A Chinese company entering the UK should not select an EOR, subsidiary, contractor or secondment model on speed and headline cost alone. The decision record must identify who employs, directs, pays, sponsors and can terminate each person, then open the linked payroll, immigration, tax, IP, data and mainland funding workstreams.
1. Define the operating facts
Record activities, authority to contract, location, headcount and duration; who supervises work; who bears cost and risk; IP/data access; worker nationality and mobility; planned funding; and exit path. Model names are not legal conclusions.
2. Compare the structures
An EOR can accelerate initial hiring, but the contract must allocate employer duties, direction, payroll, immigration, IP, confidentiality, data, claims and exit. A UK subsidiary supports direct hiring and governance but adds incorporation, banking, payroll, pensions, tax, sponsor and compliance duties. Agency and contractor models require status analysis against actual working practices. A secondment needs home/host allocation and a documented return or termination plan.
3. Determine status twice
UK employment rights and tax status are related but distinct. Assess personal service, control, substitution, mutuality, integration, financial risk and the whole relationship; then run any applicable off-payroll/IR35 client and fee-payer analysis. A contract label or EOR invoice does not settle either test.
4. Open payroll and pension before start
Identify the PAYE employer or fee-payer, registration route, software/agent, RTI owner, NIC, benefits, expenses, pension auto-enrolment and records before the first payment. Use current thresholds for budgeting and timestamp them; do not embed a rate as a permanent planning assumption.
5. Coordinate immigration and mobility
Decide whether the employing structure can sponsor, which route fits and who owns sponsor compliance. For seconded or mobile staff, coordinate visa, payroll, tax residence, social security, travel, home/host benefits and repatriation. Immigration permission does not determine employment or tax status.
6. Keep PE and governance as separate gates
People negotiating or concluding business, a fixed place, management activity and the duration/substance of UK operations can create tax and governance questions. An EOR does not guarantee that the Chinese parent lacks a UK permanent establishment, and payroll registration does not by itself prove one. Escalate the actual facts.
7. Classify the mainland funding path
Separate capital for a UK subsidiary, shareholder or intercompany funding, service/EOR fees, payroll funding and secondment recharges. Determine whether the plan is an outbound investment under current rules, which NDRC/MOFCOM or State Council process applies, what SAFE/bank registration and evidence is needed, and whether the approved purpose and amount cover later remittances. Do not route investment capital as an ordinary service payment.
8. Complete the employment lifecycle
Before offers, settle authority, contract/local policies, IP/confidentiality, HR data, health and safety, leave/benefits, collective consultation and grievance/discipline ownership. Before restructuring or exit, assess notice, unfair dismissal, redundancy, TUPE/collective consultation, immigration and data retention.
9. Use a signed decision record
The board record should state the selected model, rejected alternatives, employer/client/fee-payer/sponsor, status evidence, payroll and pension owners, PE/tax advice, ODI/FX route, IP/data controls, exit plan, residual risks and review triggers. Reopen it when duties, control, headcount, duration, funding or law changes.
For a live structure, counsel must resolve the source-pack reviewer questions. This guide is not approval of a worker classification, tax position, immigration route, ODI filing or remittance.
Selected official sources
- UK employment status
- HMRC running payroll
- HMRC off-payroll working rules
- PRC outbound-investment provisions
- SAFE ODI foreign-exchange rules
General information only, not legal advice. Laws, guidance and operational facts can change. Obtain advice for the relevant jurisdictions and current facts.