New exit-entry regulations for foreigners in China

The State Council of the People’s Republic of China (“PRC”) recently released the new Exit-Entry Administration Regulations for Foreigners (“Regulations”). The Regulations will take effect on September 1, 2013. They further specify the provisions of the PRC Exit-Entry Administration Law on issuance of ordinary visa and residence permits to foreigners and will replace the Implementing Rules of the PRC Administration Law on Entry and Exit of Foreigners which were issued in December 1986. The new Regulations will play a key role in the management of PRC visa and residence policies.

The Regulations introduce new visa and residence categories and change some of the current visa and residence policies toward foreigners. Both, individuals working in China or often undertaking business trips to the country as well as foreign invested enterprises hiring foreign employees should pay attention to the following changes:

Change of Visa Categories

1. The core purpose of the former F visa, namely visits to China for business and trade activities, will be covered by a new M visa in the future. As far as we can see, for foreigners wishing to enter China for business purposes, there will be no difference in the visa application procedures. Same as the old F visa, the M visa will require an invitation letter from a Chinese business partner.
2.  F visa will in the future only be issued to foreigners who visit China for exchange activities or visits for non-business purpose. Same as under the current regulations, there is still no visa type that expressly covers internships. Whether an intern who wants to do an internship in China should apply for a M visa for commercial purposes or a F visa for non-commercial purposes still needs to be clarified by the Chinese authorities.
3. Z visas issued to foreigners working in China remain unchanged. A residence permit for work purposes can be obtained by a foreigner with a Z visa. Family members of Z visa holders will, however, not be issued with a Z visa anymore, but will now only be able to obtain an S1 or S2 visa, depending on the duration of their stay.
4. A new type of R visa is created for foreign professionals who are highly skilled or whose skills are urgently needed in China. Foreigners obtaining the R visa will enjoy benefits upon entering and exiting the country. This constitutes a considerable progress of the PRC government in implementing its talent introduction strategy. Unfortunately the definition of what constitutes professionals with high skills or skills in short supply, still needs further clarification by the Chinese government.

Change of Residence Categories

1. When a visa is issued to a foreigner, a note on the visa will state whether the foreigner shall obtain a residence permit or not. In the past, there was only one type of residence permit for foreigners staying in China. Under the new Regulations, the residence permits are divided into five categories including residence permits for work purposes, residence permits for study, residence permits for journalists, residence permits for family reunions and residence permits for private matters.
2. A residence permit for work purposes will be issued to foreigners who work in China. The validity period of such residence permit can be from 90 days up to 5 years. Chinese entities or individuals are not allowed to hire foreigners without such a residence permit.
3. Family members holding an S1 visa will be issued with a residence permit for private matters. The validity period of such residence permit can be from 180 days up to 5 years.
4. Students who study in China by obtaining the X1 visa will be issued with a residence permit for study. Students are not permitted to work, unless they obtain the permission of the school and a respective note recorded by the Chinese authority regarding the working place and the working period. Any student in non-compliance will be regarded as illegally working in China and both the student and the entity which hires the student can be subject to penalties and other legal liabilities in accordance with the PRC Exit-Entry Administration Law.

Reporting obligations

Under the new Regulations, the Chinese employer shall report to the competent entry and exit administrative authority if a foreign employee leaves the company, changes his or her work location, violates the exit-entry administrative regulations, dies or disappears. However currently no legal liability is provided for a breach of any reporting obligation.

Further, the new Regulations require foreigners to report to the competent entry and exit administrative authority if the purpose of their stay has changed. An application for a change in visa category and residence permit needs to be filed within 10 days. If this requirement is not complied with timely and after a public announcement has been issued by the relevant authority, the visa and residence permit of the foreigner can be declared void straight away.

Overall, the Regulations provide more clarity regarding the requirements of different visa and residence types. In the future, the visa and/or residence permit requirements will be more specific. This will lead to a greater degree of control of the Chinese government over the movement of foreigners working in China.

For the time being, we expect visas which were issued until September 1, 2013 will still be valid until the expiring date. However, after September 1, 2013, the new policy guidelines will be adopted. We suggest that foreign invested enterprises inform their headquarters about these developments and make necessary adjustments, especially if they hire foreigners.