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Employer of Record (EOR) in China
Read this before you sign anything: China does not allow ordinary EOR
Everywhere else in Asia you can appoint a third party to employ your team for any role you like. China does not work that way. The only compliant entity-free route is labour dispatch through a licensed agency, and it is capped at 10% of headcount and limited to temporary, auxiliary and substitute positions. Aniday's partner entity in China works inside those limits — and says so up front, because a promise of unlimited entity-free hiring in China is a promise nobody can keep.
Hiring a foreign national instead? Read our China work permit guide — A/B/C points, the Z visa chain and the salary floors that apply in practice.
China's employment Snapshot
There Is No Ordinary EOR in China
China does not permit the ordinary EOR arrangement used elsewhere in Asia. A foreign company with no Chinese legal entity cannot simply appoint a third party to employ staff on its behalf for any role it likes. The compliant route is labour dispatch through an agency holding a labour dispatch operating licence, governed by the Interim Provisions on Labour Dispatch in force since 1 March 2013. A representative office cannot hire staff directly at all. If you are engaging independent contractors in China rather than employees, you might need Contractor of Record in China instead.
Who you actually contract with
Aniday owns no Chinese entity. Dispatch is delivered through Aniday's partner entity in China, which holds the labour dispatch operating licence. We say this plainly because the licence is the thing that makes the arrangement lawful.Your own entity
Labour dispatch
The Statutory Limits on Labour Dispatch
These are the rules that decide whether your China plan is lawful. Read them before you read anyone's pricing — including ours.
| Rule | What it means for your hiring plan |
|---|---|
| Governing instrument | The Interim Provisions on Labour Dispatch, adopted at the Ministry of Human Resources and Social Security's 21st executive meeting and effective 1 March 2013. Everything below comes from that instrument. |
| Which positions qualify | Only three kinds. Temporary positions lasting no more than 6 months. Auxiliary positions that support the business rather than form its core. Substitute positions covering a regular employee who is absent. A role that is none of these cannot be filled by dispatch, whatever the paperwork says. |
| Headcount cap | Dispatched workers must not exceed 10% of the employer's total workforce. This is the limit that most often kills an entity-free China plan, and it is why we count your roles before quoting. |
| Agency–worker contract | The labour contract between the dispatch agency and the worker must run at least 2 years. The worker is the agency's employee for that period, not yours, and not a per-assignment casual. |
| Agency licensing | The dispatch agency must hold a labour dispatch operating licence. An arrangement run through an unlicensed intermediary is not dispatch — it is an exposure. |
| Representative offices | A representative office cannot hire staff directly at all. It must engage staff through a dispatch or HR service agency — the classic FESCO or CIIC route. |
| Foreign nationals | Only a legal entity that directly employs the person, holds a Chinese business licence and has the role inside its registered business scope can sponsor a foreigner's work permit. Labour dispatch cannot be used to sponsor core foreign hires. |
Sources. Position categories, the 10% cap, the two-year agency contract and the licensing requirement from the Interim Provisions on Labour Dispatch (effective 1 March 2013), Ministry of Human Resources and Social Security. Work permit sponsorship position as published on Aniday's China work permit guide. Last verified 2026-09.
What Aniday's Partner Entity in China Can Do
Inside those limits, dispatch is genuinely useful — and for a lot of first moves into China it is the right tool. Here is where it fits.
A pilot team before you commit
Put a small team in-market and test the demand before spending a year and a registered capital commitment on a WFOE.
An auxiliary or support function
Back-office, coordination and local admin roles that support the business rather than form its core sit squarely inside the auxiliary category.
Cover for an absent employee
Maternity leave, long-term sick leave or a secondment can be covered through a substitute position without disturbing your permanent structure.
A bridge while your WFOE is registered
Keep people paid and insured from day one, then move them onto your own entity's payroll when the business licence is issued.
Payroll, social insurance and housing fund
Contributions on the correct city base, cumulative individual income tax withholding at 3%–45%, and the year-end reconciliation that goes with it.
A straight no when dispatch will not work
If your plan is core permanent headcount, we will tell you a Chinese entity of your own is the answer before you sign anything with us.
Employer Cost: Social Insurance and Housing Fund
Rates and contribution bases in China are set city by city. There is no single national number, and anyone who quotes you one is guessing. Shanghai and Beijing, the two cities most first moves land in, look like this.
| Contribution | Shanghai | Beijing |
|---|---|---|
| Pension — employer | 16% | 16% |
| Medical, incl. maternity — employer | 9% | 9.8% |
| Unemployment — employer | 0.5% | 0.5% |
| Work injury — employer | 0.2%–1.9%, industry-rated | 0.2%–1.9%, industry-rated |
| Housing fund — employer | 5%–7%, employer elects | 5%–12% |
| Employer total | 30.7%–34.4% | 31.5%–40.2% |
| Employee side | Pension 8%, medical 2%, unemployment 0.5%, housing fund 5%–7% matching the employer election — 15.5%–17.5% in total | Set on the same city basis |
| Contribution base | Through June 2026: ceiling RMB 37,302, social insurance floor RMB 7,460, housing fund floor RMB 2,690 | Set from the prior calendar year's average monthly wage, with a municipal floor and ceiling |
Foreign employees
Contributions are mandatory for foreign employees. Pension and unemployment can be exempted only where a bilateral social security (totalisation) agreement applies and a certificate of coverage has been filed. Medical, work injury and maternity generally remain payable, and housing fund eligibility for foreigners varies by city.
Individual income tax
Employees are subject to cumulative monthly withholding at progressive rates of 3%–45%, with an annual standard deduction of RMB 60,000. A contractor paid labour remuneration is withheld differently — 20% above RMB 4,000 after a 20% expense deduction, or 20% on the balance after an RMB 800 deduction for smaller payments — and reconciled into comprehensive income at year end.
Sources. Shanghai employer and employee rates and the contribution base through June 2026 from the Shanghai Municipal Human Resources and Social Security Bureau; Beijing rates and base-setting method from the Beijing Municipal Human Resources and Social Security Bureau; individual income tax rates, the annual standard deduction and labour remuneration withholding from the State Taxation Administration; the totalisation and certificate of coverage position from the Ministry of Human Resources and Social Security. Rates and bases are municipal and change annually. Last verified 2026-09.
When You Need Your Own Chinese Entity
For a core, permanent, full-headcount operation the compliant answer is a Chinese entity of your own. That is not a sales position, it is what the Interim Provisions leave you. Dispatch is a good bridge and a poor destination.
We would rather tell you that now than sell you eighteen months of an arrangement that has to be unwound in front of a labour bureau. If you already know a WFOE is where you are heading, dispatch still buys you the months in between.
- Your China roles are core to the business rather than auxiliary to it.
- You need more than 10% of your China workforce on non-permanent terms.
- The positions will outlast the 6-month temporary limit and are not substitutes for an absent employee.
- You need to sponsor a foreign national's work permit, which requires a direct employer holding a Chinese business licence with the role inside its registered business scope.
- You are building a permanent management team rather than testing a market.
How a Dispatch Engagement in China Works
Three steps, and the first one is the one that matters.
Position review
Every role is tested against the temporary, auxiliary and substitute categories and counted against the 10% cap before anything is offered.
Contracts in place
A dispatch agreement between you and the licensed agency, and a labour contract of at least two years between the agency and the worker.
Payroll and filings
Monthly payroll, social insurance and housing fund on the correct city base, cumulative income tax withholding and the year-end reconciliation.
🇨🇳 FAQs about Hiring in China Without an Entity
Can Aniday employ staff in China if we have no Chinese entity?
Only through labour dispatch, and only for positions that pass the statutory test. Dispatched workers may fill temporary positions of no more than 6 months, auxiliary positions that support rather than form the core business, and substitute positions covering an absent regular employee. Dispatched headcount must not exceed 10% of the employer's total workforce.
How long can someone stay in a dispatched temporary position?
A temporary position may last no more than 6 months. Separately, the labour contract between the dispatch agency and the worker must run at least 2 years, so the agency carries the employment relationship well beyond any single assignment.
Our China presence is a representative office. Can it hire directly?
No. A representative office cannot hire staff directly at all. It must engage staff through a dispatch or HR service agency — the classic FESCO or CIIC route.
What does an employee actually cost in Shanghai and Beijing?
Employer social insurance and housing fund runs 30.7%–34.4% in Shanghai and 31.5%–40.2% in Beijing. Rates and bases are set city by city, so there is no single national figure. Shanghai's contribution base through June 2026 has a ceiling of RMB 37,302, a social insurance floor of RMB 7,460 and a housing fund floor of RMB 2,690.
Can we sponsor a foreign hire's work permit through dispatch?
No. Only a legal entity that directly employs the person, holds a Chinese business licence and has the role inside its registered business scope can sponsor a foreigner's work permit. Labour dispatch cannot be used to sponsor core foreign hires, so a foreign national in a core role needs your own Chinese entity.
Client Reviews
Read real feedback from clients on why Aniday is a trusted hiring partner across Asia.
Tell us the roles. We will tell you whether dispatch works.
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