China Updates- Visa Rules for Foreigners

It was announced that the new visa rules would come into effect on 1st September 2013. The old rules have been repealed, i.e. the new rules represent the entirety of the regulations on this area.

The key points are:

(1) Three definitions of illegal employment, viz., employment without a work permit, employment beyond the scope of the work permit (akin to a WFOE carrying on activities beyond its business licence), and (in some circumstances - but see below) employing a foreign student.

(2) In the case of breach of the regulations, both the employer and the employee individual may be penalised. For the employer, there is a potential fine of RMB10,000 per illegally employed person, capped at RMB100,000, with any "proceeds" of the illegal employment being subject to confiscation. For the foreign

employee, a fine of RMB5,000-20,000 may be imposed with, the possibility also of detention for up to 15 days. Agents are subject to penalties at half the rate of employers (but with full confiscation of "proceeds").

(3) Employers have an obligation to report (to the Public Security Bureau) the employment or cessation or change of employment of foreign staff. Similar provision apply in respect of interns.

(4) However, foreign students (i.e. those with a student visa) now have the right to undertake paid work off-campus, subject to endorsement and reporting requirements.

(5) A new imposition on employers is that a foreigner in certain positions relating to payment of a company's debts, may be prohibited from leaving China where the company has failed to pay its staff.

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