December
2014
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C
HINA
B
RIEFING
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5
Employing Foreign Nationals in China: Visa Procedures
Expat hiring quotas
Officially, there is no regulationexplicitlyplacingquotas on thenumber
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
applications for foreign employees over a certain limit.
These guidelines are not published or explicitly revealed through any
channels, but based on the experience of
,
whenassessingwhether it is necessary for a company tohire foreigners,
and if so, how many, the government considers things like the
applicant’s 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
companies seem to be reviewed on a case-by-case basis. Companies
maydirectlyenquirewith the relevant authorities, providingdetails such
as their registered capital and target industry, toget an understanding
of howmany foreigners they will likely be allowed to hire, or contract
the services of a tax/lawconsultancy 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
the scope of a few existing categories. In this section, we walk you
through the most recent changes.
The F-visa, also knownas abusiness visa, was previouslyusedby foreign
businesspeoplevisitingChinaonbusiness butwhowerenot 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
nomore than sixmonths (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
period of time. The immigration bureaumay then conclude that such
an applicant is effectively working in China.
Another new visa type is the R-visa, which is issued to foreign high-
level 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 company’s 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
requirements than for a regular Z-visa. These requirements and the
documents needed are stipulated by local government authorities,
and thus vary per locality.
Major Purpose
of Visit
Visa
Type
Description
Exchanges, visits,
study tours and
other activities
F
Issued to those invited to
China for exchanges, visits,
study tours and other
activities.
Commerce & Trade
M
Issued to those invited to
China for commercial and
trade activities.
Employment
Z
Issued to those taking
up a post or seeking
employment in China.
Employment or
hired as priority
talent
R
Issued to high-level
qualified talent or those
whose skills are urgently
needed in China.
Both the R and Z-visas are official work visas. For the time being, the
Z-visa is themost 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
allowshim/her anunlimitednumberoftripsintoandoutofthecountry.
With anM-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.
