The long-awaited implementing regulations to the Law of the People's Republic of China on Entry and Exit Control (“Entry and Exit Control Law”) have been issued by the State Council. The regulations introduce new visa categories, memorialize practices to be implemented by the local authorities, and address employer obligations when hiring foreign workers.

Background

The Entry and Exit Control Law was passed last summer, one year ahead of its effective date of 1 July 2013. This piece of legislation was widely viewed as an overhaul of China's immigration laws, with significant provisions governing the employment of foreign workers. Regulations implementing the Entry and Exit Control Law have been greatly anticipated, with a draft version released in May 2013 for public comment. The final regulations have now been passed and will go into effect 1 September 2013.

Key Provisions

We highlight key employment-related provisions that will be relevant to multinational employers doing business in China.

  • Business Visa. Under the previous law, the F visa category was used for business travelers to visit China, including for the purpose of short-term training. Under the new regulations, an F visa is now defined as the category for exchanges and similar visits, while the newly created M visa is to be used for commercial trade activities and is expected to be the appropriate visa category for business visitors. Neither visa category makes reference to training or training-type activities. The PRC embassies and consulates in charge of visa issuance overseas are expected to provide guidance on F and M visa application requirements.
  • Talent Visa. The R visa has been created for high-level talent and specialists whose skills are in short supply in China. The requirements for high-level talent classification are expected to be defined by relevant PRC ministries. R visa holders will be permitted to apply for Residence Permits for employment purposes.
  • Work Visa. The Z visa continues to apply to foreign nationals who will work in China. While the draft regulations created Z sub-categories for short-term versus long-term stays, this language does not appear in the final regulations.
  • PSB Audits. The local public security bureaus (“PSB”) responsible for processing Residence Permit applications may conduct verification through various methods including interviews and onsite visits. Employers sponsoring foreign workers must plan for such audits during Residence Permit processing. Such audits have already been in practice for some months in cities like Beijing and Suzhou, where the PSBs have telephoned employers to confirm employment details such as job position and duties and visited worksites to confirm job location.
  • Student Interns. Employers now have guidance on hiring interns who are studying in China. Under the new regulations, foreign students holding Residence Permits for study purposes may participate in work-study programs and off-campus internships by obtaining school approval and applying for PSB approval to be granted via an endorsement in the Residence Permit. The PSB endorsement will be specific, identifying the internship location and period, at a minimum. This is important guidance for employers because the Entry and Exit Control Law's definition of illegal employment includes a foreign student who performs work that exceeds the specified scope or duration of the work-study position.

In contrast, the regulations are silent on the issue of foreign interns who are studying overseas (rather than in China) and what visa type would apply for these foreign students to engage in internships and similar training-type activities.

  • Employer Obligations. Employers continue to have a duty to report on material changes to a foreign worker's employment such as termination or job location change. Employers also have the affirmative obligation to report on a foreign employee's violation of these regulations.  

What to Expect Next

In the coming weeks, the PRC authorities who administer the travel and activities of foreign nationals in China are expected to roll out new or different practices and procedures. Additional guidance, whether from the overseas embassies and consulates or the local labor bureaus and PSBs across China, are also expected. Some change have already been implemented. These include extended processing times and new documentation requirements such as legalized police clearance certificates (in cities that previously did not impose such requirements on work permit applicants). Employers are advised to build in additional lead time for any foreign worker hire or transfer to accommodate these changes.