Retaining Foreign Talent in China – Shanghai and Beijing Improve Foreign Residence Permit Rules

By Dezan Shira & Associates
Editor: Andrea Tonini

In China, the words “talents”, “experts” or “high-level specialists” usually refer both to a company’s senior managers and professionals with significant experience in the high-technology industries. The governmental authority in charge of determining whether a foreign professional possesses special talents is the Human Resources and Social Security Bureau (HRSS). However, since an official and clear definition of such terms is yet to be provided, the requirements to satisfy vary depending on location.

In this article, we focus on the recent amendments introduced by the Shanghai and Beijing municipal governments to their own Residence Permits for Foreign Talents. Further to the relaxed requirements for permanent residency and visa applications, the new policies represent the latest move towards retaining foreign experts in China, whose skills are increasingly needed to develop the country’s fast-growing tertiary sector.

Shanghai

What is new?

On July 28, the Shanghai Municipal Government released the “Administrative Measures of Shanghai on Residence Permits for Foreign Talents,” which entered into force on July 1, 2015, and will last until June 30, 2020.

The main change brought in by the new Measures stands in the extension of the foreign residence permit’s period of validity. While the previous legislation (2013) set the maximum period of validity between one to five years, the limit has now been extended to 10 years. The period will be determined by the Shanghai Municipal HRSS bureau on a case-by-case basis, according to the applicant’s age, academic qualifications, field of specialization, working experience, employment contract and other conditions.

Application process

There are four categories of individuals who are eligible to apply for the foreign residence permit:

• Foreign students;
• Foreign experts or high-level specialists;
• Students or specialists who do not have a Chinese hukou but hold both a Chinese passport and permanent (or long-term) residency in a foreign country; and
• Specialists from Hong Kong, Macau or Taiwan.

The Permit entitles qualified foreign talents and their families – i.e. spouses and underage children – to a series of benefits related to social and medical insurance, along with education preferential policies for the children attending Shanghai local schools.

The applications have to be submitted at the Shanghai HRSS bureau, which will subsequently finish the review process within seven days of the filing date. Approved permits will then be issued by the municipal Public Security Bureau within 10 days.

Eligible applicants are required to submit the following materials to the Shanghai HRSSB:

• Application form;
• Proof of valid identification;
• Proof of education background and academic degree(s), or technical and professional certification(s);
• Proof of residency in Shanghai;
• Valid proof of health status;
• Employment contract;
• Proof of subject qualification of the employer (or investment);
• Proof of individual income tax clearance during period of employment; and
• Any other relevant materials.

RELATED: China Releases Final Draft of New Visa and Residence Permit Regulations for Foreigners

Government schemes – such as the “1,000 Talent Plan of Foreign Experts” – aim to attract an increasing number of overseas experts to work on long-term programs in senior management and research positions, while foreign graduates are encouraged to start their career in the country. In this respect, the Shanghai government has recently announced that international graduates from Shanghai universities will be eligible to apply for a chuangye  (start-up) private affairs residence permit valid for two years, and that will enable them to apply for a work permit.

Beijing

What is new?

Just like in Shanghai, the Beijing municipal Public Security Bureau has recently amended the 2013 foreign residence permit rules.

Effective from August, 2015, the new Measures cut the minimum processing time to obtain the permit in the country’s capital, reducing the time to process the application from 15 to 10 business days – not including the submission day. Further to this, foreign experts living in Beijing will be allowed to extend their Permit to a maximum two-five years.

By improving the local Foreign Residence Permit Rules, Beijing is greatly simplifying the bureaucratic procedures for the foreign high-level personnel and talents working in the city, particularly in the high-tech companies located in the Zhongguancun China Science Park (ZCSP). The ZCSP is the country’s science and technology core, which currently accounts 1,500 R&D centers and hi-tech companies set up by, or invested in, by overseas multinational companies.

Future Prospects

China’s demand for high quality talents is expected to grow in the coming years. Along with the improvements made in the foreign residence permit and work visa regulations, the country is paying high attention to the implementation of several talent building strategies.

Human Resources and Payroll in China 2015
This edition of Human Resources and Payroll in China, updated for 2015, provides a firm understanding of China’s laws and regulations related to human resources and payroll management – essential information for foreign investors looking to establish or already running a foreign-invested entity in China, local managers, and HR professionals needing to explain complex points of China’s labor policies.

Employing Foreign Nationals in China
In this issue of China Briefing, we have set out to produce a guide to employing foreign nationals in China, from the initial step of applying for work visas, to more advanced subjects such as determining IIT liability and optimizing employee income packages for tax efficiency. Lastly, recognizing that few foreigners immigrate to China on a permanent basis, we provide an overview of methods for remitting RMB abroad.

Revisiting the Shanghai Free Trade Zone: A Year of Reforms
In this issue of China Briefing, we revisit the Shanghai FTZ and its preferential environment for foreign investment. In the first three articles, we highlight the many changes that have been introduced in the Zone’s first year of operations, including the 2014 Revised Negative List, as well as new measures relating to alternative dispute resolution, cash pooling, and logistics. Lastly, we include a case study of a foreign company successfully utilizing the Shanghai FTZ to access the Outbound Tourism Industry.

• Previous Article Employer Branding in China: Attracting Chinese Employees
• Next Article HR Concerns in China during the Restructuring Process