Using Employer of Record (EOR) and PEO Solutions in China: A Strategic Guide for Global Businesses

Kristina Coluccia
Mar 20
3 min read

Expanding into China offers vast market potential, but it also presents a complex regulatory environment that can be challenging for foreign companies to navigate. For businesses aiming to enter or grow in the Chinese market without establishing a legal entity, Employer of Record (EOR) and Professional Employer Organization (PEO) solutions offer strategic, compliant, and cost-effective alternatives.

In this article, we’ll explore what EOR and PEO mean in the Chinese context, how they differ, their benefits, and when to use each. We’ll also share how Woodburn Accountants & Advisors can support your business expansion in China with these services.

What is an Employer of Record (EOR) in China?

An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of another business. In China, the EOR handles all employment-related responsibilities, including payroll, tax compliance, social benefits contributions, contract management, and HR administration. This allows foreign companies to onboard employees quickly and compliantly without registering a local legal entity.

EOR solutions are ideal for:

Testing the market before a full investment
Hiring remote or project-based staff
Managing headcount during M&A or restructuring
Reducing operational risk and administrative burden

What is a Professional Employer Organization (PEO) in China?

A PEO, similar to an EOR, provides HR outsourcing services. The key distinction is that in some jurisdictions, including China, the term "PEO" may be used more loosely to describe co-employment or joint-employment structures. However, due to Chinese labor law restrictions, true co-employment does not exist. As a result, in practice, PEO services in China are typically delivered under the EOR model, with the provider acting as the formal employer of record.

A China PEO solution may include:

HR management and policy development
Recruiting and onboarding assistance
Payroll processing and compliance
Benefits administration

For foreign investors, this means gaining access to a full suite of HR services through a local expert without needing to understand the intricacies of Chinese employment law.

Key Benefits of EOR and PEO Services in China

Speed to Market: Hire employees in as little as 1–2 weeks without entity setup.
Regulatory Compliance: Avoid pitfalls in China's complex tax and labor laws by ensuring fully compliant hiring and HR practices.
Cost Efficiency: Save on legal, administrative, and setup costs associated with forming a Wholly Foreign-Owned Enterprise (WFOE).
Focus on Core Business: Delegate HR and administrative functions to local experts and concentrate on strategic business goals.
Scalability and Flexibility: Easily scale your workforce up or down as needed with reduced risk and greater operational agility.

When Should You Use EOR/PEO Solutions in China?

Market Entry: You want to test the Chinese market before establishing a permanent legal entity.
Short-Term Projects: You have short-term needs such as project work or temporary staffing.
Non-Core Functions: You wish to outsource HR functions and focus on operations or sales.
Hiring Restrictions: You are restricted from employing local staff directly due to the lack of a legal presence.

These scenarios are increasingly common as global companies look for faster, more nimble ways to expand in China’s dynamic and competitive market.

How Woodburn Supports Your China Expansion

At Woodburn Accountants & Advisors, we specialize in helping foreign companies enter, grow, and succeed in the Chinese market. Our EOR and PEO services are designed to simplify the hiring process, reduce compliance risk, and provide a fast track to building your local team. With a deep understanding of local regulations, strong operational capabilities, and a client-first approach, we act as your strategic partner on the ground in China.

Whether you’re exploring market opportunities or looking to streamline your HR operations, Woodburn offers tailored, scalable solutions to meet your needs.

Woodburn Accountants & Advisors is one of China and Hong Kong’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.