Outsourced Secretarial Services for New Entrants to the Chinese Market

Jan 2015 | Servcorp

SHANGHAI – Companies in the early stage of operations in China often aim to stay as lean as possible. Such organizations, like start-ups or established foreign companies exploring their options in China, usually consist of only a few key team members. While having a full-time secretary on staff may not seem like a high priority, there are many cases where new teams in China can benefit from the assistance of a local secretary.

This is especially true where the company does not have anyone on staff with a sufficient level of spoken and written Chinese. Under these conditions, mundane tasks like opening a bank account or booking a train ticket can become quite a challenge for one's operations in China.

Recognizing this, a number of companies in China now offer secretarial services that can be booked on-demand, as either standalone services or as an add-on to a serviced office.

Contracting the services of a secretary on a pay-per-use basis cancels out many of the drawbacks of directly hiring support staff in China. For one, secretaries will have been pre-selected, trained and interviewed by the service provider (such as Servcorp). This removes the need for companies to go through the overall hiring process and deal with China's high turnover rate. The company will also forgo the need to offer the secretary or assistant a fixed-term contract, which in China are notoriously difficult to terminate.

Using Serviced Offices for Your China Growth Strategy

In terms of legal arrangements, a company using  secretarial services is not considered the employer, but instead pays the service provider for the secretarial time used. Traditionally, even for a secretary hired on a part-time basis, the employer would have to pay social insurance and withhold individual income tax. Apart from being an additional cost, the registration and calculation of payments can increase the administrative burden on a company as well.

Acting as a client instead of an employer can release the company of a host of other potential liabilities as well. For one, it is usually the employer who will face liability for work-related injuries suffered by an employee. This may be hard to imagine in an office setting, but pay-per-use secretaries often accompany users on business trips, factory visits and other out of office activities to act as interpreter, where such accidents may indeed occur.

End of the Line: Terminating an Employee in China

There are, however, several downsides to consider. A secretary that is paid for on-demand services and shared with other clients may not have as good of an understanding of the client's business as a full-time staff member would have. Once companies have a more certain footing in China, it might be worthwhile to consider employing the services of a secretary who is more exclusively dedicated to your business.

Secondly, not all providers of secretarial services assume liability for things like mistakes made or injuries suffered by the secretary. Companies considering such services are well-advised to inquire into this, especially to be sure of the legal status (employment, dispatch etc.) of the arrangement.

Lastly, because such secretaries are often shared among multiple clients at the same time, they may be exposed to sensitive or confidential information about the company. This would especially be the case when the company uses the secretary to translate important company documents, assist with banking transactions or if he/she has access to the company chop. To guard against this, companies such as Servcorp make it a standard practice for secretaries to sign confidentiality agreements.

That said, pay-per-use secretarial services can provide an interesting solution to a number of problems both general and specific to doing business in China, especially for newly entrants to the country's business climate.