China – New Work Permit Policy to be Implemented Nationwide in April 2017

What has changed

The New Work Permit Policy in China will be implemented nationwide beginning April 2017.

A trial period of the new policy began in November 2016 for selected pilot jurisdictions, including Shanghai, Beijing, Chengdu, Anhui, Guangdong, and others. However, some jurisdictions are still in the process of implementing the pilot program.

Who is affected?

  • All Companies based in China and intending to sponsor foreign employees in China.

What to expect

Consolidating two (2) types of Work Permits into one (1)

The Alien Employment Permit (AEP) and the Foreign Expert Permit (FEP) will be consolidated into one (1) Work Permit Card. Under the current rule the two (2) types of Work Permits are managed by two (2) separate Bureaus, the State Administration of Foreign Experts Affairs ‘SAFEA’ and the State Ministry of Human Resources and Social Security ‘MOHRSS’, both with different standards, criteria and systems. Consolidating the two (2) Permit aims to unify the standard of application and for the government’s management and control of the same applications.

Introduction of an online system

All employers in China will be required to register online and apply for an online account for processing foreign employees’ Work Permit applications. Work Permit applications will be filed and processed via the online system. Currently, using an online system for work permits applications are only required for some permit types and is not utilized nationwide.

Categorizing applications into three (3) groups

A point-based quota system has also been introduced under the Work Permit category classifying the foreign talent pool into Top Talents ‘Group A‘, Professional Talents ‘Group B‘ and Non-technical workers ‘Group C

  • Group A: High-end personnel (in Chinese: 外国高端人才)
  • Group B: Professional personnel (in Chinese: 外国专业人才)
  • Group C: Ordinary or government approved less-skilled, temporary, seasonal personnel (in Chinese: 外国普通人员或附合国内劳动市场须求的外国人)

What to expect – specific to sponsoring companies in Shanghai

Companies that are registered with their regional headquarters based in Shanghai currently enjoy a “green channel” immigration path and several favorable immigration policies. These are expected to change in the following ways:

  • Foreign employees sponsored by the entity are currently exempted from Consular Work-Z Visa requirements and can apply for Work Permits after arrival on a Business-M or Tourist-L Visa.  The new policy will likely cancel the “green channel” and require Work-Z Visas for all foreign travelers intending to undertake work-related activities, entailing additional procedures and lead time.
  • In the event that foreign employees fall into Group B of the Work Permit category, the following documents will be required that are not required in Shanghai under current policy:
    • Police Clearance Certificate (PCC) issued by the relevant government authority from home country
    • Original university degree certificate fully legalized by the Chinese Consulate/Embassy

It is expected that the requirement of the additional documents will cause additional lead time and costs to the sponsoring employer in China.

  • Salary information to support new applications and an income tax certificate to support renewal applications for verification will be required under the new policy. These documents were not required under the current policy. Thus, additional lead time and resources will be required to gather these documents and to ensure the accuracy of the information to submit.  False or incorrect salary/tax information will impact the company credit and thus, the future applications.

What you need to do
Planning ahead

  • General information has been announced, but the local Bureaus are still in the process of confirming the details of the implementations. Emigra Worldwide is following up closely on the trend and will provide appropriate strategies to our clients who are affected by the new policy changes.
  • Emigra Worldwide recommends that sponsoring entities in China along with their HRs be prepared for lengthier processing times and additional involvement in the processes, especially during the implementation stages of the new policy, and set the appropriate exceptions with their foreign employees.
  • Contact your Emigra Worldwide representative for further details on how these updates may impact you or your client.

The information above was provided by Emigra Worldwide, our global network partners, and relevant government authorities. The information herein is for general purposes only and not intended as advice for a particular matter. If you have any questions, please do not hesitate to contact the global immigration professional with whom you work.