Li Yong, Deputy Secretary General, China Association of International Trade
Since the economic reform and opening up, China's vast market potential and fast-growing economy have attracted the attention of foreign businesses. Having a presence in China is key to tapping into market opportunities. Foreign entry into the market takes a number of different forms such as representative offices, equity joint ventures,
Since the beginning of China's opening up to the outside world, representative offices have been frequently used and are the
Technically, representative offices do not have independent legal person status and they are not supposed to employ staff as joint
Employment service providers
In the early days of the opening up, when most foreign representative offices were concentrated in Beijing, the provision of Chinese nationals to work in foreign representative offices was monopolised by Beijing Foreign Enterprise Services Corporation (known as FESCO). Its services were designed to help foreign representative offices handle practical issues of human resource management such as identification of qualified local staff, welfare, pensions, residency and mobility. This monopoly ended when other government sponsored 'foreign services' companies were established to
At present there are over 70 authorized foreign services companies providing local staff to representative offices in 25
China Star Corporation for International Economic and Technical Cooperation (China Star Corporation);
China International Intellectech Corporation (CIIC);
China International Enterprises Cooperation Co (CIECCO);
China International Talents Development Centre (CITDC).
The key functions of foreign employment service providers in China include, but are not limited to, the following:
Providing assistance to customers setting up representative offices in China. This service is normally fee-based and designed to facilitate the process of application;
Manage as proxy labour relations of the staff assigned to foreign representative offices. Normally, foreign employment service companies maintain
Providing welfare benefits to the deployed staff depending on the terms and conditions agreed between the service companies and foreign representative offices, although the latter can deal with welfare benefits on its own;
Managing personnel logistics such as the management of personal archives (a record file containing information about staff's education, career achievements, professional qualifications etc); transferring archives from previous
Organizing job fairs and arrange job advertisements for foreign representative offices and other foreign-
Head-hunting senior management staff according to customer requirements;
Offering various other services related to expatriate staff, such as obtaining multi-entry visas, work permits and residence permits.
How to recruit?
Normal procedure requires a foreign representative office to enter into an employment service contract with a government authorized service agency. On the strength of this contract, the authorized employment service agency will recommend candidates to the representative office. The service agency will also sign contracts with candidates against its contract with the representative office.
Normally, staff will serve a probation period before official employment begins. According to the Labour Law of the People's Republic of China, the probation period should not exceed 15 days for a six month contract, 30 days for a six to twelve month contract and 60 days for a one to two year contract. The maximum probation period should not exceed six months.
Relevant laws and regulations provide that the minimum ratio of Chinese staff in foreign representative offices is 1:1, which means that if you have one expatriate staff member in the office, there must be at least one local member of staff. If the recommended candidates do not meet requirements, the representative offices may look for suitable staff on their own. They can even agree on the terms and conditions regarding salaries, compensation packages and other benefits with the candidates they find by
Dismissal of staff
Normally, there are two reasons for staff to leave the representative office. One is voluntary resignation and the other dismissal for reasons such as
It is illegal to dismiss an employee who is pregnant, nursing or on maternity leave, or any staff receiving prescribed treatment for