Jurisdiction - China
Reports and Analysis
China – Tentative Measures for Enrolment in Social Insurance of Foreign Employees..

17 October, 2011


The Ministry of Human Resources and Social Security ("MOHRSS") promulgated the Tentative Measures for Enrollment in Social Insurance of Foreigners Employed in China ("Tentative Measures") on 6 September 2011. The Tentative Measures are set to come into force on 15 October 2011. 

The Tentative Measures are formulated based on the PRC Social Insurance Law ("Social Insurance Law"), which became effective on 1 July 2011. Article 97 of the Social Insurance Law provides that foreigners who are employed in China shall participate in social insurance analogically in accordance with the Social Insurance Law.
Before the promulgation of the Social Insurance Law and the Tentative Measures, somecities in China (e.g. Beijing, Tianjin, Suzhou, Shanghai, Shenzhen etc) had already allowed the enrollment of foreign employees in certain types of social insurance. However, this is a requirement under local legislation, which is not mandatory.
Social insurance in China
There are five types of social insurance in China:
(i) basic pension insurance;
(ii) basic medical insurance;
(iii) unemployment insurance;
(iv) work injury insurance; and
(v) maternity insurance.
The basic pension insurance, basic medical insurance and unemployment insurance shall be jointly contributed by the employer and employee. The work injury insurance and maternity insurance shall be solely contributed by the employer. The proportion of contribution by the employer and employee may vary between different cities.
Foreign employees
Article 2 of the Tentative Measures defines a foreign employee ("Foreign Employee") as a person not of Chinese nationality who is legally employed in China and obtains / holds:
(i) the employment permit / certificate (such as the Expatriate Employment Permit, the Foreign Experts Certificate and the Press Card) and the residence permit; or
(ii) the Foreigner's Permanent Residence Card.
A Foreign Employee may directly enter into the employment contract with a Chinese entity. He / she may also be dispatched by a foreign entity to a Chinese entity under secondment arrangements. In both scenarios, the Foreign Employee and the Chinese entity are obliged to contribute their respective proportions of social insurance.
Enrollment in social insurance
The Chinese entity at which the Foreign Employee is working is required to apply for social insurance registration for the Foreign Employee.
The Tentative Measures do not specify how a Chinese entity shall go through the social insurance formalities for those Foreign Employees who have already been working in China. 
Social insurance benefits
Under the Tentative Measures, Foreign Employees will enjoy the same social insurance benefits as employees of Chinese nationality.
If a Foreign Employee leaves China before he / she is eligible to collect the pension, his / her individual social insurance account will be retained. If the Foreign Employee wishes to terminate his / her social insurance in China, he / she needs to apply for the termination in writing and the amount in the individual social insurance account will be paid to the Foreign Employee in a lump sum.
Bilateral / multilateral social security agreements
If a bilateral or multilateral protocol in relation to social insurance has been signed / ratified between China and the Foreign Employee's country of nationality, such protocol will apply.
Upon the effectiveness of the Tentative Measures, Chinese entities which hire Foreign Employees must apply for social insurance registration for those employees and pay the social insurance contributions. This will be a mandatory requirement enforceable on a nationwide basis. This will no doubt cause an increase in labour costs for Chinese companies hiring foreigners.
The Tentative Measures will also unify/harmonise the current various local policies and practice in this respect. It is expected that the local offices of the MOHRSS will shortly issue local implementation rules in relation to the participation of the Foreign Employees in social insurance.
For further information, please contact:
Carrie Yang, Clyde & Co
Amanda Li, Clyde & Co


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