China Implements New Work Authorisation Policies on Expats

After the implementation of a pilot programme in ten locations (including Beijing and Shanghai) for six months, the China State Administration of Foreign Expert Affairs (“SAFEA”) has recently issued the Circular on the Implementation of Work Permit Services Guidelines for Foreigners in China (“Guidelines”), which takes effect from 1 April 2017 across the country.

The new work authorisation policies signal a new era of employment management for expats in China. Compared with the pilot programme, the Guidelines maintain the basic principles of optimising the administration of work authorisation and further specify and detail the provisions of criteria and procedural requirements for work permit applications (“new policies”). These new policies may have a significant impact on the expat employment market in China and strategies of structuring a cross-border secondment arrangement.

Key points of those impacts include:

  • Classified administration of expats at three levels. The new policy classifies expats into three different levels on a score-based assessment by their education, work experience, salary awarded from the sponsoring entity, Mandarin proficiency, working locations in China, age and so on. Applicants in each of the three categories are generally subject to the same procedural requirements, but high-end talent in Category A can be entitled to some preferential conveniences.
  • Engagement certificates. An engagement certificate or a cross-border secondment letter will be officially acceptable for the purpose of proving the connection between a work permit applicant and a Chinese entity under certain applicable circumstances (including when the applicant is a service provider under an overseas service contract).
  • Renewing work permits without exiting China is feasible. An expat is permitted to renew his/her work permit without exiting China if he/she falls within certain applicable circumstances (including when changing employers but the job position remains unchanged and the residence permit is still valid).
  • Credit management system. All applicants will be identified by a single code number through which the governmental authority will file on the foreigner’s work history.
  • Requirements on invitation letter are removed. Chinese employers previously had to apply for a work visa invitation letter issued by an authorised organisation after obtaining an Employment Licence and before moving to the step of the work visa application at a Chinese embassy or consulate overseas. This step is now no longer required.
  • E-application system is launched. Companies are required to create their online accounts with the SAFEA and then submit the expat’s application through an online system. Where an agency is involved, the required information of the agency must also be registered online, while the authorisation document and the ID card copy of the handling person must be provided on site.

In addition, the Employment Permit and Expert Permit are combined into a single Work Permit. The new approval system was launched on 1 April 2017 nationwide. The old versions of the Employment Permit and Expert Permit will no longer be issued after 1 July 2017. Foreign employees, who hold the Employment Permit and Expert Permit with the remaining valid period of six months or above, may voluntarily apply to change to a Work Permit after 1 October 2017 through the online system.

Action Items

As these new policies are still in the early implementation stage, it may take a few months for the local authorities to come up with detailed practical rules and update the handling system. Additional requirements on procedures may be added. Solicitors, when advising clients in such an application process, should keep the change of time cost and local variations in mind.

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Senior Associate, Deacons