The National People’s Congress has passed the Law of the People’s Republic of China on Entry and Exit Control, which takes effect July 1, 2013.  The new law not only governs the exit and entry of citizens and foreigners but also contains provisions concerning foreigners’ residence and employment in China.  The new law supersedes the existing entry and exit control laws, which will be repealed.

Key Employment-Related Provisions

The new law expressly addresses the employment of foreigners in China.  Specifically, the law requires foreign nationals to apply for work authorization and prohibits employers from engaging foreign nationals who lack work authorization.  A foreign national is deemed to be illegally employed if he or she: (1) works without having secured a work permit or related residence permit; (2) engages in activities beyond the scope permitted by the work permit; or (3) is a foreign student engaging in activities beyond the scope permitted by the work-study position. 

On a broader level, the law requires in-country activities to match the type of visa held.  Foreigners are prohibited from engaging in activities not consistent with the purpose of the visit or stay in China, which can be a basis for being denied entry.  A foreigner would run afoul of these provisions, for example, by applying for an L visitor or tourist visa but entering China to work.

Failure to Comply

Compared to the current law, penalties for non-compliance have been increased, such as the following.

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A foreigner may be removed from China for illegal residence or employment, and in such a case will not be permitted entry during the next 1- to 5-year period.  Violation of the new law under "serious" circumstances may lead to deportation, resulting in a 10-year bar.  What specific actions will lead to a removal or deportation under these provisions remains to be seen.

Other Noteworthy Provisions

  • Few references are made to the "talent" visa, a new category highly anticipated by employers looking for options beyond the limited work and business visas currently available for sending foreign employees into China. Implementing regulations will hopefully define eligibility criteria and activities permitted under this visa type.
  • The education authority is mandated to issue regulations governing "work-study" activities for foreign students. Such regulations are expected to provide long sought-after guidance to employers seeking to provide internships to student visa holders, particularly as violations of these same regulations would constitute illegal employment under the new law.
  • Upon discovery of a foreigner's illegal entry, residence, or employment, PRC citizens have an affirmative duty to report to the local public security authority. The new law does not state penalties for failure to report.
  • A unified platform for information sharing will be established for the relevant government authorities, which may include a system for the collection of fingerprints and other biometrics. This would bring China in line with other jurisdictions such as Hong Kong and Singapore that have biometrics requirements for the work permit process.

Conclusion

In the coming months, implementing regulations are expected on key provisions ranging from the new "talent" visa category to the employment of foreign students.  The regulations are also expected to provide clarifying guidance on the validity of visas and residence permits and to impact local practice and procedure.  The existing regulations governing the administration of the employment of foreigners may be impacted.  Employers are encouraged to stay tuned for future updates, as businesses will need to remain agile to meet the legal changes ahead.