenging for foreign companies. China PEOs possess in-depth knowledge of local labor regulations, ensuring adherence to legal requirements, minimizing risks, and avoiding costly penalties.
  • Local HR Expertise: PEOs in China offer access to local HR professionals who possess a deep understanding of Chinese employment practices, cultural nuances, and labor market conditions. They provide guidance on hiring, onboarding, compensation, benefits, and employee relations.
  • Payroll and Benefits Administration: China PEOs handle payroll processing, including salary calculations, tax withholdings, and social security contributions. They also manage employee benefits, such as insurance, retirement plans, and leave management.
  • Flexibility and Scalability: PEOs allow businesses to quickly scale their operations in China. Whether expanding or downsizing, PEOs offer the flexibility to adapt to changing business needs without the administrative complexities associated with internal restructuring.

How China PEOs Work

  • Employment compliance: Generally, a China PEO will become the legal employer of the foreign company’s workforce in China. This is achieved through an employer-of-record relationship, where the PEO assumes responsibility for compliance with local labor laws, employment contracts, and payroll obligations.
  • HR and Administrative Support: China PEOs provide a range of HR and administrative services, including recruitment assistance, onboarding, employment contract management, payroll processing, tax reporting, benefits administration, and statutory compliance.
    Workforce Management: While the foreign company retains control over day-to-day operations, including job assignments, performance management, and work responsibilities, the PEO ensures compliance with local labor regulations, manages payroll and benefits, and handles employee-related administrative tasks.
  • Transparent Communication: Effective communication and collaboration between the foreign company, its employees, and the China PEO are essential for smooth operations. Open lines of communication ensure that HR matters, policy changes, and employee concerns are addressed promptly and accurately.

Top 5 leading China PEOs

When hiring employees in China it is crucial that you choose a PEO with deep knowledge of employment laws in China, as well as local market conditions. Here is our top 5 list of China PEOs:

  1. Horizons (also known as ‘New Horizons Global Partners’) is a globally recognized PEO, with a regional headquarters in Shanghai. Horizons offers comprehensive China HR solutions, they are known for their expertise in recruitment, payroll, and compliance. Find out more about their offerings in our 2023 Horizons PEO review. 
  2. Deel is a global PEO and HR platform that recently initiated operations in China. Deel offers a wide array of services, including HR management, payroll processing, legal compliance, and employee benefits administration through a market-leading SaaS platform. Read more about Deel’s hiring solutions in our 2023 Deel HR review. 
  3. INS Global is a China-focused PEO with an extensive understanding of the local market. INS Global (also known as ‘INS Global Consulting) provide a range of HR solutions including payroll, benefits administration, compliance, and recruitment services.
  4. Acclime is another leading PEO in China, known for their comprehensive range of HR services. Acclime specialize in payroll management, legal compliance, risk management, and other HR-related services.
  5. HROne is a PEO with an in-depth understanding of the China employment market. HROne offer a full suite of services including HR management, payroll, legal compliance, and recruitment services.

Engage a China PEO — our take

A China PEO will hire your China-based team, ensuring full compliance with local laws and regulations, at a faster pace and more cost-effectively than opening a local entity in China. 

When choosing a China PEO pay careful attention to their expertise in the China market, as well as customer reviews to ensure that you have a seamless hiring experience. 

FAQs

Absolutely, China PEOs can assist with the recruitment process of employees in China, including job postings, candidate screening, interviews, and onboarding of new employees. They have a deep understanding of the local job market and the expertise to source qualified talent.

A China PEO ensures that all HR activities, including payroll, tax deductions, and employment regulations, comply with local Chinese laws. They stay updated with any changes to legislation to ensure ongoing compliance.