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Human Resources and Payroll in China 2016-2017 (5th Edition) -
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Participation of Foreign Employees
The inclusion of foreigners in China’s social insurance system was formally indicated when the new
Social Insurance Law was promulgated in October 2010. However, it was not until September 2011
that China’s Ministry of Human Resources and Social Security (MOHRSS) announced in the Interim
Measures for Participation in the Social Insurance Systemby ForeignersWorking within the Territory
of China that foreigners should be included in the Chinese social insurance system, starting from
October 15, 2011.
Subsequent to the promulgation of these regulations, various cities, including Beijing and Suzhou,
have issued local implementation rules requiring foreign employees to enroll in the social insurance
scheme. However, the implementation of the scheme for foreigners remains uneven and uncertain
across China.
Registering for Social Insurance and the Housing Fund
Although both employee and employer make contributions towards the social insurance funds
in China, it is generally the case that the employer is responsible each month for withholding the
contribution of the employee from gross salary, and making the employee’s contribution together
with that of the employer.When hiring a new staffmember, employers need to register him/her with
the local Social Insurance Bureau and the Housing Fund Bureau. As each city or region regulates its
own social insurance scheme, the procedures vary per city and change rapidly. Below, we describe
how this procedure generally works.
Social Insurance Registration
1. To be able to hire staff, the company needs to obtain a social insurance number. Certain
documents, such as the company’s business license, the enterprise code certificate, ID
documents of the legal representative, RMB bank account documents, etc., are required.
If employers pay employees through a branch of the company, they will often need to bring:
• Parent company’s business license and enterprise code certificate.
• Power of attorney chopped with company seal.
2. After obtaining the social insurance number, companies need to enter the employee’s
details into the software provided by the Social Insurance Bureau. This information includes
the employee’s salary, as this determines the social security contribution to be made.
3. Companies can sign a contract with an eligible bank to ensure that payments are made directly
to the Social Insurance Bureau each month. In most cases, the first payment should be done by
company-issued check. Funds can be automatically debited from the second month onwards.