A new guideline titled “The Procedures on Short-term Employment for Foreigners Working in China” (“Guideline”) was released on November 6, 2014 by the Ministry of Human Resources and Social Security of the PRC along with three other ministries to regulate the employment of foreign nationals working in China for less than 90 days (“Short-Term Employment”). The Guideline came into effect January 1, 2015.
Before the Guideline, China had laws governing foreigners’ employment that was greater than 90 days, but there was no clear regulatory guide for Short-Term Employment. The Guideline has filled this gap and will have a significant impact on the approval requirements and visa application for foreigners traveling to China to work for short periods of time.
The Guideline applies to foreigners’ Short-Term Employment in China that involves any of the following activities: (1) technical, research, management, etc., in cooperative projects; (2) training as a coach or athlete in domestic sports organizations; (3) film production; (4) fashion shows; (5) commercial performances; or (6) any other activities identified by the authority (“Covered Activities”).
The domestic Chinese entity engaging the foreign national for the short-term assignment involving a Covered Activity must apply for a specific work permit with the Chinese labor authority before the foreign national enters China. When the work permit is granted, the foreign national must apply for a Z visa (an employment visa) with China’s diplomatic establishments. Prior to the release of the Guideline, foreign nationals engaged for short-term assignments typically entered China on M visas and F visas, which are non-employment visits.
The Guideline expressly excludes the following activities from the list of Covered Activities: (1) maintenance, installation and training for purchased equipment; (2) instruction and inspection of a bidding project; (3) short-term secondment to a domestic branch, subsidiary or representative office of an offshore company; (4) attending sports matches; and (5) non-compensatory assignments such as volunteer work. Foreign nationals performing these activities must apply for an M visa or F visa, and not a Z visa.
The release of the Guideline reflects China’s regulatory intention to strengthen the management of foreigners’ Short-Term Employment in China. Failure to follow the Guideline may result in illegal employment by the engaging entity as well as the foreign national’s illegal presence in China, and result in fines imposed by Chinese authorities. In addition, the Guideline may have a tax implication for those foreign nationals to whom it applies.