Using EOR to Recruit Talent for WFOEs in China: An Operational Guide

A key reason that many foreign investors establish businesses in China is its big consumer market and vast talent resources. How to recruit efficiently start your business in China as soon as possible is the determining factor. In this blog, Hongda will guide you through the complete process of EOR service in China.

Imagine the following scenario: A multinational enterprise hopes to hire employees in China for business operations. However, due to considerations for market testing, they are not yet ready to register a company in China, or require extended commercial decision-making time to determine whether to establish a company in China. In such cases, the company can achieve "legal employment" and "compliant labor management" through an Employer of Record (EOR).

At this point, the company can rapidly enter the Chinese market, conduct market validation, determine whether their business model and employment model are reasonable, and lay the foundation for larger-scale future investments in China.

Section 1: What Does Employer of Record (EOR) Do?

In other words, when using EOR services, you (the client company) directly assign work content to employees as the actual user of staff, while the EOR service provider focuses on compliance management during employment, such as social security payments and tax deductions.

Section 2: Applicable Scenarios for EOR

Reason 1. Market Validation - For companies who want to test a specific market without paying excessive upfront costs on company setup and compliance.

Real Case: A European electric vehicle industry company, which has not established a company in China, needed to hire 1-2 Chinese sales support staff and achieved legal employment through EOR.

Reason 2. Pre-Company Registration: For companies that have not completed company entity registration yet and urgently need some positions to be filled during this period to prepare for subsequent formal operations.

Real Case: A startup that has not yet established a company in China recruited a programmer through EOR to achieve compliant remote employment.

Reason 3. Avoiding Employment Risks from Direct Hiring

Real Case: Operating in policy-sensitive countries (e.g., Iran, India, Indonesia) or engaging in foreign-restricted industries like education, healthcare, or cybersecurity.

Section 3: Benefits of Using EOR

1. Save Time Costs: No need to establish a company—overseas hiring can be achieved in as fast as a few days.
2. Compliant Employment: EOR understands local laws and ensures legal compliance in social security, individual taxes, and contracts, reducing labor dispute risks
3. Reduce Operational Costs: Save fixed costs such as company setup, office leasing, and HR/legal expenses.
4. Flexible Market Entry/Exit: Suitable for short-term market testing projects, with employment adjustments flexibly following business development.

In summary, EOR is your HR outsourcing partner in China, handling "legally compliant payroll" and "social security contributions," while you focus on business development and team management. This service is particularly practical for:

• Early-stage multinational operations
• Trading companies
• Jurisdictions with high compliance requirements

Section 4: How to Integrate Hongda’s EOR into Your Talent Recruitment Process

Step 1: Screen Suitable Candidates (Optional)

Based on operational needs and job requirements. If your positions demand highly skilled professionals, you may need Hongda’s headhunting services to filter qualified candidates according to your job description.

Step 2: Hire Employees via EOR

With Hongda’s comprehensive HR management business solutions, we can integrate EOR process into the framework of recruiting talents, from headhunting to the following onboarding procedure, making your recruitment even faster.

Step 3: Work Visa & Permit Processing (For Foreign Employees)

Foreign employees must obtain Chinese work permits and work visas before starting employment. With years of experience, Hongda ensures smooth processing for your international hires.

Step 4: Onboarding Management

After recruitment, the EOR will facilitate employee onboarding. Hongda assists with labor contract preparation, confidentiality and non-compete agreements, and employee handbook setup to enable rapid operational readiness.

Step 5: Payroll & Benefits Administration

Post-onboarding, we ensure timely salary payments per contract terms, statutory benefits compliance (social insurance, housing fund), and full integration with Hongda’s EOR services.

Conclusion: Streamline Your China Market Entry with EOR Expertise

Navigating China’s talent market requires agility, compliance, and operational efficiency—especially for foreign businesses testing the waters or scaling operations. Employer of Record (EOR) services emerge as a strategic solution, enabling companies to bypass lengthy entity setup processes, mitigate employment risks, and focus on core business objectives while ensuring full compliance with China’s labor and tax regulations.

Ready to unlock China’s potential without the administrative burden?

Let Hongda’s EOR solutions empower your compliant, cost-effective, and agile talent strategy. Start building your China team today.