News and Updates

How The New PRC Social Insurance Law and Related Interim Measures Affect Expatriates

The new PRC Social Insurance Law came into effect on 1 July 2011, about seven months after its enactment by the Standing Committee of the National People's Congress in October last year.

The new Social Insurance Law stipulates for the first time that foreign employees in China will participate in China's social security framework.

In June 2011, the Ministry of Human Resources and Social Security released for public comment draft implementing regulations entitled "Interim Measures on Participation in Social Insurance by Foreigners Working in China". These draft Interim Measures clarified in some respects the operating scope of the Social Insurance Law.

At this stage, all foreign employees working in China are required to participate in all 5 basic social insurance schemes, namely:
  Basic pension
  Basic medical
  Work-related injury
  Unemployment
  Maternity

Foreign employees working in China cover foreigners directly employed by entities registered in China, as well as foreigners seconded to work in China even though their employment contracts had been signed overseas. Individuals from Hong Kong, Macau and Taiwan working in China also fall within the category of foreign employees.

Only those foreign nationals whose countries have already executed bilateral or multi-lateral social security treaties with China may be exempt from participation under the Social Insurance Law. Currently, China has concluded such treaties with only Germany and South Korea.

As yet, there is no official confirmation on the rates of contribution to be imposed on foreign staff or their employers. i-Admin's team of statutory consultants will continue to monitor government and regulatory updates to ensure due compliance by our clients.

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