Issue 150 December 2014

From Dezan Shira & Associates

Employing Foreign Nationals

in China

p.

Employing Foreign
Nationals in China:
Visa Procedures

p.

Retrospective:
15 Years of
China Briefing

p.

10

Paying Foreign
Employees:
IIT and Bonus
Planning

150

th

ISSUE

c e L E B R AT I O N
Includes Review of
Past Iconic Covers

p.

15

Special Feature:
Remitting Your
RMB Abroad

www.china-briefing.com

December 2014 | CHINA BRIEFING - 1

Employing Foreign Nationals

in China: Visa Procedures

- By Zhou Qian and Steven Elsinga, Dezan Shira & Associates

With its unique culture, vast geographic size, and fast-growing

The overall number of expats working in China has increased

economy, China has long held a special appeal for foreign visitors.

dramatically since the launch of reform and opening-up (in 1978).

For more than twenty years, the last of these reasons has drawn a

According to Chinas most recent National Census held in 2010 - the

wave of foreign jobseekers to China to start or continue their careers.

first to record the number of foreigners residing in China - there are

Being a foreign employee in China, however, is not always smooth

at least 600,000 expats working or living in cities throughout the

nor easy, especially considering the countrys fast-changing markets

country, broken down by nationality in the chart below.

and regulatory system. Here we provide a quick sketch of Chinas

Top 10 Foreign Nationalities in China

expat demographics, followed by the procedures for obtaining

Total: 600,000
(HK, Macao, Taiwan not included)

documentation to legally work in China.

Overview of expats working in China

3%

There can be no doubt that in recent years, Chinas expatriate make-up

31%

Germany

has been changing. With the countrys domestic work force steadily

Other

3%

21%

cultural disconnect of previous generations.

3%

12%

The role of expats is changing as well. Where multinationals once came to

3%

11%

6%

7%

maturing, managerial positions are increasingly being taken on by

South Korea

India

Chinese talent, often with foreign degrees in hand and without the

United States

France

China mostly for manufacturing and exporting, they are now increasingly
here to access the Chinese consumer market, and are shifting their focus
to logistics, warehousing and distribution accordingly.

Canada

Japan

Myanmar

Vietnam

Expat
Demographics

97,000

Other

107,000

Unsurprisingly, most expatriates

are to be found in Chinas firsttier cities and its developed
coastal region. The high number
of Vietnamese and Burmese
nationals in China explains
the inclusion of Yunnan and
Guangxi. More surprising is the
comparative lack of Russian
expats, who did not make the
Top 10 - nor was the ChinaRussia border included in the Top
10 most popular regions.
As for industries, according
to a survey conducted by The
Guardian, 85% of expats work
at international firms, with the
top three sectors being sales and
marketing (30%), banking and
finance (25%) and engineering
(15%).

4 - CHINA BRIEFING | December 2014

Beijing

24,000
Liaoning
33,000
Shandong
64,000
Jiangsu
209,000
Shanghai

C H I N A

36,000
Zhejiang
47,000
Yunnan

63,000
Fujian
23,000
Guangxi

235,000

Guangdong

Employing Foreign Nationals in China: Visa Procedures

Expat hiring quotas

Officially, there is no regulation explicitly placing quotas on the number
of expats a company can hire. However, in China, local government
agencies often the municipal Human Resources and Social Security
Bureau have the authority to decide on applications for hiring
foreign employees. In practice, these agencies have a habit of refusing

Another new visa type is the R-visa, which is issued to foreign highlevel personnel and those with special talents in shortage in China.
What is meant by high-level personnel is not yet entirely clear, but
this likely refers to a companys senior management. So apart from
the Z-visa, the R-visa can now also be used for employment purposes
in China. Applicants for an R-visa need to satisfy more stringent

applications for foreign employees over a certain limit.

requirements than for a regular Z-visa. These requirements and the

These guidelines are not published or explicitly revealed through any

and thus vary per locality.

channels, but based on the experience of Dezan Shira & Associates,

when assessing whether it is necessary for a company to hire foreigners,
and if so, how many, the government considers things like the
applicants business scope and size, registered capital, and internal
structure, as well as the specific position in question. For example, a
company with little registered capital wanting to hire a large number
of foreigners is very likely to see its application refused.
There are, however, no firm rules or guidelines on the matter, and

documents needed are stipulated by local government authorities,

Major Purpose
of Visit

Visa
Type

Description

Exchanges, visits,
study tours and
other activities

Issued to those invited to

China for exchanges, visits,
study tours and other
activities.

Commerce & Trade

Issued to those invited to

China for commercial and
trade activities.

Employment

Issued to those taking

up a post or seeking
employment in China.

Issued to high-level
qualified talent or those
whose skills are urgently
needed in China.

companies seem to be reviewed on a case-by-case basis. Companies

may directly enquire with the relevant authorities, providing details such
as their registered capital and target industry, to get an understanding
of how many foreigners they will likely be allowed to hire, or contract
the services of a tax/law consultancy such as Dezan Shira & Associates.

Visa types
In September 2013, the Chinese government amended its visa
regulations. The revised law mainly introduced a number of new visa
categories, increasing the total number from eight to 12, and altered

Employment or
hired as priority
talent

the scope of a few existing categories. In this section, we walk you

through the most recent changes.
The F-visa, also known as a business visa, was previously used by foreign
businesspeople visiting China on business but who were not employed
by a Chinese entity. However, the new regulations have now limited its
scope to non-commercial purposes only, such as cultural exchanges,
visits and inspections. At the same time, the regulations introduced
a new visa for business travelers called the M-visa. It is applicable to
foreigners coming to the country for business and trade purposes of
no more than six months (180 days). Like the previous F-visas (business
category), M-visas are most suitable for foreigners who will:
Spend less than six months in China during any one calendar year
Be frequently entering and leaving China
Not hold a formal senior position at an entity based in China
Not receive payment from a company incorporated in China
M-visas can be renewed after six months, however, there is always the
risk that the immigration bureau may refuse the application. This risk
grows if the foreigner has resided continuously in China over a long

Both the R and Z-visas are official work visas. For the time being, the
Z-visa is the most common type used by foreigners working in China,
and will likely remain so, considering the stricter requirements and
remaining uncertainty regarding the R-visa.
An employee on a Z-visa needs to subsequently apply for a residence
permit. The residence permit allows the foreigner to stay in China for
the length of time as stipulated by the permit, usually one year. It also
allows him/her an unlimited number of trips into and out of the country.
With an M-visa (or the previous F-visa) this is not possible, and leaving
the country often means having to reapply for a new visa.
The new law also introduces the concept of a private non-enterprise
unit. Foreigners working for such organizations need to apply
for a Foreign Expert Certificate, instead of an Alien Employment
Permit. We will go into more detail about these documents in the
following pages. Depending on how the implementation of the new
regulations proceed, foreigners working for private non-enterprise
units may soon have to apply for R-visas instead of Z-visas.

period of time. The immigration bureau may then conclude that such
an applicant is effectively working in China.

December 2014 | CHINA BRIEFING - 5

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