As explained earlier, China is a real challenge for whoever wants to do business there but never tried before. Among the different major issues, you will find payroll. If you’re incorporated locally, you need to ensure that your local entity is legally capable of running a payroll. Even if you are considering local incorporation in the future, a local payroll provider reduces your liability in the meantime. Furthermore, a management company accomplishes all of the same payroll responsibilities, alongside numerous other specialist services that reduce your liability even more.
Local payroll in China
Your employee will need to get paid in China, but establishing a local payroll can be extremely difficult. Even if you already have a local company, you need to confirm that it’s appropriately registered to run a payroll, and to file and deduct taxes. This requires sufficient administrative staff that is up-to-date on all tax requirements in China.
Setting up a payroll in China
To set up a local payroll, your company will need to incorporate in China. This will be another issue necessitating extensive research; how long will incorporation take for your company, and how much will it cost? Depending on your budget and time frame, a temporary project may not justify local incorporation. In that case, it’s more efficient to outsource the administration to a local payroll provider.
You might be willing to incorporate locally, however be aware that using a payroll provider can present an extra security measure while you complete the process. This enables you to second your staff onto a work site immediately, without exposing your company to unnecessary risk.
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