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China’s latest policy for foreigners’ work permit application

By Mosley Li, China Briefing, Dezan Shira & Associates

Due to the COVID-19 pandemic and subsequent travel bans, many expatriates who had returned to their home countries have been restricted from re-entering China. Therefore, renewing the Chinese work permits has become a complicated matter for those stranded.

Although the Chinese government has issued a temporary policy allowing foreigners to renew their work permits remotely, the process has not been completely resolved. There could certainly be difficulties in renewing foreigners’ residence permits and the expiration of the same around this time may only impede the second renewal of their work permits.

Moreover, in July, some local governments appear to have tightened rules on work permit applications with an eye to prevent people from setting up shell companies solely for visa purposes.

China work permit renewal on remote basis

To help expatriates stranded overseas to renew their Chinese work permit, many local foreign offices have released a temporary policy. For example, on Feb 1, the Shanghai Administration of Foreign Experts Affairs has announced to introduce the implementation of the “no-visit” examination and approval for all matters related to the work permit for foreigners in Shanghai.

According to the policy, applicants for renewal of work permits are no longer required to bring the original application documents to the local foreign affairs office in China, but could renew them remotely by giving an undertaking on the authenticity of the documents.

The above policy has greatly assisted the process for foreigners’ work permit renewal; however, some issues have not been fully addressed.

Since there has been no policy update on residence permit renewal, foreigners still need to be present in China and provide their entry records for the renewal. In fact, a large number of foreigners got their work permits renewed, but, with the expired residence permits.

Things may become more complicated after 12 months when the work permit is needed to be renewed again. As there is still no change on rules regarding residence permit renewal, those who were unable to renew their residence permit last year, may not be able to renew their residence permit this year, either.

However, because a valid resident permit is one of the primary requirements for the renewal of a work permit, without a valid residence permit, expatriates stranded outside China may not be able to renew their work permits anymore.

Upon Dezan Shira’s confirmation with the Shenzhen foreign affair office staff, here are some solutions:

  • Expatriates can ask their Chinese employers to cancel their work permit or
  • They can just let the work permit expire itself.

Applicants can reapply for the work permit as their first-time application, when they want to reenter China.

In this case, we suggest that you make the following preparations beforehand:

  • Apply for a new non-criminal record and get it notarized before you are planning to come to China.
  • Make sure to get the COVID-19 vaccine to protect your health.
  • Keep track of the latest policies released on the Chinese embassy’s website in your home country – sometimes different embassies in the same country may not be synchronized on the policy update, make sure you check them all once in a while.

Tightened rules on work permit application

On top of the worrisome news, in July, the Guangdong province foreign affair office appears to have tightened rules on work permit application. This can be a big hurdle for start-up companies, since obtaining a work permit is often the first step towards sending employees to China.

Additional application documents required

Some first-time work permit applicants are now requested to provide additional documents that were never requested before, including (for your very general reference):

  • Leasing contract for the office
  • Introduction of the company’s current stage of operation
  • Proof to show the necessity, urgency, and importance of hiring foreign nationals.
  • Contact details of clients/vendors

From our perspective, the purpose of tightening the rules on work permit applications is to ensure that applicants have a genuine need to work in China, and not otherwise. This is because during the pandemic, some foreigners set up companies in China, most likely, only for obtaining a work visa.

Differentiated application requirements for different positions

From our recent experience, it emerges that a company’s legal representative needs fewer supporting documents to receive the approval when compared to the other executive positions.

Why? Because the legal representative of a Chinese company will need to be present physically for some company-related procedures, like going to the bank for basic bank account setup, setting up a company tax account at the tax bureau, and completing the real-name authentication test.

However, the legal representative now needs to sign a labor contract, instead of simply uploading a business license. Additionally, the legal representative must have a job title in the company.

You should prepare more documents in advance to support the application, if you are not the legal representatives of the Chinese company.

Commitment to hire Chinese employees

In the recent work permit system feedback we received from the Guangzhou SAFEA, companies hiring foreigners must have made or are expected to make a written commitment on hiring Chinese employees, otherwise their foreign employees’ work permits may not be renewed or the applications won’t be processed.

This is also a way to ensure the company is operational (rather than a shell firm set up for visa purposes). If the company is obligated to hire Chinese employees, but, still has not done so, the work permit renewal could then also be rejected.

Shenzhen’s Safea seems to be following suit, urging companies to hire Chinese employees. For one-person companies established for visa purposes only, the renewal application could be a real challenge under the current circumstances.

This article first appeared in Asia Briefing, published by Dezan Shira Associates. The company advises international investors in Asia and has offices in China, Hong Kong, Indonesia, Singapore, Russia and Vietnam. Please contact them via info@dezanshira.com or their website www.dezanshira.com.

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