Reporting requirements for employee assignments to China

At very regular intervals, I receive a very specific inquiry, namely about employee assignments to China. In the following, I would like to highlight some of the legal particularities.

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First of all – in contrast to postings within the EU – an employee posting to the People’s Republic of China does not require a separate official posting notification. In an international comparison, numerous countries have introduced such a posting notification. This primarily serves as an official control instrument for wage dumping, as the wage that the employee is to receive must be specified in the declaration.

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There is always a great need for advice regarding the entry visa: There are different types of visas for entry into China. The M visa (business visa) is suitable for stays up to 90 days and can also be extended to a 6- or 12-month multiple entry visa. The Z visa is suitable for foreigners who travel to China for a Chinese company or for a local branch of a foreign company and become economically active. The D visa allows permanent residence in China. Since 2015, most business trips that used to be possible with a business visa (type M) are only possible with a work visa (type Z) and a work permit. In some special cases, short-term activities, e.g. assembly stays or training courses, of up to 90 days can be carried out by an M visa. However, a Z visa is required for stays of 90 days. To find out the exact requirements, we recommend contacting the Chinese Permanent Mission or the Visa Application Service Center.

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However, a work visa is only valid in combination with a work permit (“Foreigner’s Work Permit”), which the future employer applies for at the authority on behalf of the visa applicant. Since 2017, applicants are screened using a points system during the application process.

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Provisions should also exist in the employment contract: Short-term stays can usually be covered under in-house business travel regulations. Here, however, employers should be aware of the limits of their right of direction – especially when traveling abroad. For longer assignments of around 6 weeks or more, it is often advisable to conclude a separate assignment agreement and, if necessary, an additional suspension agreement with regard to the domestic employment contract.

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In addition to the visa and the work permit, a residence permit (“Working-purpose Residence Permit”) is also required. Holders of a Z visa must have their work visa converted into a residence permit after arrival in China, but no later than 30 days after entry. Only then will the work permit be valid. It should be noted that the respective local authorities may have different requirements for the application and the necessary documents.

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As far as social security is concerned, many countries have concluded so-called social security agreements with China. If these apply, the employee is automatically covered by health insurance in China, for example. Often, however, the insurance coverage does not exist in all insurance branches (pension, unemployment,…) and also not for an unlimited time. There are also special regulations for some cities, such as Shanghai. Finally, the concrete determination of the relevant standards is important here.