Personnel Administration Is a Filed Activity, and the Records Are Evidence
Human resources services are regulated by State Council regulations, and employee records serve a second purpose in Hainan: they are part of what proves the entity's people are actually here.
HainanInc Employment Advisory
· 4 min read
Personnel administration is the part of an entity's operations most likely to be treated as filing cabinet work — necessary, unglamorous, and delegable to whoever has capacity. Two things make that framing risky in a Hainan entity. Providing human resources services to another employer is a regulated activity rather than a general commercial one. And the records themselves do double duty, because the personnel element of the Free Trade Port's substantive operation test is proved with exactly this material.
The regulated activity
Human resources services in China are governed by the Interim Regulations on the Human Resources Market (人力资源市场暂行条例), State Council Order No. 700, adopted on 29 June 2018 and in force since 1 October 2018. Administering another employer's personnel records and employment documentation falls within the filed activities that framework governs, which is why a provider offering to run personnel administration should be able to evidence its filing rather than assert its experience.
The regulations governing this work
- Interim Regulations on the Human Resources Market (人力资源市场暂行条例) — State Council Order No. 700, adopted 29 June 2018, in force 1 October 2018 — the framework governing human resources services, including the filing requirement for providers.
- Notice on Enterprise Income Tax Preferential Policies for the Hainan Free Trade Port (财税〔2020〕31号), continued by 财税〔2025〕3号 to 31 December 2027, with substantive operation continued by the joint Hainan announcement 2025年第3号 of 14 August 2025.
- Published substantive operation guidance — the personnel element requires employees sufficient for the business to actually work in the Free Trade Port, wages and salaries paid through a bank account opened there, and, depending on enterprise scale and workforce, between three and thirty employees each resident in the Free Trade Port for a cumulative 183 days within a tax year.
- Notice of five Hainan departments on employee social insurance contributions — Hainan's employer contribution rate for urban employees' basic medical insurance was set at 6% from 1 July 2024 to 31 December 2026.
- All positions above verified against the issuing bodies' published texts in September 2026, save the Interim Regulations, which are named for identity.
The records are the substance evidence
This is the part that distinguishes Hainan from anywhere else. The personnel element of substantive operation requires that employees sufficient for the business actually work in the Free Trade Port, that their wages are paid through a Free Trade Port account, and — depending on the enterprise's scale and workforce — that between three and thirty employees each reside in the Free Trade Port for a cumulative 183 days in the tax year.
That is a claim about named individuals and their physical presence, and it has to be evidenced from records that existed during the year. Contracts, payroll records, social insurance registrations and whatever the entity keeps on where its people actually were: these stop being administration and become the proof behind a tax position. An entity that maintains them loosely has not merely been untidy; it has left a claim unsupported.
Personnel files look like housekeeping until the year they are the only evidence that anyone was actually here.
Headcount on payroll is not headcount in the substance file
The reconciliation that catches problems is between three numbers that ought to agree and frequently do not: how many people are on payroll, how many are registered for social insurance, and how many can be shown to have been resident in the Free Trade Port for the required period. A generous payroll headcount with a thin residence record satisfies the first and fails the third, and nothing in an ordinary personnel process surfaces the gap, because no single system holds all three numbers.
What personnel administration should actually cover
- Employment contracts in place, current, and consistent with the roles people actually perform.
- Social insurance and housing fund registrations opened and maintained per employee.
- Records supporting where employees actually worked, kept during the year rather than reconstructed.
- Payroll run through a Free Trade Port account, consistent with the personnel element.
- A periodic reconciliation between payroll headcount, social insurance headcount and the residence evidence.
- Onboarding and departure checklists, so records are complete at both ends rather than only at the start.
Who holds the filing, and what we reconcile
Administering another employer's personnel records and employment documentation is a filed activity in mainland China and HainanInc does not hold that filing; a registered provider carries it. We run the administration, the checklists and the relationship — and, specifically, the reconciliation between what payroll says, what social insurance says and what the substance file will need to show, which is the part no individual provider is looking at.
This is general commentary on published policy, not employment advice for a specific entity. Requirements change and are administered locally; confirm the current position before relying on any of the above. Positions were verified against published sources in September 2026, except where noted.