China relaxes visa requirements for foreign talents amid trade conflicts

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Background

China's National Immigration Administration (NIA) introduced new rules that took effect on 1 August 2019 to facilitate immigration matters and the exit and entry of foreigners nationwide. The new rules form one of the 60 new measures announced by the PRC Ministry of Public Security (MPS) on 17 July 2019 designed to promote further economic development. This article highlights some key points of the new rules that are relevant to MNCs in China.

1. Expanding the scope of foreign talents eligible for permanent residence in China

According to the new rules, foreigners, together with their foreign spouses and minor children, are eligible to apply to the exit and entry administration department of the local public security bureau (Exit-Entry Bureau) for permanent residence in China if:

  • they have worked in China for four consecutive years and have actually lived in China for not less than six months each year, with an annual salary income of not less than six times the average salary of urban workers in the area where he/she is employed, as well as an annual individual income tax payment of not less than 20% of his/her salary income standard; or
  • they are foreign passport holders with Chinese descent who returned to work in China, with a doctoral degree or having worked at national key development areas for four consecutive years and having actually lived in China for not less than six months each year.

Based on the new criteria, it seems that, for MNCs in China, the majority (if not all) of foreign employees working in China on a full-time basis and with a manager level title or above would easily fall into the first category after reaching the required the timeframe. It also seems to be very easy for people of Chinese ethnicity from overseas with a doctoral degree to obtain the permanent residence in the future - according to the new rules, they may apply for the permanent residence at any time while they are working in China.

2. Expanding the scope of foreign talents eligible for long-term work visa or residence permit

In addition to easing the rules on permanent residence applications, the new rules also make it easier to apply for longer term residence permits. If a foreigner has been granted two consecutive (work-related) residence permits of 1 year or longer and has not done anything illegal in China, the foreigner may at the time of the third consecutive application apply to the Exit-Entry Bureau for a residence permit of 5 years. In addition, for those who are already staying in China, they may not need to leave China to apply for their work visa at an overseas Chinese embassy or consulate; instead they may apply directly to the Exit-Entry Bureau in China for a residence permit by submitting their work permit and other required documents.

Given the MPS will be granting 5-year residence permits, it remains to be seen whether the other permit required - the work permit - will also be granted for 5 years as well. The work permit is administered by the National Foreign Experts Bureau.

3. Relaxing visa application rules for foreign students performing internships in China

Overseas university students may now apply to the Exit-Entry Bureau for a 1-year visa to perform internships in China if they are invited by well-known local companies. Application materials include letters from the local inviting entity and documents proving their study at the overseas universities.

It is not clear what type of visa the Exit-Entry Bureau would issue to the foreign students for this purpose and what type of companies would be considered to be "well-known local companies". On the other hand, for overseas university students who come to China for internships based on intergovernmental agreements, they will need to apply for work-related residence permits in accordance with the relevant regulations.

What this means for employers

With the implementation of the new rules, more foreigners working in China may obtain Chinese permanent residence or long-term residence permit in the future. This helps reduce the relevant administrative burden of renewing visas to some extent. However, the extent to which these new rules would help employers retain foreign talents would depend on the benefits associated with obtaining China permanent residency or long term visas. Given the contents of the rules are still organized on a relatively general basis, employers currently engaging or seeking to engage foreign talents are advised to pay close attention to how the rules are implemented in practice.