Recruitment in China

Recruitment in China: Frequently Asked Questions

What is the monthly cost of using an Umbrella Company in China? 

5% with a minimum of $300 USD per month.


What is the cost of a Work Permit in China?

$1000 USD

How long does it take to get a work permit in China?

Around 4 to 6 weeks.

What is the estimated net retention in China for a contractor earning USD 500 per day?

*update pending

What is the estimated net retention in China for a contractor earning USD 1000 per day?

Depending on how it’s structured but around 75%.

Read more about the work permit process.

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Recruitment in China can be a challenge, but you don’t have to drown in time-consuming admin just to place a candidate. You can simplify complications by using an Umbrella Company (or “contractor management company”), as long as you pick the right one.

Skip ahead to find out how we can help you place candidates faster, or simply read on to find out more about the specific issues you’ll face.

Placing a new contractor in China: what are the challenges?


Recruiting in China generally requires a lot of complex admin duties, and contractors might end up paying too much in taxes or failing to comply with China tax law. It’s important to know what kind of concerns you’ll be facing.

  • Double taxation: Contractors can incur a tax liability in both their home country and in China. Many countries have agreements that mitigate this type of issue, but whether or not you can take advantage of them will depend on factors like the length of the contractor’s stay, or the laws of the contractor’s home country. You can learn more about double taxation here (note: this info was written with respect to the UK, but the general concepts will still apply).
  • Withholding tax: If a foreign company is used to provide services overseas, the payments made to that company by the China client could be liable for withholding tax under China tax law. Find out more about withholding tax.
  • Individual taxation and tax residency: A contractor’s tax liability will often be determined by his or her residency status in their home country and in China. Figuring out their tax residency can be difficult and is often tied to the length of their stay in China (or out of their home country). Read more about tax residency and individual tax liability here.
  • Permanent establishment: Most double taxation agreements limit the scope of taxation in the host country by providing that a business is only taxable in another state if it has a permanent establishment in that state. A permanent establishment is a fixed base such as a branch, office, factory, workshop, mine or oil well. To find out how to avoid permanent establishment and unnecessary tax liability, read more about the issue.

Work permits

Contractors will need to find a sponsored work permit, which can be difficult and may seriously slow the placement process. Additionally, they’ll need a new permit for each new contract, spawning even more paperwork.

See our FAQ to find out more about the cost and processing time of China work permits.

Why use a contractor management company?

An efficient way to manage these problems is to outsource them to a contractor management company. They’ll act as the contractor’s “employer,” handling all of their invoicing, fees, and social security. As China tax experts, they also help contractors comply with local tax law while maximising the amount they get to keep.

A quicker, better recruitment process: Working with an Umbrella Company means saving time, effort, and resources. Higher earnings and a smoother transition also make contracting a more attractive opportunity, helping you place candidates more quickly and successfully.

Still, you’ll need to find the right company for you and your candidate.

How to find the right Umbrella Company?

Making sense of the optionsFor free, we match contractors with Umbrella Companies and can help dramatically reduce waiting times. There are numerous Umbrella Companies in China and each has its own specialties, services, and payment structures. Choosing the right one is crucial, but it can be difficult when you’re facing a bunch of unfamiliar options.

We’ve developed an extensive database of these companies. We can guide you through your options and help connect you with the best company for you and the contractor.

Get in touch: If you want straightforward, honest advice on recruitment in China, we’re easy to contact. Call, e-mail, or chat with us online - for free.

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Work Permits & Payroll - Frequently Asked Questions


What documentation is required for a China work permit?

Copies of: passport, CV, employment contract, education certificates.

What is the work permit process in China?

The Chinese company sponsoring the visa apply through the Chinese immigration authorities in China, once the Employment License is issued the candidate applies for the Employment/Work Visa (Z Visa) at the Chinese Consulate in their country of residence. On entry in China the candidate and employer submit an application at the local Labor & Social Security Bureau which then takes a further 15 days. Once approved the candidate will need to apply for the Residence Permit (done from within China).

Can you transfer from a Business Visa to a Work Permit in China?


Can we organise Business Visas in China?


How long does it take to process a Business Visa in China?

5 to 7 days.

How much does a Work Permit cost in China?

$300 USD

Can nationals of certain countries enter China without a Business Visa (ex. on an entry visa or visa waiver)?


Yes, those from: Singapore, Brunei and Japan.


$300 USD per day.

What is the monthly cost to run a local payroll in China?


5% with a minimum of $300 USD per month.

How does payroll work in China?


Your employer (the company sponsoring your visa) pays the candidate on a monthly basis, social security and income tax are deducted at source and paid to the China tax authorities. Candidates are able to offset their taxable income with relevant business expenses. China has 20% employers social security contribution and 8% employees contribution which covers pension, health insurance, maternity insurance, work-related injury insurance and unemployment insurance. This varies by region and generally has a limit to the employer contribution where the maximum social security contribution cannot exceed three times the average monthly wage. e.g. in Shanghai in 2012 the maximum social insurance contribution was RMB 11689 per month - because the average monthly wage was RMB 3896. The World Bank estimates it takes employers in China 192 man days to ensure compliance with payroll and labour taxes each year.