Standing in Nanjing, looking west across thousands of kilometers, I sometimes try to picture the cobbled streets of Naples, the historic markets of Barcelona, or the sunny Lisbon coast. Southern Europe has always carried a kind of mythic allure for me: colorful, deeply rooted cultures, yet a region in economic transformation and full of practical challenges for outsiders determined to build something new.
But how does a company from China, or truly from any non-European market, go from admiring the view to setting up a real, functioning team in Southern Europe’s heartlands? How do you bridge cultures, hire correctly, remain compliant with the region’s strict regulations, and keep costs under control? These are not simple questions. In my experience helping many companies expand, the path is seldom linear. But there’s a way forward—if you’re ready to work with the right knowledge and some flexibility.
Building a team abroad isn’t a template job; it’s a journey full of side roads.
In this article, I want to give a grounded look at how a Chinese (中国) company can realistically staff up in Southern Europe. I’ll focus on Italy, Spain, and Portugal—a trio offering a rich talent pool, good value, and regulatory safety, if you know what to watch out for.
When companies in China talk to me about expanding, their first instinct is often to consider major Western European countries. Yet more of them are eyeing Southern Europe for very practical reasons—lower salaries, strong education, and improving infrastructure.
According to EURES labour market information, Spain’s GDP per capita (€28,300) is about 20% below the EU average as of early 2024, with Italy and Portugal not far behind. This doesn’t signal economic weakness, but rather, an environment where talent is both cost-effective and motivated.
The European Central Bank highlighted that by July 2024, the euro area’s labour force had grown by 8.6 million since 2020, showing a renewed vibrance and a significant pool of available workers. Even as shortages still appear in technology and engineering, the wider availability of keen, skilled professionals is undeniable.
Southern Europe offers a unique mix: competitive employment costs, a steady supply of local graduates, and improving business ecosystems that welcome international expansion.
Across these sectors, the value proposition is clear: lower total compensation costs versus Western Europe, but a robust talent pool in line with international expectations.
Mapping the legal foundation: What I wish I knew earlierSetting up business in Italy, Spain, or Portugal means getting friendly with an entire new legal landscape. It’s tempting to assume European compliance is all the same, but details matter—a lot. Each country, for example, has its procedures, tax rules, and required documentation for company formation and local hiring.
Don’t get tripped up by shortcuts; local compliance is rarely forgiving.
In my first years advising companies in this space, I sometimes underestimated the time these steps could take—and the paperwork! So, when building your team, you’ll need to match your ambitions with an understanding of local labor laws, collective agreements, and social security requirements.
If you want to avoid the overhead and risk of opening your own entity, working with established EORs like Enterprise Workforce Solutions (EWS) is a way to hire quickly without stumbles. For example, I regularly point partners to the specialized support on pages like Italy Employer of Record, Spain Employer of Record, and Portugal Employer of Record for market-specific facts.
If you rely only on home-country advisors or try to apply Chinese labor law logic to Southern Europe, you’ll likely miss subtle compliance rules that can unravel your team-building plan.
So, how should a Chinese company structure local hiring for cost-efficiency? For me, it’s about careful planning and local intelligence. While it’s true that wages in Southern Europe can be lower than in the UK, Germany, or France, “cheap” labor should never be the sole driver.
Of course, risks and local taxes add to the equation. If you’re providing benefits like meal vouchers, transport allowances, or private healthcare, those costs climb. But the overall picture remains favorable, with Southern European hiring costs sitting, on average, 30–40% below those in leading Western European markets.
When I helped a Shenzhen startup expand to Spain last year, their tech salary outlay dropped by nearly 36% compared to their Paris estimates. The lesson: location decisions are worth running against reliable salary benchmarks and cultural fit, not “cheapest possible” tables you find online.
Local talents usually look for jobs through popular career portals, social networks, and university partnerships, but the most trusted route is to work with local recruiters or to team with an EOR provider that already knows the labor landscape. Some companies also build bridges by organizing info sessions at local universities or joining business associations that give access to soft-introductions.
Recruitment process in southern Europe: Steps and subtletiesRecruitment in Southern Europe is more formal than what some Chinese founders expect. Every step is documented, and interview etiquette includes direct questions about experience, references, and even personality fit—sometimes more than pure skills.
If you use an EOR partner, the bulk of steps 5–7 are taken care of for you, which in my experience removes a lot of pressure, particularly for first-time entrants into the EU.
Getting recruitment “right” isn’t about speed; it’s about careful documentation and showing respect for process.
Payroll in Europe rarely matches payroll mechanics in China. In Spain, Italy, and Portugal, regulations dig deep into how salaries are delivered, what is withheld, and how employees are classified.
For example:
This is where working with a payroll outsourcing provider enters the picture. EWS, for instance, manages not only wage payments but also compliance, social charges, and monthly reporting across more than 100 countries—allowing you to focus on the core business, not administrative chase.
Payroll mistakes can lead to audits; precision matters more in Europe.
When companies come to me frustrated with their first hires experiencing payroll or benefits delays, the common reason is a lack of familiarity with local calendars, banking practices, and tax deadlines. This is especially so during holidays, as national holidays differ from those in China or even other parts of Europe.
From what I’ve observed, skilled candidates in Southern Europe look beyond the paycheck. Popular benefits include:
Those are not just “nice-to-haves” but often expected, especially in technology or engineering roles. For companies trying to compete with global brands for talent, matching these norms can be a difference-maker.
I’ve seen firsthand how easy it is to underestimate the impact of culture on new teams. Communication, trust, and expectations about work rhythm genuinely differ. While people in Nanjing might value direct decision-making, in Naples or Lisbon, a meeting can stretch on for longer, with frequent side conversations and lots of consensus-building.
If I could give only one piece of advice, it would be this:
Slow down and listen—cultural misunderstandings can undo weeks of planning.
Regular check-ins, town-hall calls, and even informal chats over coffee can help bridge the cultural distance. Simple things, like learning a few words of Spanish or Italian, go a surprisingly long way toward building trust.
In my experience, when Chinese and European teams work together for the first time, initial awkwardness fades if each side feels respected and heard. Elder team members may prefer in-person meetings, while juniors will quickly ask for chat channels and app-based HR tools.
Compliance is not a box to check—it is a day-to-day discipline. Keeping up with local legal changes, renewing contracts, providing documentation, and meeting reporting requirements forms a baseline. But trusted employers also care about their reputation, fair treatment, and transparency.
Being a trusted employer in Southern Europe means honoring both the law and the unwritten rules of workplace culture.
Steps to reinforce your positionEWS Limited routinely assists clients in aligning both legal and HR best practices, reducing the pitfalls foreign companies often face. I’ve found that establishing these policies early actually reduces headaches when teams grow from a handful to dozens or more.
If you are planning to expand into other parts of Europe, such as France or Greece, you can also take a look at guides on compliant hiring for countries like France and Greece, which share certain hiring frameworks with their Southern European neighbors.
As someone who talks to C‑level and HR directors daily, I often hear this question: should we set up a new limited company in Italy, Spain, or Portugal, or hire through an EOR? The answer depends on your appetite for local management and long-term plans.
Costs for entity setup can run to €5,000–€10,000 in legal and accounting fees, plus several months to vest full operating status. Contrast this with EOR contracts, which start almost immediately, often within a week.
My personal advice? Move gradually. Use an EOR or payroll partner to develop your first group, and only when local revenue justifies it, shift to a full-entity structure. This dual-track approach balances compliance, speed, and your risk appetite.
If you are a Chinese business preparing to expand westward, Southern Europe offers a genuine chance to build an effective, loyal, and affordable team. The region’s large, educated labor force, reasonable hiring costs, and improving business infrastructure lower entry barriers even as you must contend with compliance and cultural complexity.
Let me leave you with this:
It’s not just what you build, but how you build it that shapes your success in new markets.
I’ve seen companies falter by ignoring local rules, but I’ve also watched them thrive by seeking the right advice and building bridges, not just offices. For Chinese companies, the move from Nanjing to Naples (and beyond) is less about distance and more about mindset.
If you want to learn more about how Enterprise Workforce Solutions (EWS) supports compliant, local hiring in over 100 countries, including detailed on-the-ground guidance for Italy, Spain, Portugal, and more, reach out to us to discuss your project. Let’s make your Southern European team not just an idea, but a proud, working reality.
The best way to hire locally in Southern Europe is to partner with a specialist familiar with national hiring laws and use either local recruiters or an Employer of Record (EOR) to ensure contracts, payroll, and compliance are handled correctly. Going directly can expose you to legal and tax risks if you are unfamiliar with collective bargaining agreements, social charges, and local customs.
Most companies begin by advertising positions on leading national job boards and LinkedIn, but I’ve found the most effective results by working with boutique recruiting agencies or larger EOR providers who know which universities, networks, and digital platforms attract the candidate type you want. Attending business association events or partnering with local training centers also opens valuable talent channels.
Common challenges include handling language barriers, interpreting complex labor laws, managing long notice periods and severance, adjusting to strong employee rights, and dealing with slow administrative processes. Probation periods are shorter than in many Asian countries, and strict social security contributions and collective agreements shape the hiring deal. You also need to pay attention to GDPR privacy requirements in recruitment and onboarding.
From what I’ve seen, yes—if you match your expectations and business model to local reality. Building local teams brings cultural connection, faster response to customers, and often costs less than relocating staff from home markets. But it does require adapting management style, investing in cross-cultural learning, and offering benefits that meet market norms.
Hiring costs vary by country and job function, but expect entry-level professional salaries in Spain and Portugal from €18,000–€30,000, and in Italy from €22,000–€38,000, plus 25–35% in employer social charges. Total cost is about 30–40% less than London or Paris equivalents for similar jobs. If you use an EOR or payroll provider, budget for service fees on top, but you’ll save time and avoid potential penalties from compliance glitches.
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