Is it possible to hire Chinese staff in China even without a company fully set-up? We talked about that in a recently concluded GFA webinar with HROne entitled, AVOIDING UNCERTAINTIES AND RISKS WHEN BUILDING A BUSINESS IN CHINA – How a PEO/EOR can help you to hire employees without setting up a local company. Giacomo Verde, HROne Marketing Manager shared some valuable insights with us. We recorded the webinar and made it into a podcast for today’s show. Plus, you get to see this new format we’re trying out. Let’s dive in.
Topics Covered in this Episode
Intro Giacomo Verde
Living and working in China for more than 5 years, helping foreign companies navigate through the complexities of HR and payroll in China
Risks when building a business in China
China is still a hot market but with uncertainties like trade wars and Covid-19. Learn about various risks like market access, laws & regulations, government issues and others.
What is a PEO/EOR and how it works
PEO/EOR offers employment solutions for companies that hire staff in China. Know more about these employment solutions that they offer.
When a PEO/EOR is the best solution to use
Check out the pros and cons of using a PEO/EOR and see if it is the best solution for your business
Procedure to use a PEO/EOR in China
A walk-through on the process of using a PEO/EOR and responsibilities of each party.
Question and Answer
In this part of the webinar, some of the attendees posed some questions to Giacomo and also threw in some of their own insights.
People / Companies / Resources Mentioned in this Episode
Episode Length 53:57
Thank you Giacomo and HROne for bringing this topic to the GFA community. Thank you to those who attended the webinar and for those who are tuning in!
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[00:00:00] So Episode 358 of Global from Asia podcast. And Hiring a Chinese team member without having a Chinese company, it’s a topic, this is the legal way of doing that. So let’s tune in today plus it’s going to be a new format of the show and some changes and some updates as well. So stay tuned for the whole episode.
[00:00:26] Let’s do this. Welcome to the global from Asia podcast where the daunting process of running an international business is broken down into straight up actionable advice. And now your host, Michael Michelini. Episode 358 of Global from Asia. I am here in Shenzhen, China. Actually at my buddy’s apartment, Dave, thank you, Dave.
[00:00:51] He sometimes listens to these shows. I think he registered for that webinar. I don’t know if I saw you there, Dave, so maybe you’re listening to this recording. All right. Well, we’re getting up the numbers. We’re getting towards the end of the summer. And this, this is a very timely episode because people
[00:01:10] can’t get into China. People can’t even open up a company in China. People maybe want to have some less risk or less upfront investments in their China business. Maybe they want to hire Chinese people to help, the legal way, and they don’t want to open up a company, fly here to open a bank or mail documents back and forth, et cetera, et cetera.
[00:01:30] So Giacomo’s here, and this show I’m in, I’m in an apartment right now, I’m in my kind of comfort zone. But I went out of my comfort zone today in the show that you’re going to see. I was in a Live Streaming studio office in Nanshan district Hi-tech Park in Shenzhen and they are encouraging me to spend more time there, do more content there, et cetera, et cetera.
[00:01:52] Maybe I’m a rental white guy. I don’t know. I can’t, sometimes I can’t tell, am I a rental white guy or am I, like a business, what’s my reason to be there? Maybe it’s a mix of both. Maybe I’m a two for one. Anyway, I did, I did it, and it was a lot of fun actually. And Rose, one of our amazing members in the community GFAVIP and she is
[00:02:10] Always supportive in our events. You might’ve seen her at some of our Cross Border Summits or Cross Border Matchmakers over the years. So it’s really great. I have her with me on the show with Giacomo doing this discussion. And please give me your feedback. This is audio still, but it’s video and it’s live and we’re going to be upgrading more and more so after the show, I’ll talk a little bit about my recent weeks, week and a half in Shenzhen some other things, maybe some future ways of doing this content, in the future. And the URL globalfromasia.com/
[00:02:47] nocompany. How about that? No company, no company. N O company, no company. Let’s do it today. Boom, thankyou to our ongoing GFA partners, sponsored level mercury.com. Travis Price is BD there and an e-commerce seller himself, coming to some of our events support what we do really appreciate keeping this show rolling, even through the rough times of the COVID. And their sponsorship has supported the show and it’s a great sponsor, a great service.
[00:03:21] A couple of our different businesses that we’re invested in for US bank accounts, without having to go there, without having a hundred percent US partner ownership. You can do this and it’s totally free application. I don’t even know how they make money. To be honest. I mean, everything is free, but they even give you some cash bonus as well as me.
[00:03:38] If you hit certain criteria, if you use our link globalfromasia.com/mercury for more, check them out, give them a shot. Even when I have a second bank, if you already have one, let’s do this. Thank you everybody. Live from Shenzhen China, and we’re always learning new things as some of, you know, I’ve just returned to Shenzhen about a week ago, and we’re trying something new. We’re in a live studio building or floor.
[00:04:07] There’s all these live streaming rooms. And there’s doing like tiktoks and douyins and video recordings and all kinds of stuff. So of course they. Thanks Mina. Thank you. Thank you. Thank you, Andy. Great. Great. So we’re doing this live and it’s, it seems so far, I don’t know. We have with us Rose. Rose is with us today.
[00:04:29] Thanks for joining rose. Hi everybody this is Rose. I’m super excited to be here with Mike, it’s my first time doing a GFA live streaming. I’m super excited. It’s really awesome. It’s really awesome. And I think there’s going to be a lot more to come from here. Thank you, James from Zocus and his team for inviting us to this location, to do this today.
[00:04:52] It’s a, it’s a really great idea to do this, and we have a great presentation today. Giacomo Verde. He is the digital marketing manager at HRone in Shanghai. And we’ve been talking for the last one month or so preparing for this. Also, LJ on our team and Stephenie in our GFA team making this happen behind the scenes they are here today.
[00:05:18] Talking about a topic that I think a lot of you will enjoy. Especially nowadays with COVID, traveling is almost impossible. Right? We, Andy here, Amazon advocate can attest. He was in quarantine for like a month straight. I say, trying to travel between Taiwan and Singapore five weeks, five weeks. So yeah, I mean, we can’t travel.
[00:05:42] Right. So today Giacomo is going to share an interesting way of a PEO. We’ll learn what that is and hiring people in China, employees in China without having to have a company. So I think this is a hot topic, always because opening a company is a huge, a huge investment of time and money. And we’re going to learn a lot about that today.
[00:06:03] Also, just as you can see on the screen, we’re going to have a mastermind. For members of GFAVIP. So if you’re in our mastermind, or probably membership, stick around afterwards for a, a round table with a small group. If you’re interested to learn more about that gfavip.com. So how are you feeling today, Giacomo?
[00:06:22] Excited. I know you’ve been working hard on the presentation. Thank you for the introduction, Mike. Yeah, very excited to be, actually. It’s a great opportunity to share something new to the audience and maybe. You know, a lot of people don’t know because usually company information is quite common.
[00:06:38] But what is PEO? A lot of people usually ask these questions? What is this PEO? And that’s why we prepared this presentation to explain a little bit more about this, this concept and a, a of a solution for companies. Perfect. Perfect. So I think we want to go to the next slide, right? I mean, I don’t have, I don’t have any, I don’t have a screen in front of me. So, so here’s the, main topic, you know, Avoiding Uncertainties and Risks when building a business in China.
[00:07:08] Right? So how a PEO or EOR company can help you hire employees within China without setting up a company? I mean, a lot of times people know the acronym that I know is WOFE which is wholly foreign owned entity or there’s other ones like a rep office people have heard about. I’m even not too familiar with the PEO or EOR, so that’s even new for me.
[00:07:33] So I’m really excited to dive into this day. And is there any parts on this Giacomo you’d like to say in this slide? Yeah, well, just the introduction. What I want to explain actually in this webinar is more about the current risk in China and challenges. And now actually the PEO can help you to overcome this challenge and simple, you know, kind of enter China in a different way.
[00:08:01] Not there is a way that is more expensive and more risk. Yeah, that’s the, that’s the basically that’s, that’s the topic of the webinar. Perfect. I mean, literally a I’m helping a company now in China doing some Amazon aggregation and they’re opening up a WOFE and it’s a real big hassle because they can’t come to China.
[00:08:22] They can’t come here. Right. They can’t normally we would fly in, you know, get some jobs, have some dumplings. Zac’s here. Thanks for coming. Get some dumplings, you know, Guangzhou. James will take him around and, you know, sign some documents, go to some banks, but he can’t, he can’t do that now. I mean, even if it wasn’t, we love this, we can’t, we can’t do this.
[00:08:48] So I’m really excited to hear some other alternatives for that. So I guess next, next, next slide. Yeah. So this is quite a
[00:09:02] long time ago, actually. Five years now. So this was a quite a different look and different hairstyle. What we do now is more helping companies, foreign companies to manage the HR and payroll and actually help them also to hire employees in China. So, and you’re specifically in Shanghai, right? Just one of those, actually.
[00:09:31] I don’t want to, I don’t want to pick favorites, but Shanghai, I think my favorite city in China. I don’t know about Rose. Rose, do you have a favorite city in China. Yeah. Shanghai is a lot better than Shenzhen. It’s a lot
[00:09:45] different. They’re trying to make business. And Zac is saying, Gungjo yeah. Relaxed, beautiful city. I’ve been there a couple of times. We met, I met Zac there. Just some small talk, make things fun. Catherine loves Shanghai. Yeah. We’re getting some chats. Thanks everybody. I mean, we’re doing this live. All of us will be there.
[00:10:09] We’ll be recording, but just the benefit of being here live as you know. But yeah, Giacomo is up in Shanghai. It’s a great, great place. So, so let’s, yeah, you have the agenda list. Let’s discuss, what are we gonna talk about today? The risk of when building a business in China and then introduce all the aspects of the PEO I will talk about later about the difference of PEO/EOR and actually why, and when is the best to use a PEO/EOR instead of a, of a traditional way of opening.
[00:10:41] And then in the end that we’ll talk a little bit more about the procedure, use this type of solution. But before talking about that, I want to actually be talking about the risk. I want to talk about one specific thing that China is still very attractive for companies. This chart shows the, the FDI inflows for the last 10 years in, in China.
[00:11:04] And as we can see, especially in 2020, there was a big jump from 141 to $149 billion. So these sorts of show that China is still attractive. It’s still an attractive destination for foreign companies that want to invest. But the reason this year from January to July, like the, the, the front end investment problem rose by 25%.
[00:11:33] So only from January to July. So still during the Covid, And last year I expected still during Covid I mean, we still are being increased on that investment. Not only one reason why China is still attractive, we know, and we, so we so many, many times that the consumer class in China, it’s when it’s consumer kind of rising that, especially the middle class now are more, it’s more income, more money to spend on different products and services.
[00:12:04] And also there is in general a stable government and a stable regulatory environment. They did that in the ESL, a lot of the companies to enter China, for example, or financial incentives for comopanies. But of course, now there are more uncertainties if we want to come to China. COVID is probably the top one. As we do China, especially the rest of the world to doing plenty of plans in 2021, COVID was a big, big problem.
[00:12:40] Not only for the cases itself, but the impossibilities to enter China. As you told me before, you were trying to help a company build a WOFE, they cannot come. There’s a big problem. Now companies cannot come in China. They can not get the visa. And it’s very hard in this way tostart a business. That’s the main problem.
[00:13:03] The other kind of problem is we know, we know that trade war between the US and China that started in 2018 and, and this, you know, influence a lot, the, the economy and the, and also actually other countries too that they started to realize maybe there was some problem between the countries and they were not motivated to come.
[00:13:24] So these are some of them certainly is big, big uncertainties. Now that there are in China, when you want to start a business. Great. I think one, like a lot of our friends can’t come back in, they have businesses, they have, you know, relationships, you probably know people to there. You know, I think it’s been a real big issue for all of the community business international business.
[00:13:52] Yeah. So while you can say China too, but I think globally, you know, business outside of your home country is becoming more and more challenging as well. As of course in China. Yeah, except for these, of course, there are some other challenges in China. One of these is the market access. Let’s say that it’s true that there are some that, you know, the government did a lot of things for them, for the regulatory requirements to have companies other.
[00:14:19] Sometimes these regulation is still difficult to understand for companies. And, you know, sometimes that can be problematic for companies to understand. Maybe they cannot end a particular industry or particular sector. Laws or regulations are a big challenge. Especially when you open a company, you have a lot of rules to follow rules, so that it’s specific to China and it makes difficult.
[00:14:51] You know, sometimes, and challenging, wherever I go, the kind of a busy, normal business. And also the,when you want to manage sales and distribution, you need to find the right distributions on that. And sometimes if you don’t have an access to the market, You cannot do from, from outside. It’s not easy. It’s really complicated, very complicated.
[00:15:18] Some government issues, companies in the past, they had some problems, as I say, the specialty, whether it’s to the market access. In, not in all the industries, companies can easily enter and access the market. That’s something that is not absent for companies that maybe sell particular products. And you cannot do that in China. And the HR and payroll is actually one of the top challenges for companies.
[00:15:47] The past related to finding talents in China, but also all the, everything that surrounds HR from paying the salaries, dealing with the social benefits, dealing with paying the taxes. This is a specific challenge. It’s not that you, for example, if you’re in Italy or US then you think I go to China and I would find the same environment also like this.
[00:16:14] No, that is completely different because of the rules, because of the language and the, you know, the requirements for the companies sometimes more. many times it’s actually difficult for companies to understand last, the last time there’s high competition. Now the competition is really massive in China. Many companies want to enter, but it’s, they want to add the many companies already here that they’re selling products and stuff.
[00:16:43] And also a Chinese company is also is, are kind of a competition foreign companies also. And in this, in this graph too, I want to show that the top, the top challenge is, especially when I say the HR related, finding candidates, dealing with payroll, dealing with that. It’s something really stressful for the, for companies. That we will find out.
[00:17:08] For sure man, HR issue everywhere, but especially in China, like local, there’s a lot of local differences and cultural differences for sure. Something we see a lot. Yeah. So can we take a question? I don’t want to interrupt too much, but Zac, Zac is asking. Yeah. I dunno if I could also comment, but about the vaccine, if they’re going to open up sooner, we think or not, or if you have an idea about that, I mean, I have some ideas, but yeah, I have to some areas and it’s hard to say.
[00:17:41] It’s always hard to say. With this kind of situation, we never know when the policy will be again, will be relaxed. That is really, I don’t want to say tomorrow. I don’t want to say next month. Don’t want to say next year is really, I think, impossible. I know you will agree with me, Mike. Yeah. I mean, not I’ve been hearing from people in, or some of the people in the room in the studio here might also have answers, but I’ve been hearing for some reason, May is the earliest possible.
[00:18:11] That’s what happened here. I don’t know. I can’t verify that, but.
[00:18:19] Okay, thanks for that. Let’s move with your great presentation. So
[00:18:29] how does it work? A PEO is a professional employer organization. This basically why I put the differences from PEO/EOR. In China, actually, this differentiation doesn’t exist. In other countries, you can see that PEO and EOR are two similar solutions, but a little bit different. PEO is more kind of a co-employment like company and the PEO.
[00:18:56] Those are employer of the, of the. Equally the [employer record only the actual employer of record is the it’s the final employer. The, the, the, say the client company, the company that assigned the task to the employee is not the legal employer in the country. I mean, in China these differentiation doesn’t exist PEO and EOR seen in the same way.
[00:19:21] That’s why I use the terminology. But you usually use, I guess it’s more used in that, in US, in that kind of system. Okay. So for companies that want to add staff in China, And not only, it takes care of the, hiring part, but also all the surrounding of the hiring part and the relationship between employer and employee – HR, payroll, social benefits, tax system, visa processing, everything employment contract, everything related to that area, HR and payroll. Now like, Can I, can I clarify, clarify, make sure I’m making sure I’m correct.
[00:20:11] Um, sometimes I’ll be the, just make sure I’m clear. So that means the P E O is the, is not, not the client, the client, like if I’m a company listening today, I would work with a PEO. I don’t, I don’t become a PEO. I’m looking for a PEO. He has a client that the company you use the PEO, sort of, kind of agency, it becomes the PEO.
[00:20:39] That is the EOR. And that becomes the legal employer in the country for the employee. Got it. So I’m the business owner listening today, and I want to hire somebody in China. I would, maybe this is one option is to find a PEO. But I wouldn’t, I wouldn’t set up a PEO. I would find a PEO. [Why? Because basically, you know, the traditional model of opening a company usually takes more time and more money.
[00:21:11] It requires a big investment and we go sometimes most of the times it’s like people must register. And if you don’t have problem with the registration form,
[00:21:25] Then the PEO basically it allows you to start the business without setting up a lot of someone else you use a PEO or an agency to help you with all these parts related to HR, payroll, paying employees kind of handle troublesome sometimes many times for the call. Just to clarify again. So. It’s for HR, not for selling.
[00:21:53] Like I can’t, I couldn’t sell in China with this. You can’t sell in China but you can hire people to sell. I will, I will explain mor elater. Okay. Sorry. Sorry. I don’t want to interrupt. PEO
[00:22:12] handles all the aspect of human resources. So like easily, the PEO is an expert in the laws and regulation of the country in this case, China. And so it can assure that all the companies that are operating in the country are compliant with the law, especially regarding labor concerns and all employment.
[00:22:34] And it also manage payroll, not only managing that, the payment of the salary, but also handling all the mandatory benefits, like social security, individual income tax deduction, payment of annual bonus overtime payment, all these aspects related to payroll. And what actually does is in case you have foreigners, then you want to, I, you can also have the visa.
[00:23:00] So can I put visa for foreigners? It’s a big part for this, because now, now in China is also not easy to get visa for foreigners. So that’s something that, you know, we cannot, the PEO cannot go over the law. Basically, if there is a general law, let’s say that, you know, it’s a complicated to get visa. It requires more.
[00:23:24] Effort, the PEO cannot go over the law. And I mean, it has to respect the regulation in this and this way. Yeah, basically this one, it does explain what I, what I just said. Two aspect that I want to put in evidence on the labor contracts and the social benefits. These are usually too complicated aspects for, for companies.
[00:23:51] But mandatory. And, if you make mistakes on this part, then you can have problems with the governments and with the government in China.So for global labor conscious, for example, you have a series of a mandatory elements to include. There are the employee and employer information with all the ID number, address, then you have to include the remuneration so that the basic salary, bonus commissions, the responsibilities of the, of the, of the employee.
[00:24:20] Working hours, leaves, employment, period. These are all aspects that if you don’t include these, and then you create a kind of a employment relationship with that candidate, then you can haveproblem. So this is to avoid all the risk and the risk is something that the PEO actually can take care of. Also drafting, the deliberate contract between.
[00:24:47] The employee and actually the PEO in this case. Now, another aspect is the social benefits is a big part of the, especially the payroll. I don’t know if you know something about social benefits. If you have employees, then you need to consider these. Yeah, I know, I mean. Some employees want this.
[00:25:11] Some don’t want this. I don’t know. They have to, but they could
[00:25:22] It’s mandatory. These are actually at the social benefits in China,
[00:25:29] sort of Medical and employment work, injury and maternity that the employer has to pay everything. That’s that’s that’s for sure. Some of them are also contributed by the, by the employee. Yeah. Some days I remember. Yeah.
[00:25:50] If you don’t do that, then you can have really, really big problem. Yeah. And the
[00:26:02] part when to use it. When is the best solution to use the PEO? Now that’s why now I want to go back to what you told me before selling in China. It’s actually very useful. The PEO in this kind of solution, selling in China, especially if you sell products to other company, if you’re operating the B2B model, And you don’t need to invoice in China, so you don’t need to pay in RMB, this is the solution for you too.
[00:26:31] Employees who manage all your sales in China and the invoice, then you can invoice basically from your country. Like for example, you have a US company, you want to sell some product specific products to other companies. You could do a, could go with the traditional way of opening a company, but then you will have a lot of risks.
[00:26:55] And then, then you will have to spend a lot of time and money for, to opening a company like that. Or with the PEO you can actually hire PEOs. Yeah. And they can manage these. So they are responsible or the selling,in China to other companies will allow you to reduce all the risk that company formation can bring.
[00:27:20] Because the only mistake that you can have is related to the labor contract, the contract that you have with the employee, the relationship that you have with the employee. And it’s a very cost effective solution, because as I said, you don’t need to set up. And you can still involve from your own country.
[00:27:40] So this is one way that you can use too soon. It’s the best solution sometimes to use the PO in this case, another one is sourcing from China. Again, this is for, especially for many companies dealing with the e-commerce. They need to source product from China. Now I think, I think the oldest probably there is some.
[00:28:01] Yeah, there’s a lot of us that are, especially if you work with ecommerce and again, opening a roofie it’s it’s can be problematic. Can take a lot of time. You can reduce this time. You can reduce the risk. Again, I hiring employees that basically will source of the product from you, so they will visit factories.
[00:28:22] They can do quality control. They can manage the relationship with the factories. And in this way you will reduce almost to zero the business risks. Like you have only again, we have only that employment relationship to manage that you don’t have any other way. Yeah, it’s a great hack, right? Because yeah, a lot of people want to have a company if you’re just hiring people, there’s there used to be a web rep office, but that’s also very expensive, you know,
[00:28:57] that’s even more expensive. You know, more problems that in the future, maybe if you want to close the company or I don’t know, or have problems with the government. That is something that you want to avoid, especially because in your mind that you had only the idea of, okay, I will go to China. I only need to source product.
[00:29:20] I don’t want to have a lot of businesses in China. I need that to fly this way reduce all the risks related to open. Yeah. And, you know, I’m just trying to help add some, you know, a lot of, I don’t want to, I know we have a lot of our friends in the community that are sourcing agents or QC agents, but I mean, this is also a better, if you’re big enough, you could save money by doing hiring people instead of using.
[00:29:47] Services, if you’re doing enough volume and then you don’t even need to have a company either. So it does sound like it’s a good hack.
[00:30:00] Testing the Chinese market. This is especially for maybe it’s small companies that need don’t want to invest at the beginning all the money and opening a company because they don’t know the market. So what they can do again, is I have someone here that can conduct a market research or, you know, someone that can understand better the, the, the country, how it works and in this way, again, if you then after, after that, if you’re not satisfied with the market, if you think you not the best solution for you, you can always take a step back and say, I don’t have a company and just close the employment relationship and that’s it. I finished, I finished my, my adventure in China.
[00:30:44] Of course, then if you want to do something more, maybe then you can think about opening a company or structured that in a different way. And the last thing is you want to look at that. We want to hire employees here because all, because you are already in China. Or because you need the employees, you maybe have a branch office, or maybe if you need to hire contractors, freelancers.
[00:31:11] So some kind of, all kinds of talents that you have in mind and with the PEO, you don’t have to, but I have to oen a company. You don’t, you don’t have that risk anymore. Opening a company by going through the procedure that takes time and money. And so yeah, in the, some of the pros and cons of using a PEO is like, as I said, there’s really low risk in using this kind of solution.
[00:31:38] You can basically go away when you want, instead of opening a company and then you have to go through the process of closure and all the tax and accounting stuff. It’s a flexible solution because need you can hire new employees. You can, you have only that kind of employment relationship to manage. You never, you don’t have to do all the other stuff.
[00:32:00] Plus you will have a guarantee or they track compliance and a better communication with government. Those really the PEO Agencies, they are experts in HR and payroll, so they know how to deal with government. They know all the policies. They know how to declare taxes, how to pay the social benefits, all this type of stuff.
[00:32:19] That is usually a really big problem for us. Of course the costs, there are some costs that is, for example, it’s not so secure for the employee because the PEO becomes the legal employer. So the employee feels kind of a detached from the original company. Okay. I am in contact with him. But I’m still, you’re not my legal employer anymore.
[00:32:42] If you, if you understand what I mean, like this is kind of detachment from the, yeah. Yeah. It’s, it’s hard to develop the local brand because your company is not here. So, and I still want to do some events that show maybe the opening shops. So show your products. It can become a little bit more complicated to develop the local.
[00:33:07] And it’s especially recently sad to hire foreign employees because of the visa policies. That’s the biggest problem.
[00:33:19] Can I ask you Rose, what do you think? What do you think of this as like a local Chinese too? If you were to have opportunity, you think Chinese would prefer have a difference of a PEO versus like directly with the company and as the Chinese don’t have a direct company rather? Well, I think also it depends on the business, the business itself and the model, and also the side.
[00:33:47] So if, if this, as a testing period, so probably higher, but you know, PEO is easier, but if something that we set our mind to do and be confident, then yeah. We just know, so that the company, because it’s a Chinese, if we set up a company in China, it’s actually quite easy, especially in China, the cost is almost.
[00:34:15] Or Chinese, but I guess this is more, this is a, yeah. I mean, it’s always difficult, I guess, everywhere for, for
[00:34:28] especially, or it’s, it’s not as easy in China for foreigners to open up. Yeah. For foreigners. I think it’s easy to hire freelancers at the very beginning. And then. And then yes. And then later you can set up your company up if needed, but these days, a lot of his business are relatively small, so not necessarily to do that.
[00:35:00] So the last part is about how to use a PEO. Basically it’s what a PEO does for the company. The client, the client company identifies the candidate to hire, if ever you know someone you want to hire, you present this person to the, to the agency and the PEO verifies if the. There is a eligibility, eligibility for the employment to be all this kind of great onboarding procedure.
[00:35:32] And then the PEO hires the employee for you basically sign the employment contracts for you, the managers, all the onboarding part. While the employer, the client company manages the daily task on the employee, some communication between the employee and employer. It’s about the big task on the other part onboarding.
[00:35:55] And then especially later, HR and payroll are managed by the PEO and the PEO is again, is also responsible of all the communication with the government. If there, for example, if there are labor issues and have some kind of problem with the government. The PEO can support the company. That’s very important in China.
[00:36:17] Yeah. Yeah. It is very important. And again, the PEO is responsible for the compliance and manages all the employment issues. And the only in case of termination that the employers, the employer has the cost. So you have to pay the cost for termination and the PEO manages all the termination. So like, basically in the end isyou client, you company, you just manage the cost
[00:36:48] The rest is managed by the PEO. Is there must be some kind of security deposit that the employer pays to the PEO, there must be. Yeah, correct. There is a deposit in case because you know, the, the PEO then has to pay the salary to the employee. So in case, for example, there, the employer and company disappears. They don’t want to pay, the PEO still has the responsibility to pay the employee.
[00:37:16] Because otherwise then it can have problem with, legal relationship between employee and the PEO and also with the government, if you don’t, I mean, and that’s a big problem. So that’s it for today. That is the, the end. So Giacomo. Thank you so much for sharing in Shanghai, HRone, doing the digital marketing.
[00:37:43] You have photos to see the slide. That’s your email, but maybe just for the audio, we’ll also have an audio version of this. So maybe if you want to just share any kind of contact with them. For any question, you can visit our website, hrone.com or get in touch with me at email@example.com. Or easier way firstname.lastname@example.org
[00:38:06] Maybe it’s easier to remember. Okay. Sure. Sure, sure. Thank you so much. I think we have some time for questions. Maybe turn off SlideShare and make it round table form. So is there any, any, I have questions, but if there’s questions from the, from the people tuning in live for Giaomo, I think that was really great.
[00:38:27] Honestly, I learned some new things. I kind of feel like I wish I knew this. There’s another thing about this, or sometimes I learned stuff I wish I knew like 10 years ago. I know I set up a WOFE. It was a lot of work. Oh, Michael was saying, okay, sport can be useful for seasonal, right. Seasonality
[00:38:52] maybe three months, six months just for our project. He was the best solution because otherwise you have to go through the company. One important thing that probably, I didn’t say, in hiring employees, you need to have a, a legal entity. You cannot hire without that. So there are two ways.
[00:39:14] That’s the, that’s the only way otherwise everything is illegal. And that is a big problem.
[00:39:24] Yeah. I mean, I don’t want to scare people, but I have, oh, sorry. It’s just. I’ve had a lot of HR. I’ve had HR issues in the past. And you know, I think, I think employees know they have rights. I mean, they do. And sometimes, sometimes the employer is not good to the employee, but sometimes the employee also tries, I think, sometimes to take advantage of the opportunity.
[00:39:48] So sometimes the employee will say, we don’t need to sign a contract. We don’t need no need, we saved money. But then later three months, six months, a year later, Terminate the agreements, then they’re like, oh, you need to pay me for severance. You got to pay. Right. And then. Okay. I’ll pay you one month, two month.
[00:40:10] They’re like, no, no, you fixed. They said you don’t pay. It can really, cause they can really get you in trouble if they go to the labor department. Yeah. And they say that this foreign company is not paying taxes, not paying me with a contract. They won’t say it was me that suggested that. Or I agreed.
[00:40:27] They’ll just say the employer. They’re trying to not do these illegal and it’s not the Employee’s fault. It’s the employer’s fault. Be some penalties, right? It can be a big problem.
[00:40:47] Yeah, there was a question from Zac in the chat. Thanks Zac. Cause I just got good questions. He couldn’t read out loud for those. Could an employer-employee, an employee via PEO initially then bring the employee fully onboard bypassing PEO. Yeah, you can, especially, you know, when, if your idea then is to open a company, but you can do is at the beginning and the first stage you hire an employee with the PEO then of course, if you open a company yeah.
[00:41:19] You can transfer all the employment relationship to your new company, too.
[00:41:27] Yeah. So, yeah, it’s possible, Zac. I mean, I think probably though Giacomo’s company would definitely help you do that, but I guess you probably should also ask any PEO some might not do that. Maybe. I think that’s Giacomo’s policy. We have also in a trust paying the employees is something really common that.
[00:41:52] I think if you don’t do that, I don’t, I don’t see why we know. We know without any problem, just employment relationship to the new problem. Is there a process involved in terms of costs or any other process to transfer the employee over? Must’ve been well easily. There is that there is a cost when, when you transfer for the procedure, There’s no, there’s no, actually no special things to do extra for them.
[00:42:24] This is normal.
[00:42:28] Okay, great. So again, like I said, this is a double header night. This is the webinar, which I think we’re basically wrapping up now. I mean, unless there’s last couple of questions and then in a, in a few more minutes, we’ll have our mastermind for members, GFAVIP only, but first this we’ll make sure we wrap this one up and I’m just kind of making sure people are aware of that.
[00:42:49] And we have another question. Any, any final questions for Giacomo? I really appreciate it. I know he prepared a lot for this and you could, you could tell, I mean, you can see the research and the data, so I really appreciate that. And do my last question is just for one, like, I think Zac has another, oh, sorry.
[00:43:11] Thank you. Thank you. Giacomo, I don’t know how relevant this is to, it’s probably not very relevant to PEO both wondering how legal it is to hire Chinese, Chinese people as contractors directly from say a foreign county, two of them without being in China itself. I mean, if you, we can, I feel, can I just.
[00:43:41] Not PEO per se, but, so, so, so for UK US-based company, could they hire legally contractors based in China without using PEO or any China regulation? That’s the, that’s the problem again, if you don’t have a company or you don’t use a PEO, it becomes illegal because it’salways, you know, the, the Chinese law protects the employees.
[00:44:03] So if you don’t have a contractor that protects them, it’s become illegal. That’s the destiny. Okay. The way I accept opening a company of WOFE. Yeah. Yeah. I mean, I guess I think Rose wants to sell, of course, if there are like a freelancer or a consultant that might be able to kind of, but still, I think it’s not really legal.
[00:44:29] Maybe if they don’t have none of a concept, they can not join the social links. Yeah, they definitely can’t get any benefits, any government benefits, contract and English. And like, so the law is subject to the law. You know, the local law, meaning the employers countries, all that’s happens is that they go there’s a day.
[00:45:02] A company in the U S of course they can, they can, they can kind of hire, but they will not have access to social insurance. And if they employ, then maybe you face the relationship with employee. An employee goes again to the labor bureau and says, oh, the employer didn’t pay me. It can be a problem for your company.
[00:45:24] It is, to be honest, I had that experience before and then I didn’t get, I mean, there’s a long time ago when I was contact, the labor department, I figure that’s, you know, that’s an English conscience, the lowest, you know, the plus countries. Yeah, that’s very helpful. Thank you guys. Okay. Thank you so much for this.
[00:45:50] And this’ll be on the, on the podcast next week. We’ll have a URL and everything for people, but it’s great to have it live and thank you, Giacomo for sharing and Rose here with me today. That’s a great attendance. So, yeah, I think we have his contact. We’ll put it inthe show notes, you know, you’ll see it on the show notes on the website for any information you might need.
[00:46:12] And I think we’ll take a quick five, 10 minute break for the next session for those that are in for it. And thank you so much again, Giacomo and HROne.
[00:46:23] All right. Thank you, Giacomo. Thank you, Rose. Thank you people tuning in live to the show. A webinar. I’m exhausted. I’ll be telling you, I’m telling you right now. I mean, I land at three o’clock in the morning on like a Thursday in Schenzhen airport in a, in a, in a rainstorm with two kids. And all my wife is the strongest one, probably out of all of us.
[00:46:45] She’s, keeping us going sometimes, but we, you know, and then elevator was broke. I think I may be black about this last episode, maybe, but it’s been intense, so intense. But that office, you know, obviously in China, the government, everybody follows a government, there’s government wants to do something and government throws money at it.
[00:47:05] Government gives you free stuff. You know, there was some lass I met somebody who like, I think 30 million douyin followers or fans. I know her English is good too. Maybe she can be a guest in the show. I met her 10 years ago at another event. You know, this is, I guess Mike won. She, you know, I meet people and they remember me and we have these, you know, a few actually there, it’s a pretty awesome little office of creators.
[00:47:29] And, you know, I guess I would call myself a creator, an artist. I’m not really a business person. So maybe it’s a good home for me talking to some people buy Amazon stuff there, you know, the kind of acquisitions, the, the. Trends of the Amazon, shutdowns of Chinese sellers, et cetera, et cetera. Sure. So probably be there more, I guess I’ll do more shows.
[00:47:50] Live. And we also had ourGFAVIP member call. Thank you members for supporting this show as well. These, these are ways to support these show in this content. If you enjoy it, you know, there’s a sponsors like mercury, there’s the members like GFAVIP. Those are ways that have kept the lights on with the show. You know, although it is an act of love, right.
[00:48:10] I love what I do. And I hope you love listening to this while you are in the blah-blah-blah session. So you can just stop now, if you feel like it, nothing you’re going to learn here, but I don’t know. I just feel like such full circle back to here. You know, we’ve all been thrusts or roller coasters sure.
[00:48:27] Of our lives. You know, I just met somebody who’s liquidating his wine sales in China for like rock bottom prices. And Wendy and I met him in a warehouse, his warehouse, and two Chinese friends that Wendy bought a bunch of. Cartons of, um, did some deal with Wechat in a, in a, in a warehouse. And he’s like saying how, how much his life in business and everything has changed.
[00:48:48] So we’re all going through massive change and, you know, probably going to have an office in China, again, probably going to hire some people in an office in China. Maybe there’ll be a free office as a perk.So that might be a perk and it may be more content there. I mean, I’m in my comfort zone here in my little apartment behind closed doors, no screaming kids.
[00:49:10] They’re actually out with Wendy. So I got some quiet time, but probably we’ll make more shows in that studio. I mean, man, I don’t know how much thousands of dollars that equipment cost and there’s like six different rooms of all of this. High-end streamings equipment, so can get rid of, and it makes it more fun.
[00:49:29] You know, when you’re on the spotlight, you got lights on. I got like six people looking at you in the studio. You got a screen of people on a live webinar, or you got a live guests. I mean, I don’t know. I hope you enjoyed the show is same. I mean, there was slide. So it might make more sense if you’re watching it in a YouTube or we actually have a iTunes video podcast.
[00:49:48] I think it works. I hope it works. But yeah, I think, you know, I love content, actually. There’s a bunch of other updates. There’s lots of other updates through a partnership we’ve invested in Shenzhen party, or nowshenzhen.com. Actually Brent was on the show at least once or twice here in gold information.
[00:50:03] I’m not sure how he still listens, but I hope he does. Maybe he does. So that’s the transition, you know, probably going to have like a training center in Shenzhen and probably going to do some kind of e-commerce incubator and we were doing all the aggregator stuff or working with factories on routers for a hardware project on crowdfunding.
[00:50:20] I mean, there’s just. Happening so much happening so much happening, it’s overwhelming. I mean, Frederick at China import all, shot me a message. What am I up to? I guess I just, I’m probably gonna have like a half hour show, just talking about the different businesses that I’m doing now. It’s like freaking nuts, but it’s all mostly working somewhat.
[00:50:40] I mean, and I think we need to kind of open up the book and let some of the people in the community here like maybe get involved. I think we’re at that point, maybe that should be an upcoming show or a live stream. But you know, rose is amazing. We get her more involved. There’s obviously our amazing team in the Philippines and around the world with Shadstone.
[00:51:01] LJ is definitely helping making the show happen. And there’s just so many amazing people supporting. But we need even more, there’s limitless amount of opportunity and you know, we’re probably gonna have, of course the online team. Don’t worry if you’re listening, Alvin, you’re amazing. Obviously we have our amazing online team, but there’s probably going to start to be more of this offline in Shenzhen.
[00:51:21] Office Shenzhen team, Shenzhen events, and streaming. And I’m trying my best to try to balance online and offline connecting. I love connecting people through content and events and, and, uh, 3 C’s a buddy and a mentor, Jeff gave me. I’m three CS content, community, and consulting. That’s what I gotta do.
[00:51:46] So a lot of me’s in this right now, but I want to share more with you. Maybe, maybe, I dunno. There’s so many guests coming up. There’s so much content coming up. I mean, I’m probably going to be hitting a road, maybe studio instead of that going through their office. But there’s some places I want to show you around.
[00:52:02] I’m thinking about doing data on Shenzhen or update on China. After COVID people asked me to do videos, we’ve got Mike’sblog.com, our vlog, or a course on YouTube, but I prefer websites just so much happening so much happening. So I hope this is helpful to you. You know, you could always skip this blah-blah-blah session, but that’s it I’m beat.
[00:52:26] Take an early night. Sometimes you gotta just do that. You know, especially now with this post COVID world, we’re going through massive transformations and I think getting a good night’s rest is important too, that take care of your health, take care of your mental health. Unfortunately, there’s been suicides and you know, like depression across the board.
[00:52:48] I mean, I’m obviously I’m not, I didn’t commit suicide, but I’ve been through depression the last year and a half. I think a lot of you have, it’s something we don’t talk about, but we just got to realize we’re all going through hard times. There’s lots of opportunity uses we’ve as a time to reinvent yourself, reinvent your business, reinvent your relationship.
[00:53:08] And everything is if there’s ever a better, ever a better excuse to tell somebody something’s changing is COVID. So use that to our advantage. All right, everybody. Thanks for listening all the way through the end did this blah-blah-blah session global from asia.com/no company hiring people in China without a company, which actually I think I recommend. I wouldn’t
[00:53:28] I mean, and of course it depends on your long-term goals, but it seems like it makes sense for the short term, Giacomo seems like a good, really nice guy. So thanks for sharing that amazing stuff with us and wish you all the best. Bye-bye. Tp get more info about running an international business. Please visit our website at www.globalfromasia.com.
[00:53:48] That’s www.globalfromasia.com. Also be sure to subscribe to our iTunes feed. Thanks for tuning in.