the Law on Foreigners’ Participation in Social Insurance in China
1. Q: When the Law on Foreigners' Participation in Social Insurance in China will come into effect:
A: It will take effect on Oct. 15, 2011.
2. Q: Who are required to participate in basic pension insurances etc. mandatory social securities and who will pay?
A: According to the Interim Measures, foreigners who are employed by any entity in China are required to participate in basic pension insurance, basis medical insurance, work-related injury insurance, unemployment insurance, and maternity insurance. Employers and foreign employees must pay social insurance contributions in accordance with relevant regulations.
For foreign employees who enter into employment contracts with employers outside of China and are then dispatched to work in branch offices, representative offices or other entities registered or recorded in China, both the foreign employees and the branch offices' representative offices or other entities in China are required to pay the social insurance contributions in accordance with relevant regulations.
3. Q: Is there any exceptional and how about employees from Hong Kong, Macau and Taiwan?
A: For foreign employees who are nationals of countries that have entered into bilateral or multilateral treaties relating to social insurance with China, participation will be handled in accordance with such treaties. Currently only South Korea and Germany have such treaties with China. It is also unclear whether employees from Hong Kong, Macau, and Taiwan, which China considers part of its territory, need to comply with the Interim Measures.
4. Q: When the social insurances registration should be filed for foreign employees?
A: Employers (including branches or representative offices) should complete the social insurance registration for foreign employees within 30 days of the issuance of Alien Employment Permits to foreign employees. Social security authorities are authorized to supervise the payments of social security contributions. If employers (including the branches or representative offices) fail to pay social security contributions for foreign employees, they will face administrative penalties.
5. Q: How the social insurances for foreign employees will affect such employees and their employers:
A: The implementation of the Interim Measures will significantly increase the tax burdens of foreign employees and their China employers. The additional tax burden can reach about US$10,000 per year for each foreign employee and his/her employer.
Q: How the fund in the social insurances accounts will be disposed in case leaving China or other circumstances:
A: If meeting the conditions, such foreigners may enjoy the social insurances treatments, e.g. pension.
If such foreigners leave China before reaching the age of enjoying pension, his/her social insurances account will be kept and will calculated cumulatively if he/her will be employed in China again. Upon writing application for terminating the social insurances, the amount in his/her social insurances account will be paid to such foreigner.
In case of decease, the balance in the social insurance account can be inherited.