In recent weeks, several of our clients in Shanghai were raided
by the local Public Security Bureau ("PSB", China's
police). The PSB was looking for evidence of these companies hiring
foreigners or foreign interns without the proper papers.
Chinese laws establish that foreigners can only work in China if
they obtain a proper employment permit and work visa. Many young
applicants do not meet the minimum standards for being employed in
China, and therefore are encouraged to enter on short-term business
or even tourist visas. This exposes them, and the employer, to
Conditions for Foreign Interns in China
Moreover, if foreigners come to China for a shorter period (up
to six months) to complete an internship then they must enter on a
special business (F) visa for interns. However, the procedures for
obtaining such an internship visa are relatively complicated, and
one strict condition is that the intern cannot receive any kind of
payment; even indirect allowances or reimbursement of expenses may
be identified as remuneration by the PSB and therefore subject to
administrative punishment. This conflicts with some bilateral
treaties that China has signed with several developed countries
which provides income tax benefit to qualified interns, but the
position generally held by the PSB is that such
intern-salary-friendly treaty clauses have not been locally
legalized in China, and therefore no interns should be paid.
Penalties under the New Exit & Entry Law
The timing of the recent raids may relate to the PRC Law on
the Administration of the Exit and Entry of Foreigners, which
has passed last year and will become effective on 1 July 2013. This
law establishes higher penalties in case of foreigners working in
foreign employees can be penalized between CNY 5,000 and CNY
20,000; additionally, he (she) can also be detained for 5 to 15
days, and can be deported.
Chinese employers (including foreign-invested companies) who
illegally hires foreigners can be fined at CNY 10,000 per person,
with a cap of CNY 100,000. In addition, any income resulting from
such employment can be confiscated.
In addition, the new law re-confirms the PSB's right to
on-site inspections and continuous inspections of suspects, and
where a suspicion of illegal employed cannot be clarified, then the
suspect can be temporarily detained.
Suggestions on Minimizing Risks
Companies that decide to hire foreigners or foreign interns are
strongly advised to follow the law, arrange for proper visa and
permits, and avoiding paying salaries where this is not permitted
(i.e. in the case of interns). In addition, to avoid that police
raids will disrupt business, companies should instruct personnel on
how to respond to such a raid. For example, the legal basis for the
raid and the ID cards of the officers should be confirmed first;
and the company should carefully organize how to assist the
officers in their search, and what information to provide them to
support their investigation.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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October 12th, 2016 - Immigration authorities conducted the 21st round of invitations under Express Entry in 2016 and 44th overall, inviting 1518 applicants for permanent residence with a lowest CRS score of 484.
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The Skilled Migrant Category (SMC)is the category that most people use to apply for residence.
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