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IMPACT – HIGH (all affected)

Background:  The current foreign work employment system has two work permits for foreigners: the Alien Employment Permit (Z-visa) and the Foreign Expert Permit (R-visa). These work permits were issued by two different government entities, the common Z-visa used by most foreigners in China was issued by the Ministry of Human Resources and Social Security, whereas the much rarer R-visa was controlled by the State Administration of Foreign Experts Affairs (SAFEA). Both applications required paper and were highly bureaucratic.

What is to change? In order to streamline and standardize the process the SAFEA government entity has announced in September 2016 that both existing work permits, the current Z and R-visas will be merged into one, starting in April 2017. However in certain regions such as Shanghai, Beijing, Guangdong and various other cities the process will start in Nov 1^st 2016 as part of the government pilot program.

The new application process and exact change is currently not yet 100% clarified. What we do know is:

-       The current passbook system that is your work permit will most likely become an ID card, with a unique number assigned to you.

-       The newapplication process will be most likely online based, instead of paper based.

-       CVs and application letters will be forgone in the future.

-       A new three tiered classification system, classifying different foreign workers either as A,B or C will be implemented.

According to the China Organization Personnel Newspaper, which is published under the Ministry of Human Resources and Social Services, the tier system can be described as:

“Class A will include top professional, innovative and creative talent, Class B will include other professional who fit with China’s economic development plans and could fill short-term gaps, especially in management and technical areas, with limits in international trade, sports, culture and education. Class C will include unskilled service industry workers, which should be strictly limited.”

How you are classified into the tier system is not yet revealed, the current criteria that was revealed is that the education background, salary level, age, time spent working in China and Chinese language skills will influence on how many points you will be allocated. Extra points may be given to foreign workers applying to work in less developed areas as well.

How will it affect you? Every new application, including renewals for a work permit will be affected, particularly in Shanghai, Beijing and Guangzhou starting Oct 1st, with nationwide changes next year in April 2017. Every new application will undergo this new process, however exact details on how each person is classified has yet to emerge.

·         Implementation time frame: Oct 2016-April 2017 (region based).

·         Visas/permits affected: Z & R visa work permits.

·         Who is affected: Everyone residing in Shanghai Beijing and Guangzhou and a few other regions, with the new system rolling out nationwide in April 2017.

·         Impact on processing times: Unknown as of now. Potentially faster once it is streamlined as several criteria have been dropped and the application is now online.

·         Business impact: Various service industry and certain industries may find it harder or even impossible to reapply for their work permits. Most other industries and expatriates should not be affected by this change.

·         Next steps: Please contact us immediately if you think you are affected, to discuss what possible options you may have. As the impact of this change is yet to be seen, possible solutions must be applied on a case by case basis.

This alert has been provided by the Maxview Group in China. For additional information, please contact kiki.wang@maxviewrealty.com