PRC Law on Expatriates in China

October 22, 202012:50 pm3584 views
PRC Law on Expatriates in China
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Under People’s Republic of China law, expatriates working in China must be in possession of a work permit and a residence permit (for employment purposes), otherwise their employment might be considered illegal. In cases of illegal employment, the employer and the foreign employee might be penalized by the authorities, and their relationship will not be protected by labour law. 

According to Lehman law review, to obtain a work permit and residence permit for a foreign employee, an employer must apply to the government for the notification of a work permit for the foreigner. With the notification of the work permit, the foreigner might apply for a work visa. After obtaining the work visa, foreigners should apply for a work permit within 30 days of entering or reentering China. With the work permit, foreign employees should apply for a residence permit within 30 days after entering or reentering China. If foreigner first entered China on another type of visa, such as a visit visa or tourist visa, he or she might go to Hong Kong to obtain a work visa after obtaining the notification of the work permit). 

See also: What Does China Law Say about Anti-Discrimination in Workplaces? 

Work permits usually have a term of one year and never exceed five years even if certain conditions are satisfied. Residence permits usually have the same term as work permits. If the employer intends to continue to employ the foreigner after the expiration of the work permit and the residence permit, the employer must apply for a renewal of the permits 30 days before their expiration. The employment relationship is automatically terminated if the work permit becomes invalid or is cancelled.

In addition, foreigners who come to China to perform special tasks in the areas of technology, scientific research, management or guidance with Chinese business partners or other reasons and stay in China less than 90 days (“Short-term Work”) must apply to the relevant authorities for their employment licenses, approval letters, certificates of employment, invitation letters or confirmations of invitation and work visas. If they intend to perform Short-term Work in China in excess of 30 days, they must apply for residence permits (for employment purposes). However, foreign employees who are dispatched to the branches, subsidiaries and representative offices in China by foreign companies and stay in China for fewer than 90 days are not considered to be “performing Short-term Work” and must apply for trade visas (M visas).

COVID-19 and consequences on expatriate working in China  

Currently a lot of expatriates are blocked outside China by the travel restriction since the first quarter of 2020. As consequences, expatriates have to stay in their home country for a period of time which could make tax consequences complicated and even undesirable. For instance, when a foreign expatriate stays in their home country for more than 183 days in 2020, they might be in general not regarded as Chinese tax residents for 2020. 

Nevertheless, things could look better if expatriates are considered as domiciled in China. For instance, in cases where they hold a Chinese green card, they settle down with family in China and all the economic interests are closely related to China. 

Read also: Employee Benefits Available for Employees in China

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