According to China’s Labour Law, a foreign company without legal representation in mainland China cannot conclude labour contracts with Chinese citizens if the place of work performance is in China.

In order to be able to employ a Chinese citizen in China, the foreign company must establish a legal entity in the country, but the procedure changes depending to type of entity established. For instance, representative offices may employ local individuals only through agencies like FESCOor CIIC; joint ventures or wholly foreign-owned enterprises may employ local individuals in their own name. More details on how to establish a foreign company in China can be found in corresponding FAQs in the section ‘registering a company in mainland China’.

Foreign companies which do not wish to have any permanent establishment in China, but still need someone ‘on the ground’, the only possible solution is to establish a commercial relationship / service agreement with a self-employed professional – who will be responsible for paying independently income taxes and social security contributions.