The new PRC Social Security Law was adopted at the 17th meeting of the Standing Committee of the 11th National People's Congress on October 28, 2010 and came into force on July 1, 2011 (the "New Law"). The New Law aims to provide a more comprehensive and effective national social security system and includes participation of foreign nationals in the PRC social security system. Before the New Law was enacted, local practices regarding social security contributions by foreign nationals varied and were determined by provincial rules and regulations. Now, the New Law will provide more unified standards for foreign nationals' participation in the PRC social security system.

Further Details Expected

Additional regulations are expected that will address how contributions are to be made by employers on behalf of non-PRC employees. The Ministry of Human Resources and Social Security issued a draft Interim Measure on Participation in Social Insurance by Foreigners Working in China (Draft for Comments) on June 10, 2011 (the "Interim Measures"), which sets forth a definition of "foreign nationals working in China" and the scope of their participation, which includes receiving pension assistance and work-related injury, unemployment, and maternity insurance coverage. The Interim Measures also provide that both employers and employees are responsible for making their respective contributions for these types of insurance. These draft measures are expected to be finalized fairly soon.