New Practices in Permanent Residence and Work Permit Application in China

According to the ministry of public security of China, starting from August 1, 2019, certain former pilot immigration policies have been implemented nationwide in China. The new policies will significantly loosen the restriction for foreigners to obtain a permanent residence in China or a work-type residence permit with a longer valid period. For foreigners who would like to obtain a permanent residence in China, following four criteria should be fulfilled. The applicant has:

• worked for four consecutive year;
• lived in China for no less than six months a year;
• an annual salary of no less than six times the local average salary of the place where they are located in the preceding year; and
• paid annual individual income tax of more than 20 per cent of their annual salary.

Foreigners who have applied for an over one-year work-type residence permit for two consecutive times without any violation of laws and regulations may apply for a work-type residence permit with a 5-year validity at most for the third time.

A wide range of foreigners may fall into the above two groups, as the criteria are commonly accessible in practice. At least, they do not need to go through a complicated application procedure only for the extension of a resident permit every year, as long as they have a relatively stable work in China.

Applicants who want to have a permanent residence may need to pay attention to the documentation requirements when making the application, especially for the tax payment standard.

Recently, in some work permit application cases, some immigration authorities have requested a screenshot of the official tax filing system in the local tax authority, to show the income type, taxation bases and tax amounts of the applicant together with his/her personal information on the same page, in addition to the traditional tax clearance certificates as the supporting documents. Because on the tax clearance certificates no taxation bases are indicated and it is difficult to identify the general tax rate of the applicant, as we can assume.

However, such practice has met obstacles from some local tax authorities, since the tax clearance certificate is the only official certification to be issued by the tax authority for tax payments. It could be easily solved if the two authorities, the immigration authority and tax authority, could share information, instead of requesting the applicants to pass on screenshots manually, which is neither efficient nor practical. With the implementation of the new policies, such practical obstacle may occur more often than before. It would be expected that the authorities could make progress in the solution shortly.

For foreigners who would like to apply for a long-term 5-year work-type residence permit, it is required in practice that the validity of the work-type residence permit in application should be covered by a valid employment contract. As far as we know, most foreigners who firstly work in China would enter into an employment contract with a 3-year period. So it could happen that after they apply for a 1-year work-type residence permit for twice, only 1-year validity period is left in their employment contract. Under such circumstance, they may still obtain a 1-year resident permit even if for the third time. Therefore if they plan a long-term employment in China and would like to benefit from the new policies directly, a timely discussion with their Chinese employer for an advanced extension of their employment contract might be necessary.

It is imaginable that there will be some uncertainties in terms of the implementation of the new policies. In view of the large groups of foreigners covered by the new policies, we could expect the authorities concerned to come up with feasible solutions in a timely manner, and we will keep a close eye on the progress.