As someone who’s spent years untangling the threads of international workforce strategy, I’ve seen firsthand just how tough the European expansion path can seem, especially for Chinese electric vehicle (EV) manufacturers. The world’s hunger for sustainable transport is pushing borders open, but employment law is one border that always stands tall. Many founders and HR leaders email me with one core question: Is there a way to legally hire in Europe without forming a subsidiary? Or, to put it more simply, must every Chinese EV firm open a European company just to get boots on the ground?
This article draws on what I have learned guiding business clients through this challenge. I’ll cut through the noise, share why this question matters now, and offer clear perspectives on choices like the Employer of Record (EOR) model vs. setting up a local entity. Being part of a project like EWS Limited, which links business ambitions with practical workforce solutions worldwide, gives me a front row seat to these complexities—so think of this as a tour, not a lecture.
If you’re reading this from an office in Shanghai, Shenzhen, or Beijing, this drive may feel familiar. European consumers are shifting towards electric mobility rapidly. Governments throughout the European Union are offering rich incentives for EV adoption, and not a week goes by without new demand in countries like Germany, France, Sweden, and the Netherlands. Everyone in the sector is talking about it.
Think small, move fast—that’s the startup way, and EV is no exception.
But can it be done above board? Can a company based solely in China really hire workers in the Netherlands, Germany, Sweden, or anywhere in Europe without opening a local company first?
European employment law is sometimes painted as a wall of rules, but in my experience, it’s actually more like a tricky labyrinth. Whether you want to hire a sales manager in France or an R&D specialist in Denmark, the main legal question is: Does the act of engaging a European-based worker require you to open a subsidiary, or is there another path?
There are a few central points to know:
In my work with EWS Limited, I’ve seen that while direct hiring without a local presence is technically non-compliant in most European markets, there’s a compliant ‘middle way’ that is well established: the Employer of Record model.
The term Employer of Record (EOR) sounds like corporate jargon, but the concept is quite simple.
You drive the business. An EOR does the local hiring.
Under the EOR model, a business (like a Chinese EV manufacturer) selects local talent in Europe. But instead of employing the workers directly, the EOR formally employs them, taking care of all payroll, taxes, employment contracts, and statutory benefits. The workers remain under the full daily direction of the Chinese EV company, but their official employment relationship is with the EOR in the local country.
It’s like a bridge: The EOR stands as the legal employer for local compliance, while the business keeps operational control.
According to a recent GlobeNewswire report, the EOR market worldwide is expected to reach $3,745.43 billion by 2030, expanding at a steady compound annual growth rate. Growth in Europe, especially, is due to compliance-driven needs—precisely the challenges Chinese EV manufacturers face.
Global Growth Insights notes that Europe is seeing significant growth thanks to compliance needs and the rise in cross-border M&A activity, making EOR solutions more attractive for businesses expanding internationally (Global Growth Insights).
Why? Because the EOR route lets you:
At some point, every expanding EV firm—whether in Europe or elsewhere—faces the classic corporate fork in the road: keep using an EOR, or open a branch or subsidiary?
From my experience, setting up a European subsidiary takes time and, frankly, patience. Each country has its procedures, but there are shared themes:
It can take a few weeks or several months—sometimes even longer, especially if you’re pioneering EV tech that attracts extra regulatory scrutiny. Costs can escalate quickly, and early-stage teams sometimes find themselves bogged down in details, far from the nimble hiring they first pictured.
In the search for a quick fix, I often get asked: “What if we just pay local talent as contractors, bypassing all the entity and EOR hassles?”
My reply is always measured: This path is rarely compliant or safe in Europe. Most European countries have tightened their rules over the years to crack down on misclassified workers. A sales engineer or technician that is supervised, scheduled, or depends economically on you is likely to be seen as an employee under local law, no matter what your contract states. Fines can be high, and public backlash even higher—for a proud EV brand, it’s not worth the risk.
Let me share a practical story. I worked with a Chinese EV firm wanting to hire service engineers and marketing specialists in Denmark and Sweden. Opening two companies just for five initial hires felt excessive. Instead, through an EOR in Denmark and EOR in Sweden, they got workers on payroll, paid local taxes, and offered statutory benefits in just two weeks—legal, fast, and accepted by both governments and the employees themselves.
Where’s the catch? Well, EOR is not magic. If you have long-term, large-scale plans, you may eventually outgrow it. The EOR solution is for agility—getting to market and building local presence before you commit to forming a full subsidiary.
These countries have their own quirks. I’ve seen Chinese EV manufacturers run successful teams in Germany using a local EOR—often as a bridge before eventually forming a German GmbH. The same goes for the Netherlands, where local EOR solutions make it easy to test sales before forming a BV company. France, meanwhile, is famous for its strict labor codes, yet through a French EOR, you can hire and manage French talent lawfully without a subsidiary.
Comparing EOR to subsidiary: the pros and consIn my work with dozens of international launches, I often weigh the following for clients:
Don’t think of EOR as a forever decision. Think of it as a launchpad.
Readers ask me how projects like EWS Limited play into this story. EWS Limited focuses precisely on these scenarios, walking companies through the steps to stay on the right side of European law, whether that’s payroll outsourcing, help with global mobility, or serving as an employer of record across 100+ countries.
I’ve found our model suits Chinese EV startups and scale-ups well: there’s no need for a physical office unless you want one; everything from hiring to offboarding is handled; you retain all operational control. For mid-sized or established manufacturers, it’s a practical transition path—you move to a subsidiary when the time is right, not before.
On top of that, we focus on local compliance, especially where EU regulations can feel overwhelming. Payroll in Sweden is not the same as payroll in Germany—just ask anyone who’s managed both. Projects like EWS stay on top of those details to keep things running smoothly.
From experience, most Chinese EV companies start by looking at their goals for the first year or two. Are you planning to hire just a sales team, or do you need service techs, engineers, or back-office staff in five countries?
For more detailed insights about the EOR process in different countries, you can check the country-specific guidance available for Germany, France, Denmark, Sweden, and the Netherlands.
No discussion would be honest without mention of risks. I urge every Chinese EV manager to consider a few things before moving forward.
For companies unsure about the compliance picture, partnering with an expert helps avoid surprises. When in doubt, trust but verify: it’s not just about hiring fast, it’s about hiring right.
The past few years have seen a huge rise in companies (large and small) using EOR models to enter foreign markets. Right now, EOR is riding a strong wave given international talent shortages, new regulations, and companies paddling fast to reach new buyers.
Yet, I wouldn’t say EOR is the future for every employee forever. Once a company reaches a tipping point—say, a full European operations or manufacturing base—it almost always makes sense to set up a subsidiary. Until then, EOR offers flexibility for small teams and early phase expansion, all while standing on solid legal ground.
ConclusionSo, can a Chinese EV manufacturer really hire in Europe—Germany, France, Denmark, Sweden, the Netherlands—without registering a new subsidiary? Yes, you can. The Employer of Record model is established, widely used, and respected as a compliant route, especially for sales, technical, and support professionals.
I’ve watched Chinese companies quickly enter European markets, stay compliant, test ideas, and scale with confidence, thanks to this approach. Yes, it pays to ask the right questions early. If you want a trusted partner who can help link your global ambitions with local hiring realities, the EWS Limited team has the experience, legal background, and country-specific support to move you forward safely.
Legal hiring is the first step to long-term market success.
Ready to remove barriers and build your European team? Get in touch with EWS Limited today and let’s map out the right, risk-free route for your journey.
A subsidiary company in Europe is a legally separate business entity formed in a European country, owned or controlled by a parent company (in this case, a Chinese EV manufacturer). It has its own registration, tax ID, bank accounts, and meets all local requirements for hiring staff, holding assets, and entering contracts. It gives full operational autonomy in the market, but brings more complexity and cost compared to other models like EOR.
Chinese EV firms can hire legally in Europe either by establishing a local company (subsidiary) or by using an Employer of Record (EOR) service. The EOR acts as the formal employer on paper, ensuring compliance with local payroll, tax, and labor laws, while the Chinese company directs the day-to-day work. This approach is widely accepted, especially for pilot teams, sales, or technical specialists.
It’s not always necessary to open a subsidiary right away. For small or early-stage teams, using an EOR is often a faster, safer, and less expensive option. Many EV manufactures adopt a phased approach: starting with EOR to test the market, then setting up a local entity once business scales up. However, when building a large operation or needing full local contracts (like owning real estate or big government buys), forming a subsidiary becomes more practical.
The main alternative is hiring through an Employer of Record (EOR), which allows you to employ local talent compliantly without direct local incorporation. Other temporary solutions may include engaging independent contractors, but this carries big compliance risks in Europe and is rarely advised for roles under your direct control. EOR, on the other hand, covers payroll, contracts, and compliance, providing a risk-free path for teams of any size.
Costs can vary, but with an EOR, Chinese EV manufacturers pay a set monthly service fee per employee on top of salary and taxes. This often ranges from 10% to 20% of gross payroll, depending on country, size, and services needed. It is almost always cheaper upfront than forming a company, which involves legal, accounting, registration, and ongoing administrative costs that add up quickly. Over time, companies may find a subsidiary makes sense for a larger footprint, but EOR is clearly the low-risk, low-barrier approach for starting out.
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