How to Hire a Foreign Employee in China?

how-to-hire-foreign-employees-in-ChinaJust like any other country, one needs to acquire a legal work permit in order to find a job in China. However, getting a work visa in China is no simple task. To make the matters worse, the visa requirements alter multiple times within a year, hence making the process even more complex. China’s regulatory authorities also amend the legal information for both the employers and applicants on a continuous basis; subsequently forcing the interested parties to stay updated with the process changes on proactive grounds. Hence, for all the organizations wanting to hire a foreign employee in China, this article will serve as a 360 view in understanding the process.

Here’s what you will find in this article about hiring a foreign employee in China:

  • Pre-considerations and tips for bringing a foreign employee onboard.
  • Legal conditions and regulatory requirements for hiring overseas employees.
  • How labor laws make an impact on hiring decisions in China.

Essential tips for the employers for hiring overseas employees in China

As an employer, there are certain tips that you should stick to, in order to hire a foreign employee in China.

  • Thoroughly understand China’s labor laws along with the different rules defined by the PRC government.
  • Spend some good time to understand what your local labor unions are expecting from your process of hiring overseas employees.
  • Perform a gap analysis to identify the conflicts that may exist in your local labor rules concerning your business’s location to the ones defined by PRC.
  • Complete all the paperwork and formal requirements that are related to hiring a foreign employee, including licenses, documentation and visa formalities.
  • Please remember that you, as an employer, may require to complete the regular procedures of renewing the licenses and other documentations at a set frequency to keep your hired employee on board, even after hiring.
  • Educate yourself and your HR department about the ever changing nature of the China’s labor laws. Adopt a proactive approach to stay updated to all the amendments in labor laws, so as to avoid any unnecessary trouble.

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I Want to Hire a Foreign Employee

Prerequisites for the foreign candidates for working in China

There are certain prerequisite requirements that a foreign applicant must meet in order to be eligible for working in China. Although some of the conditions may vary from city to city; the base requirements are same all across the China.

To be eligible for working in China, a candidate:

  • Must be over 18 years of age and bears good health.
  • Possess no criminal record or background.
  • Holds a valid passport or any other travel documents that could be presented instead of the passport.
  • Must have the relevant qualifications, experience, and skills that are required to do the job.
  • Preferably has an employment offer from a registered employer.

Conditions for hiring a foreign employee in China

Meeting the above requirements makes a candidate eligible for job application. However, there are some other conditions that need to be taken care of, both by the employer and the prospective candidate, to successfully complete the hiring process.

These conditions are broadly classified into four categories and are equally applicable to both China’s local companies as well as the foreign entities that are interested in hiring overseas employees in China, while the procedure for hiring local employees is different.

1- Applications for foreign work permit and foreign expert certificate

Though they may sound the same, these are two entirely different documents and are both required to bring an employee onboard successfully. Hence, an employer needs to submit applications to different offices to request these documents.

As a general rule of thumb, foreign expert certificates are issued by foreign experts affairs bureau while labor bureau grants work permits. These are two separate governing bodies, and hence the documentation requirements differ for both.

For example, while submitting the candidate’s work experience for visa application, the Foreign Experts Affair Bureau may accept the official stamp of the applicant’s previous employer on the experience certificate. Same, however, is not acceptable for the Labor Bureau which calls for additional checks for eligibility verification.

2- Internship visas are not allowed

It is not allowed to hire an foreign employee in China as an interns from overseas, because China’s governmental system does not recognize the official status of interns. However, if a foreigner is already studying at any university based in China under an X-1 long-term student visa, he or she becomes eligible for a local internship opportunity. The students, however, must seek permission from the university before submitting their application to Public Security Bureau Entry-Exit Administration for getting a notation on their residence certificates.

A deviation to the internship rule, however, makes it possible to hire someone who lands in China, specifically for finding an internship opportunity by legalizing it through an M-Visa (Business or Trade Purpose), which allows a maximum employment duration of 90 days. This should be entirely done under the provisions of law, to avoid any penalty by governing authorities.

It must be noted that China’s governing authorities are quiet efficient and there have been some cases in the recent past where some employers who hired foreign interns without complete legal procedure came under surveillance. Therefore, it is illegal to hire foreign interns who are residing in China on X-visa without having them process their applications through PSB and their universities. Furthermore, hiring a foreigner on L-Visa (Tourist Visa) is strictly prohibited and it may lead to some serious consequences, for both the parties, if caught.

3- Knowledge of legal formalities for hiring a foreign employee in China

It is extremely crucial to have a knowledgeable team in your HR department, to hire a foreign employee in China. Your HR staff should be completely aware of the China’s labor laws and regulations and hence, this must be a dominant part of their training right from the start, if hiring overseas employees is a part of your organizational policy.

There is no fixed turnaround time for the process of visa application of a foreign candidate and the process may take anywhere between 4 weeks to a few months. However, the chances improve if the visa application is properly prepared and lodged with all the necessary documentation and for this, the knowledge of HR staff does come handy.

It’s no wonder that the process of hiring employees in foreign countries comes with legal formalities and procedures but in the long run it’s worth the effort and is encouraged to encourage diversity, cross-cultural communication and inclusion. Like any other country, China’s government encourages hiring overseas employees to build a substantial task force that could contribute along with the local workers towards the development of country.

4- Applicant’s process for work permit application

The foreign applicants who seek to work in China must apply for a work permit (also known as Z-Visa). It is necessary to specify the time limit and the expected work location in their visa applications. The maximum allowed time for an expat to work in China, using Z-Visa, is 5 years and it becomes illegal to work beyond this time period or in a location other than what was specified in the initial application, unless proper procedures are followed to legalize the variation.

It must be noted that Z-visa is valid for 30 days only, after the date of arrival. Hence, the employer and employee must apply for a Temporary Residence Permit within this 30 days time frame. The temporary residence permit will state the duration of working contract and it may fall somewhere between 90 days to a maximum 5 years

Lock-step process to hire a foreign employee in China

Lock-step process is a documentation exercise for successfully getting an alien work and residence permits in China. A substantial efforts should go into this process in order to avoid any delays.

  • First of all, the employer requests employment license from the local labor authorities.
  • In the next step, the employer submits an application for work visa confirmation letter from foreign office China.
  • Once the confirmation letter is issued, the prospective candidate applies for a work visa in his/her home country using the issued letter.
  • After landing in China, the applicant submits a request to PRC and local labor authority to obtain an alien employment permit.
  • Finally, the applicant applies for an alien residence permit from public security department.

Both the residence and work permits need to be renewed after a specified time period.

How local labor laws impact hiring decisions

Generally, the local labor laws varies from one locality to another and hence, there is no fixed answer to this question. The best strategy, however, is to arrange a meeting with a consulting firm that has its roots in China and discuss the nitty-gritty of the labor laws in your destined location. It is an important preparatory step that paves your path to meeting with local authorities and work your way without any problem.

Below charts points out some fact-based differences in different localities. These tables also highlight the differences that you may experience while hiring a China’s local candidates VS hiring overseas employees.

shanghai tax rate for hire a foreign employee in china

Beijing tax rate to hire a foreign employee in china

Guangzhou tax rate to hire a foreign employee in china

*Note that housing fund, pension insurance and medical insurance contributions are not required for foreign employees. As for employers, contribution exemptions is only applied for the housing fund insurance.

Latest amendment in China’s labor laws:

The latest amendment in the China’s work visa policy for foreign workers has came into effect on 1st April, 2017. This latest regulation focuses on simplifying the process and paperwork, and is applicable to all the foreigners employed in the Mainland, China. Furthermore, this regulation aims to increase the quality control imposed on foreigners already working or planning to work in China by changing the nature of work permits and application procedures.

In lieu of the new regulations, the work permit will include a foreigner ID in replacement of the former Chinese ID card. This Foreigner ID will be usable for purchasing and signing up for the things that were once allowed only to the Chinese ID card. In addition, the annual renewal requirement work visa has also changed. Once you have applied for the annual permit two times, you are entitled to request a five year permit on your next application. The need for the re-issuance of Expat ID card with the work visa has also came to an end.

How FDI China can assist in hiring a foreign employee in China?

FDI is a prominent consulting firm in China that has been operating for over a decade and has successfully assisted more than 200 companies in the Mainland. We offer employment of record solutions related to the staff management and help our foreign clients develop and expand their businesses in China.

The information contained in this article is valid on June 26th, 2018. For updated information, please contact us via email at contact@fdichina.com.

I Want to Hire a Foreign Employee