Every time I discuss global expansion with ambitious companies, the same question keeps coming up: “What is the real risk if we just get started and figure out compliance later?” It’s a tempting shortcut—one I’ve seen many organizations, especially Chinese firms undertaking the 走出去战略 (“Go Global” strategy), decide to take. Initially, it can feel as if growth outpaces the regulations. But that’s almost never true for long.
Not knowing a law rarely protects you from its consequences.
In my work with EWS Limited and as an observer of outbound strategies, I’ve noticed that the speed of international expansion is often at odds with the pace at which leadership truly grasps the compliance landscape they’re entering. Labor law, tax, immigration, and payroll tripwires can appear in unexpected places—especially in the GCC (Gulf Cooperation Council) and EU regions.
The excitement of new markets can, at times, mask blind spots that threaten the entire strategy. Today, I want to share what I’ve learned about why compliance must be woven into every step of the ‘Go Global’ journey and where Chinese outbound projects are most at risk.
The globalization of business, propelled by rapid advances in technology and logistics, has changed the stakes. Once, only multinationals dared to build cross-continental teams. Now, Series B and C companies, emerging technology startups, and established IT leaders all find growing overseas tempting—and, for many, almost necessary.
In the wake of reports such as the OECD report (2025) on increased global supply chain dependencies, and the OECD Economic Survey of China (2022) calling for more open markets and fewer entry hurdles, global ambition is only going to keep rising.
But every move abroad demands more than just an agile sales team or a network of local agents. It demands full compliance with frameworks that are as diverse as the countries themselves. In the EU and GCC, this complexity can turn an expansion plan upside down overnight.
I’ve watched talented teams miss obvious, sometimes glaring, compliance risks. Most of the time, the risk wasn’t about deliberate avoidance. It was about assumptions—assuming what works in China also works in Germany, or that UAE labor law is similar to that of neighboring Saudi Arabia.
Here’s what I’ve seen as the most frequent blind spots for Chinese outbound projects:
Missing just one of these can cause serious disruption—or worse, regulatory penalties and reputational damage.
The GCC and EU: More than just “geographies”Too often, leaders think about the GCC and EU as mere market labels. But in my experience, each is a complex legal organism, shaped by dozens of national, pan-national, and local regulations.
The GCC bloc (United Arab Emirates, Saudi Arabia, Qatar, Oman, Bahrain, Kuwait) is not uniform. Policies on worker welfare, end-of-service benefits, and sponsorship (kafala system) shift from country to country and sometimes within emirates or regions.
A single compliance slip-up may bar a company from hiring locally for months.
The EU promises frictionless commerce for goods and services, but employment and labor laws remain a national matter. The OECD Economic Survey—European Union and Euro Area (2025) highlights the growing importance of migration for labor market growth. Countries like Germany, Sweden, and France each have unique employment codes, termination safeguards, leave rules, and social insurance systems.
As for remote work, the belief that they “fly under the radar” is a myth. Host-country authorities increasingly enforce employment law (and payroll tax) on anyone physically present locally, even if their employer is foreign-based.
“Global” means absorbing every shade of local rule.
Years of consulting have taught me that sales and supply are only the first layer. What really trips up expansion plans is what lies beneath—the people, contracts, and compliance frameworks that let new offices, teams, and partnerships flourish or, when overlooked, fail.
Compliance isn’t just about avoiding fines. It’s about stability, reputation, and the genuine ability to operate without constant legal uncertainty.
Blind spots I’ve seen up closeIn my experience, the compliance pitfalls of Chinese companies pursuing ‘走出去’战略 are more than just theoretical. I’ll share a few that remain etched in my memory:
One startup I worked with assumed that a simple English-language template employment contract would satisfy French labor officials. They only found out their mistake when a new hire filed a grievance over missing mandatory clauses and insufficient notice periods—delaying their market entry by three months and costing them more than any legal audit would have.
Another company, eager to move fast in Germany and the Netherlands, labeled local engineers as contractors to “save on overhead.” Within months, an audit flagged the arrangement. The resulting back-pay and tax penalties erased the savings many times over. For those curious, a recent guide on avoiding international contractor compliance pitfalls covers this in depth.
It’s still common to see firms think remote work leaves them off the regulatory radar. But in countries like Italy, employees working from home—and even freelancers in many cases—still trigger social insurance, payroll tax, and health safety requirements. Regulators have become far more assertive post-pandemic, as highlighted in industry studies.
Compliance rarely matters until it suddenly matters more than anything else.
According to the European Commission’s report on FDI (2024), the EU has seen a decline in inbound investment from China for the third year in a row. One driver? Administrative and compliance complexity. Location choices are often shaped just as much by regulatory comfort as by sales potential.
Setting up a company abroad now requires more than picking a favorite city. It can include—depending on the country:
Many companies know to hire a lawyer—few know to continually review compliance as part of expansion. A strong approach is to use guidance like the compliance checklist for international hiring to keep risks front and center from day one.
Payroll, EOR, and outsourcing: Hidden compliance trapsWhen expansion means hiring abroad before establishing a legal entity, many firms consider payroll outsourcing or Employer of Record (EOR) arrangements. I always urge caution.
If you’re thinking about scaling with these tools, check out guidance from the post on the employer of record’s role in global expansion.
Employer of Record in Mandarin: What is 境外雇主服务？
How to Use an EOR for Temporary Projects (中国公司如何为短期海外项目使用EOR服务)
Why “Go Global” Must Include Compliance (“走出去”战略中的合规盲点)
中资企业如何选择欧洲EOR供应商？(How to Choose the Right EOR Partner in Europe)
与当地政府打交道：中国公司需要了解的合规礼仪 (Cultural Compliance for Chinese Firms)
中国公司海外人力结构案例分析：制造业、科技与能源 (HR Case Studies: Chinese Firms Abroad)
How Guanxi Influences Hiring in the Middle East (关系在中东招聘中的作用)
Top 5 Risks When Hiring in the Gulf (中国企业在海湾地区招聘的五大风险)
Managing Compliance in Multi-country Projects (中国企业多国项目的人力合规管理)
The $100K Visa Shock: Why Global Hiring Just Replaced the H-1B
How to Set Up Payroll For Hpc And Ai Teams
Contracting Machine Learning Talent Abroad
Everything on Hiring Foreign Phds In German Tech Labs
Cross-Border Ip Protection In R&D Teams
How To Classify Freelancers In Tech Innovation
How Eor Helps Tech Firms Legally Hire In Germany
Dual Contract Structure For International Researchers
Data Protection Obligations For Remote Tech Staff
Germany Research Visa Vs Skilled Worker Visa
Everything on Nis2 Directive Compliance For Eu Tech Workers
Global Mobility For Deep Tech Startups In Germany
Payroll For EU Embedded Systems Developers
Relocation Support For Semiconductor Experts on EU
The Absolute Way to Hire Ai Engineers In Germany
How to Manage Benefits For German Tech Hires
Germany’S Blue Card Process For Engineers
Everything on Germany R&D Employment Compliance
Remote Hiring Of Cybersecurity Analysts In Eu
Visa Pathways For Quantum Computing Researchers
Onboarding Robotics Specialists Across EU Borders
Workforce Planning In Ai-Driven Logistics And Infrastructure
Visa Processing For High-Tech Infrastructure Staff
Managing Global Mobility In Sustainable City Projects
Cross-Border Team Management In Saudi Data Centers
Hiring Skilled Labor For Green Hydrogen Facilities
Digital Twin Technology Hiring Trends In Saudi Construction
Employer Obligations In Public-Private Energy Initiatives
Navigating Local Labor Laws For Solar Energy Teams
Talent Acquisition In The Saudi Mining Sector
Eor Solutions For Ai Engineers In Mega Projects
Regulatory Challenges In Hiring For Giga Construction Projects
Contractor Compliance In Smart City Developments
Classification Of Engineering Consultants In Vision 2030 Projects
How To Manage Workforce For Neom-Based Tech Projects
Eor For Multinational Mining Firms Operating In Saudi Arabia
Employer Of Record For Wind Energy Projects In The Gulf
Relocation Logistics For International Clean Energy Experts
Hiring Strategies For Large-Scale Construction Projects In Ksa
How To Onboard Digital Infrastructure Experts In Saudi Arabia
Payroll Setup For Renewable Energy Workers In Ksa
Strategic Relocation To Riyadh Or Doha: A Guide for Global Employers
Work Visa Processing In Qatar And Saudi Arabia
Qatar Nationalization Policy And Foreign Firms
Cost Of Setting Up A Business In Qatar: A Guide for Global Employers
Saudi Labor Court And Dispute Handling for Global Employers
Cross-Border Payroll For Ksa And Qatar Teams
End Of Service Benefits Saudi Arabia: A Guide for Global Employers
How To Manage Expat Benefits In Qatar for Global Employers
Expanding Into New Markets: Vendor Risks You Should Flag
A Guide to Cross-Border Equity Vesting for Tech Startups
Employer Branding for Multinational Teams: What Works Now
What Global C-Level Leaders Miss About Digital Nomad Visas
Succession Planning for Distributed Teams: A Practical Guide
Relocation Budgeting For Global Tech Firms
Latam Hiring Strategy: What Global Companies Should Know
Risk Of Permanent Establishment Explained
Managing Intellectual Property In Remote Work
Benefits Benchmarking Globally for Global Companies
How to Benchmark Compensation Across 100+ Countries in 2025
Checklist: Preparing HRIS for Fast International Scalability
Biometric Data in Global Payroll: Legal Boundaries Explained
8 Regulatory Updates Impacting Global HR in 2025
What are Hidden Costs of In-House Payroll?
Why Companies are Thinking Differently About Relocation
Is Your Global Mobility Program Outgrowing Spreadsheets?
Remote Work Visas: A Growing Trend in Global Mobility
Hiring in Europe Post-Brexit: What You Need to Know
Tips for Managing Multi-Time Zone Teams Successfully
Relocation Packages: What Top Talent Expects in 2025
Banking and Payroll Challenges in Saudi Arabia Markets
The Legal Risks of Misclassifying Global Workers
Why Scalability Should Drive Your Global HR Strategy
How EWS Streamlines Global Mobility for Tech Talent
Lithuania – Employer of Record
Kosovo – Employer of Record
Finland – Employer of Record
Namibia – Employer of Record
Nepal – Employer of Record
Spain – Employer of Record
Latvia – Employer of Record
Ireland – Employer of Record
Cyprus – Employer of Record
Czech Republic – Employer of Record
Italy – Employer of Record
Indonesia – Employer of Record
South Africa – Employer of Record
Tunisia – Employer of Record
Bosnia – Employer of Record
Moldova – Employer of Record
Five Tips For Improving Employee Engagement
Netherlands – Employer of Record
Germany – Employer of Record
France – Employer of Record
Portugal – Employer of Record
Bulgaria – Employer of Record
Austria – Employer of Record
Hungary – Employer of Record
Slovenia – Employer of Record
INCLUSIVITY IN THE TEAM MAKES EVERYONE WIN
Thailand – Employer of Record
Sri Lanka – Employer of Record
The Significance of an Employer of Record
Greece – Employer of Record
Mexico – Employer of Record
4 Reasons to Outsource Your Payroll
Five Recruitment Trends 2023
Malaysia – Employer of Record
Skill-Based Hiring and Benefits
Malta – Employer of Record
How To Practice Inclusive Recruitment
Israel – Employer of Record
Macedonia – Employer of Record
Jordan – Employer of Record
Macau – Employer of Record
Peru – Employer of Record
The Importance of Employer Branding
Bahrain – Employer of Record
South Korea – Employer of Record
Recruiting during a recession
Philippines – Employer of Record
USA – Employer of Record
Japan – Employer of Record
How To Setup A Business in 2023
Norway – Employer of Record
Managing Overseas Projects In 2023
Reason Of Expanding Your Workforce Globally
Croatia – Employer of Record
Colombia – Employer of Record
5 Ways To Speed Up Your Hiring Process
Egypt – Employer of Record
3 Ways To Streamline An Interview Process
Russia – Employer of Record
Saudi Arabia – Employer of Record
Hong Kong – Employer of Record
An Effective Hybrid Work Model
Turkey – Employer of Record
UAE – Employer of Record
Pakistan – Employer of Record
7 Things to Consider Before Accepting a Job
Kazakhstan – Employer of Record
3 Reasons to Encourage Employees to Generate Employer Brand Content
Denmark – Employer of Record
Sweden – Employer of Record
Bangladesh – Employer of Record
Kuwait – Employer of Record
How To Hire In The Age Of Hybrid Working
Australia – Employer of Record
Oman – Employer of Record
Qatar – Employer of Record
Ukraine – Employer of Record
Diversity – A Vital Hiring Strategy
Owning Every Moment of Your Hiring Experience
Serbia – Employer of Record
Maldives – Employer of Record
India – Employer of Record
Argentina – Employer of Record
Uzbekistan – Employer of Record
Belarus – Employer of Record
Brazil – Employer of Record
Chile – Employer of Record
Armenia – Employer of Record
3 Steps To Company Formation In The UK & Abroad
Romania – Employer of Record
Canada – Employer of Record
Morocco – Employer of Record