Employer of record vs contracting through an agency

Three ways to engage an engineer in China, and they are not competing versions of the same thing — they buy different things. Here is what each gives you, what it costs, and the cases where we would tell you to use one of the other two.

The three models

Direct contract Employer of record Via a UK intermediary
Who pays into China You The EOR The intermediary
You need an entity there No No No
Relationship in China Contractor Employee of the EOR Contractor
Statutory benefits No Yes No
Who directs the work You You You
Your admin burden High Low Low
Typical cost shape Rate only Salary + % or fee/head One inclusive rate
Ending it Contract notice Local employment law Contract notice

Direct contract

You contract with and pay the engineer yourself. It is the cheapest line item and the most work, and the work is the kind that recurs every month: cross-border payment mechanics, currency, and the documentation each bank wants. It also leaves you closest to the question of whether a long-running, directed contractor relationship is really employment — decided on facts rather than on what the contract is called. Paying an engineer in China goes through the mechanics.

Use it when: the engagement is short, small and self-contained, and you have someone who will own the administration without resenting it.

Employer of record

An EOR employs the person locally on your behalf. It is the most complete answer and the only one of the three that produces genuine employment: local contract, statutory contributions, benefits, and the protections that go with them.

You pay for that completeness, usually as a percentage of salary or a fixed monthly fee per head on top. The other cost is flexibility — because it is employment, ending it follows Chinese employment law rather than a notice clause, and that is a feature if you are hiring for years and a friction if you are not sure yet.

Use it when: you want a long-term team member on employment terms, the person cares about benefits and security, or your own policy requires that anyone working on your product is somebody's employee rather than a contractor.

We will say so if that is your situation. It is not what we do, and an EOR is the right instrument for it.

Via a UK intermediary

This is our model. You contract with ProdReady Recruitment, a UK limited company; we contract with and pay the engineer; the engineer works to your team. You get one invoice in sterling or dollars from a UK supplier, and no part of the cross-border problem reaches your finance function.

What you are buying is specifically the removal of friction, plus the sourcing. What you are not buying is a managed service — we are not between you and the engineer on delivery, and we do not want to be. They join your standups and work your backlog.

Use it when: you want a specific engineer working on your product quickly, on contractor terms, without opening an entity or learning a payment regime.

What none of the three changes

Choosing a model settles who pays whom. It settles less than people expect about the rest:

  • IP still depends on the contract chain, and the chain is longer with an intermediary or an EOR than with a direct contract. More links, more places for it to fail — who owns the IP.
  • Export control is unaffected. Whether you may grant this person access to particular material is a question about the person and the material, not the payment route. No engagement model makes it go away — export control when your AI engineer is in China.
  • Data protection is unaffected. Personal data reaching China is an international transfer under UK GDPR whoever is issuing the invoice.
  • The hours are the hours. No model moves China out of UTC+8 — working-hours overlap.

Questions that separate providers

Whichever route you choose, these are the ones that reveal how a provider actually operates:

  • Will you show me your contract with the engineer, not just mine with you?
  • Who carries the currency risk, and what happens if the rate moves 5%?
  • If I stop paying you, when does the engineer stop being paid?
  • If you are acquired or wound up, what happens to my IP chain and my engineer?
  • What is your margin? (Most will not say. Whether they say so straightforwardly is itself informative.)
  • Can I hire this person directly later, and on what terms?

The third and fourth are the ones worth pressing. They are about what happens when something goes wrong, and a provider who has thought about that will answer immediately.


This is one of 6 guides supporting our main page on hiring remote Chinese AI engineers, which covers rates, the engagement model and how a placement actually starts.

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