Notice on the Trial Implementation Plan for the System of Work Permits for Foreigners in China

The Trial Implementation Plan (the “Plan”) was adopted by the State Administration of Foreign Experts Affairs of the PRC on 27 September 2016. It reforms the regime for work permits for foreigners and merges the two previously separate systems of the “Work Permit for Foreign Experts in China” (applying to certain categories of specialised foreign workers) and the “Foreigners Employment Permit” (applying to “common” employees) into one system. The outcome is the “Work Permit for Foreigners in China” (the “Work Permit”).

The Plan is restricted to the municipalities of Beijing, Tianjin and Shanghai and in the provinces of Hebei, Anhui, Shandong, Guangdong, Sichuan, Yunnan and Ningxia Hui from October, and is on trial from 2016 until March, 2017. The aim is to adopt the new system nationwide starting from April, 2017, after which working permits issued under the “old regime” will remain valid and will be converted into “new regime” permits on a voluntary basis.

The Plan splits the procedure to obtain a work permit into two main parts. Before entering China, the applicant must submit application documents through an online system for preliminary examination (the employer will need to register into the system by means of a specific procedure). Then, generally, the documents will be sent in printed format to the competent authorities in China, leading to the issuance of a “Notification Letter for Work Permit” (“Notification Letter”).

The “Notification Letter” will then be presented to the PRC embassy or consulate of the applicant’s residence in order to obtain a visa; within 15 days of entry into China, the “Notification Letter”, along with the application documents in printed format, must be submitted to apply for a Work Permit. Finally, the Work Permit will be submitted to the local Public Security Bureau (police station) to obtain a residence permit.

The new system divides applicants into three categories.

Category A (“outstanding foreign talents”) brings together, among others, persons having outstanding achievements in the fields of medicine, economics, technology, scientific research, architecture, industrial design, literature, sports, etc.; high-level personalities at certain international academic institutions, international financial institutions and international accounting firms; holders of high leadership posts in foreign government administrations, international organisations and NGOs; high level managers in foreign-invested enterprises in China belonging to the encouraged sectors of economy that fulfil certain standards in terms of revenue, employees, etc.; persons fulfilling certain remuneration standards and paying taxes for a certain amount (to be defined from time to time by the authorities); persons having invested in enterprises by means of own inventions, patents, etc..

Category B (“foreign professional talents”) mainly includes foreign professionals holding a bachelor’s degree or higher study qualification and having working experience of two years or more in the relevant field, as long as they “meet the requirements of the Guidance Catalogue for Foreigners Coming to Work in China” (a list-type document yet to be issued; it is interesting to notice that Guangdong province has had a similar document in place for some time) and are “talents needed for the social and economic development” of the country. The interpretation of these two requirements doubtlessly creates a margin of uncertainty and is possibly meant to allow “leeway” for policy changes by the Chinese government.

Category C (“ordinary personnel”) groups foreigners hired based on a permit by the Chinese government or based on agreements between the Chinese government and a foreign government, trainees under intergovernmental agreements, etc.

In addition, the Plan provides for a (provisional) table that attributes a score to individuals according to parameters such as remuneration, study and professional qualification, working experience, age, etc.. Individuals meeting a certain threshold are admitted into category A or B, according to the number of points, even though they do not belong to the groups listed in the Plan a belonging to such categories.

No restriction on the number of permits is stipulated for category A, nor are there age or working experience requirements. A so-called “green channel” treatment applies, meaning that category A individuals benefit from an accelerated procedure for issuance of a Notification Letter and of a Work Permit. Moreover, individuals falling into category A do not need to submit application documents in printed format until after they have entered into China.

Category B individuals are granted work permits “based on market demand” and will need to fulfil the requirements of the above-mentioned Guidance Catalogue; they will generally need to be 60 or younger, to hold at least a bachelor’s degree and to have at least two years’ experience in the relevant working field.

Lastly, a so-called “quota administration” applies to category C workers, meaning that permits will be granted in the maximum number stipulated by the Chinese government from time to time. No privileged application channels apply to either category B individuals or category C individuals.

On one hand, the Plan brings unification, by merging the two previously existing regimes into one system for all foreigners working in China. This entails the obvious advantages of straightening out procedures and rationalising the use of administrative resources.

The new system differentiates applicants based on the degree to which they meet the needs of Chinese economic policies. Notably, the introductory part of the Notice uses the expression “gather and put to use the talented of the world”: indeed, the Plan provides a privileged path for applicants whose skills and qualifications are especially valued.

China must become more and more competitive in attracting foreign qualified personnel – not only in comparison with other developing economies, but also in comparison with the economies of “first world” countries. The reform is aimed at “better serve overseas talent coming to work in China”, said Zhang Jianguo, the leader of the PRC State Administration of Foreign Experts; “encourage the top, control the middle and limit the bottom”, goes a slogan circulated in connection with the Plan.