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Doing Business in China Without an Entity

Traditionally, employing people to run your business in China requires establishing a company that meets HR, tax, and other compliance regulations. However, setting up a company in China generally takes months and requires significant investment before understanding the local market, which can lead to costly mistakes such as choosing the wrong pricing model, launching inappropriate products, setting up in the wrong location, or selecting unsuitable business partners.

Given these risks, an increasing number of firms opt for a smaller or shorter-term presence in China to mitigate risks before committing to significant investments.

Woodburn: Your Solution for Market Entry in China

A lesser-known model for market entry in China is Woodburn, which allows foreign investors to operate without having a legal entity of their own. Key within Woodburn's suite of services is the Professional Employer Organization (PEO) service.

How PEO in China Works

PEO services enable companies to establish a presence in China without physically setting up a local entity. A third-party PEO service provider handles compliance, payroll, and benefits, allowing the foreign company and its employees to focus on day-to-day operations.

Advantages of Woodburn

  1. Offshore Recruitment Before Entity Establishment

  • Woodburn allows foreign companies to hire local employees before establishing an entity. These employees can conduct preliminary business research and test the local market.

  1. Employing Staff at Local Labor Costs

  • Woodburn enables companies to hire employees at local wages, avoiding unnecessary costs due to misjudgment of local wage standards.

  1. Outsourced Employee Management

  • The local PEO provider manages salary calculations, social insurance contributions, tax declarations, and reimbursements, freeing the foreign company from day-to-day HR tasks.

  1. Legal Compliance for Hiring Foreign Employees

  • Woodburn ensures that foreign employees remain compliant with Chinese laws, assisting with visa applications, bank account setups, and tax verifications.

  1. Legal Support on Labor Contract Issues

  • The local legal team assists with establishing and determining labor contracts according to Chinese labor laws.

  1. Flexibility in Working Relationships

  • Foreign companies can terminate local working relationships at limited cost if there is a mismatch in skillsets or expectations and can easily scale up staffing if successful.

Can Woodburn help you?


Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.

Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.


Talk to an expert

Schedule a 30-mins complimentary, no-obligation call to see how Woodburn can help you. Book a call with our Head of Business Advisory - Kristina Koehler-Coluccia.

Topics we can advise on include:

  • Company Registration

  • Cloud Accounting & Financial Reporting

  • Cloud Payroll Services

  • Tax & Audit Services

  • Recruitment

  • Employer-of-Record

  • Visa Application

  • Trademark Registration

  • Switch to Woodburn

  • Partner with Woodburn (cross referral) 

Our calls are automatically scheduled via Zoom - or via Teams, WeChat or WhatsApp upon direct request. 

Our advisory calls are available from Monday-Friday from 8am to 5pm CEST and Wednesday until 9pm CEST.



Woodburn Accountants & Advisors is one of China and Hong Kong’s
most trusted business setup advisory firms

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