Hiring Foreign Employees In China

Gone are the days when China allowed pretty much any foreigner to work in China, with our without the proper visa. Foreigners may be employed in China only if all of the following conditions are met:

1. The candidate is in good health and over the age of 18;
2. The candidate possesses the skills and work experience required for the job;
3. The candidate has no criminal record;
4. The candidate has a specified employer;
5. The candidate holds a valid passport or any other valid travel document in lieu of passport.

Where we often see foreign companies get into trouble is when they fail to meet applicable local requirements. Like pretty much everything related to employment law in China, the rules for hiring foreigners varies by locale. See China Employment Law: Local and Not So Simple. For example, some municipalities impose an upper limit on the candidate’s age. Beijing, for instance, requires the candidate be less than 60 years old (subject to certain exceptions). Some cities, such as both Shanghai and Beijing, require that foreign candidates have a certain number of years of work experience relevant to the job they will be taking in China.

China companies seeking to legally employ a foreigner generally need to complete the following steps. First, you will need to obtain an employment license with the local labor authorities for the foreign employee and then you will need to apply to the relevant foreign affairs office for a work visa invitation confirmation letter. The employee will then need to take that letter and apply for a work visa at the Chinese embassy in his or her home country. Upon arrival in China, the foreign employee needs to obtain (1) an alien employment permit from the relevant labor bureau and (2) an alien residence permit from the relevant public security department. Note that these permits need to be updated periodically.

A couple of cities recently promulgated new policies to encourage talented foreign citizens to establish permanent residence in China and to streamline the application and renewal process. Beijing issued new policies to attract senior level foreign talents, foreign nationals of Chinese ethnicity returning to China after studying abroad, foreign students, and foreign members of entrepreneur teams. This new program is staring in the Zhongguancun area — a technology hub in Beijing known as “China’s Silicon Valley.” Among other things, the new policies for the first time permit foreign students to do short-term internships in Zhongguancun and allow foreign students enrolled in universities in Beijing to start their own businesses. Certain foreign talents, such as those who are members of an entrepreneur team in Zhongguancun, will be able to obtain long-term residence permits and entry visas.

Now back to the “old” rules. Under the old rules (which are still the rules virtually everywhere in China) require China employers to have written employment contracts with their foreign employees and no matter how many “foreign elements” in that contract, it still must comply with national and local labor laws and requirements. Note that expat compensation packages with the parent company outside China will almost never be deemed a compliant employment contract for China’s labor law purposes. Foreign employees in China are generally entitled to the same benefits and protection as Chinese employees, including vacation and rest time and overtime pay.

I will write more about foreign employees’ benefits in a future post.

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.