(By Lisa Li) As of April 2017, the Circular on Fully Implementing the Work Permit System for Foreigners to Work in China jointly issued by the State Administration of Foreign Expert Affairs, the Ministry of Human Resources and Social Security, the Ministry of Foreign Affairs and the Ministry of Public Security (the “Circular”) has been implemented in China to integrate previous foreigner’s employment permit and foreign expert work permit as the foreigner’s work permit, aiming to simplify the foreigner’s work permit application procedures and to facilitate the introduction of foreign talents. In accordance with the relevant laws, regulations and policies regarding the foreigner’s work permit and from our recent experience, we summarized the following main points and some best practices regarding the foreigner’s work permit in order to provide a brief overview on the foreigner’s work permit system in China.
1.Preconditions for foreigners to legally work in China
According to the Rules for the Administration of Employment of Foreigners in China, foreigners’ employment with Chinese employers is conditional on obtaining of the valid foreigners’ work permit.
Moreover, according to the Exit & Entry Administration Law of PRC, foreign employees shall obtain the work-type residence permit issued by the exit & entry authorities allowing them to legally work and stay in China.
Chinese employers must apply for the foreigner’s work permit and work-type residence permit in a timely manner before they formally arrange for the foreign employees to work in China. Otherwise, the Chinese employers will be imposed on administrative penalties in an amount of RMB 10,000 per person but not more than RMB 100,000 in total and confiscation of illegal income (if any) if they hire foreigners without obtaining the foreigner’s work permit (and the work-type residence permit). Foreigners will be imposed on administrative penalties of RMB 5,000 to RMB 20,000 and if the circumstances are severe, they will be detained for a period of 5 to 15 days plus payment of penalties of RMB 5,000 to RMB 20,000, if they are considered constituting illegally working in China.
2.Basic requirements for foreigners to obtain the foreigner’s work permit
The foreigners shall satisfy the following requirements for the Chinese foreign experts affairs authorities (hereinafter referred to as “Foreign Experts Bureau” or “Authorities”) to issue the foreigner’s work permit:
- Reaching age of 18 or above, being healthy, having no criminal record, having a definite legal employer in China and having the necessary professional skills or knowledge;
- The foreigner falls within the scope of professionals urgently required in China and the work to be performed facilitates China’s economic and social development;
- Other specific requirements set out by the laws and regulations.
Accordingly, the foreigners shall provide relevant evidence in an form acceptable to the Foreign Experts Bureau in order to apply for the foreigner’s work permit. From Chinese employers’ perspective, they need to evaluate the possibility of obtaining the foreigner’s work permit for the respective foreigners before hiring them to work in China. In addition, Chinese employers should include proper clauses on validity of the contract with the foreigner in case of failure to obtain the foreigner’s work permit (or extension of the same at a later stage).
3.General steps for application of the foreigner’s work permit
The Chinese employers hiring foreign employees shall initiate the work
permit application process via the official website of the Foreign Experts Bureau (http://fwp.safea.gov.cn/). They shall submit the application materials online and after the pre-approval is granted, they shall then submit the original application materials on-site at the Authorities.
The general steps of applying for a new foreigner’s work permit will be as follows:
- The company opens an online company account with the Foreign Experts Bureau, which requires online submission of account-opening application materials and the subsequent on-site submission of original account-opening application materials;
- The company applies for the Notification Letter of Foreigner’s Work Permit, which is to be issued in an electronic form;
- The foreigner applies for Z visa at a Chinese embassy / consulate in his/her home country;
- The foreigner goes through health check at a medical institution recognized by Chinese inspection and quarantine authorities (we noted that Authorities from different locations of China indicate those medical institutions recognized by Chinese embassies or consulates at the foreigner’s home country would be acceptable. This is recommended to
be communicated with local competent Authorities where necessary); alternatively the health check can be done in China after the foreigner enters China;
- The company submits the original application materials on-site at the Authorities to apply for the foreigner’s work permit after the foreigner enters China.
Foreigners are classified into three categories, i.e., Class A (foreign high-end talents), Class B (foreign professionals) and Class C (other ordinary staff), and subject to review by the Authorities in this regard. For foreigners falling within Class A, the Authorities provide more favorable conditions to facilitate the application process. Before initiating the application process for specific foreign employees, the companies need to sufficiently review and evaluate which class foreign employees fall within so as to achieve time efficiency. In case that the Authorities consider a foreigner does not satisfy the conditions set for Class A, the company shall re-start the application process if the company submitted the application by selecting category of Class A for the foreigner at the very beginning.
4.Renewal of the foreigner’s work permit
The renewal of a foreigner’s work permit shall be initiated no later than 30 days prior to the expiry date. In Shanghai, it is possible to initiate the renewal process within 90 days but no later than 30 days prior to the expiry date. It is advised to initiate the renewal process at a relatively early stage in order to align it with the application of work-type residence permit process (e.g., the renewal of work-type residence permit shall be initiated in a timeframe of 7 working days to 3 months prior to the expiry date thereof).
5.Age limitation lifted for Class A employees
As of April 2017, foreigners falling within the category of Class A will not be subject to limitations of age, educational background, working experience, etc, while generally Class B foreigners will be limited to 60 years old. Therefore, Class A foreigners are possible to obtain the foreigner’s work permit after 60 years old. However, we have seen certain Authorities issue the foreigner’s work permit on an annual basis for Class A foreigners exceeding 60 years old, regardless of that the valid term of the employment contract is longer than one year.
According to the Classification Standards for Foreigners Working in China (appendix to the Circular above), there are various standards to identify if a foreigner falls within Class A or Class B (while Class C foreigners refer to those foreigners working on a short term of less than 90 days as well as foreigners working under specific programs subject to quota administration and published by the government, e.g., the currently implementing Sino-French Internship Program). An easy way to identify if a foreigner belongs to Class A category is to check his/her annual salary. A foreigner obtaining a high annual salary of 6 times the local average annual salary for the preceding year as published by the local government will be regarded as a Class A foreign employee (in Shanghai, the current standards are gross annual salary of RMB 600,000 plus annual payment of individual income tax in an amount of at least RMB 120,000, which is expected to be further adjusted).
6.Employers’ obligations in case of termination of foreign employees
In case of terminating employment relationship with the foreigners prior to expiration of his/her employment contract, Chinese employers shall apply for de-registration of the respective foreigner’s work permit within 10 working days as of the termination date. Proof of terminating the employment
contract requires signature by the foreigner and submission to the Authorities. Otherwise it is not possible to conduct the de-registration. In practice, depending on the communications with the Authorities, they might accept recording the application of de-registration by the employer, if it is not possible to obtain the foreigner’s signature.
Please note that Chinese employers shall also conduct the modification filings or re-apply a new foreigner’s work permit with the Authorities in case there is change in information of the foreigner, including name, passport number, title/position, etc.
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