Chinese Government Publishes Draft Rules On The Administration Of Foreigners’ Permanent Residence.

Legal News & Analysis - Asia Pacific - China - Labour & Employment - Regulatory & Compliance

31 March, 2020

 

On 27 February 2020, China’s Ministry of Justice published the draft Regulations of the People's Republic of China on the Administration of Permanent Residence of Foreigners (Draft). This move shows that the Chinese government has resumed its legislative process for the amendment of permanent residence (PR Status) rules since its last effort made in 2016.

 

The Measures for the Administration on Examination and Approval of Foreigners’ Permanent Residence in China (Current Measures), which became effective in 2004[1], is the current nationwide regulation governing the administration of PR Status. The Measures on the Relevant Benefits for Foreigners with Permanent Residence Permit in China, which came into force in 2012, is currently the major national legislation regulating the entitlements of PR Status holders. Over the years, the PR Status system as governed by the foregoing enactments and other local rules, has revealed multiple problems. For example, the Chinese authorities realised that the application requirements relating to PR Status are not properly standardised, eligibility for application has remained very stringent, and the entitlements of PR Status holders have not been fully implemented[2]. Against such background, the Draft was released.    

 

Since its release, the Draft has drawn much attention from expats living in China and from ordinary Chinese citizens. The main reason appears to be that under the proposed improved PR Status system, the eligibility requirements for PR Status application have been relaxed, though only to a limited degree. We now summarise the new eligibility requirements as follows:   

 

 No. Application category   Summary of Draft provisions  Remarks
1.

Foreigners (Foreigners) with outstanding contributions 

Foreigners who have contributed outstandingly towards China’s economic and social development (including development in science, technology, education, culture, health, sports, public welfare, Sino-foreign friendly exchanges, etc.), may apply for the PR Status after having been recommended by local governments at the provincial level.

Under a similar category in the Current Measures, the relevant expression is: Foreigners having “made material and outstanding contributions to China” may apply for the PR Status, if they also satisfy some routine requirements such as being healthy and with no criminal record. 

2. 

Foreign talents introduced into China  

Foreigners who will be introduced into China due to the need of China’s economic and social development may apply for the PR Status. Such Foreigners include: (1) urgently-needed talents; (2) academic and scientific research personnel; (3) senior business operation and management personnel, or senior professional and technical personnel; and (4) professional talents.

The Draft also provides that for each type of talents, they must meet the respective specific qualification requirements (such as scientific research level and industries engaged). Also, applicants must obtain recommendation from either the Chinese authorities or qualified individuals. Further talent identification standards will be made based on consultation with relevant authorities.  Under a similar category in the Current Measures, the relevant expression is: Foreigners who are “specially needed by China” may apply for the PR Status, if they could also satisfy routine requirements such as being healthy and with no criminal records.

3. 

Foreign talents introduced into China 

Foreigners who will be introduced into China due to the need of China’s economic and social development may apply for the PR Status. Such Foreigners include: (1) urgently-needed talents; (2) academic and scientific research personnel; (3) senior business operation and management personnel, or senior professional and technical personnel; and (4) professional talents.

The Draft also provides that for each type of talents, they must meet the respective specific qualification requirements (such as scientific research level and industries engaged). Also, applicants must obtain recommendation from either the Chinese authorities or qualified individuals. Further talent identification standards will be made based on consultation with relevant authorities.  

Under a similar category in the Current Measures, the relevant expression is: Foreigners who are “specially needed by China” may apply for the PR Status, if they could also satisfy routine requirements such as being healthy and with no criminal records.

4. 

Foreigners working in China

For Foreigners working in China who have maintained good tax and credit records, they may apply for the PR Status if they can also satisfy the requirements (as the case may be) in relation to education background, industry and regions worked in, the duration they have been working and staying in China, and the amount of salary earned per year, etc. For example, for a doctorate degree holder, in addition to having good tax and credit records, he/she is eligible to apply for the PR Status if he/she has been working in China for at least three years and during the period has physically stayed in China for no less than one year.  

The Draft also stipulates that the salary income requirement set out in the Draft is merely a minimum standard. Specific local standards (being no less than the minimum standard) will be made based on consultation with governments at the provincial level.

There is a similar category in the Current Measures. However, the scope of eligibility under that category is narrower. That is to say, only Foreigners employed by particular entities (e.g., high-tech companies) working in specific job positions (e.g. general managers) or having specific academic titles (e.g., professors), may apply for the PR Status if the other requirements such as the duration the Foreigner has stayed in China, and the amount of tax he/she has paid to the Chinese government, etc., are also satisfied.

5. 

Foreigners making investment in China

For Foreigners investing in China in their personal capacity, or investing through an investment vehicle in which that Foreigner is the controlling shareholder, after satisfying some general requirements such as having stably invested in China for three consecutive years, and that they have maintained good tax and credit records, then such Foreigners may apply for the PR Status if they can also satisfy one or several other requirements (as the case may be) concerning (i) the invested regions and investment amount, (ii) the amount of tax paid, (iii) the number of Chinese citizens employed, (iv) the nature of the industry invested, and/or (v) the recommendation obtained from the authorities. For example, for a foreign investor doing business in China, besides meeting general requirements regarding the period of investment, tax and credit records, he/she may apply for the PR Status if the amount of investment made in China is equivalent to RMB 10,000,000.

The Current Measures stipulates that Foreigners who have stably invested in China for three consecutive years and have at the same time maintained a good tax record may apply for the PR Status, if they meet the paid-up share capital threshold (note: there are 3 different thresholds, i.e., US$500,000, US$1,000,000 and US$2,000,000, applicable respectively to investors in different regions and industries).

6. 

Foreigners who have family members living in China

For Foreigners who hope to come to China to live with their family members who are PR Status holders or Chinese citizens, they may apply for the PR Status if they can meet several requirements concerning (as the case may be) (i) the duration of their marriage, (ii) the duration that the applicants have stayed in China, (iii) the applicants’ age, the situation of their other relatives living outside China, (iv) the situation of their family members living in China, expected source of livelihood, and (v) place to live in China. For example, a minor under the age of 18 may apply for the PR Status, if his/her parent is already a PR Status holder.

For this category, the provisions in the Current Measures are the same as the provisions in the Draft.

7. 

Others

Foreigners may apply for the PR Status if there are other justifiable grounds to live permanently in China.

There is no similar category in the Current Measures.

 

In addition, the Draft has set out a number of general principles in respect of public services and entitlements which a PR Status holder may enjoy (including social integration services, and preferential treatments in relation to border exit and entrance; employment; professional qualification test-taking; housing fund; social insurance; children’s education, etc.). In comparison with the current rules under the Measures on the Relevant Benefits for Foreigners with PermanentResidence Permit in China, no substantial changes have been made by such general principles.

For further information, please contact:

 

Myles Seto, Partner, Deacons
myles.seto@deacons.com.hk

 

 

[1] 

Currently, some local governments (for example, Shanghai) also have their own local rules dealing with PR Status administration. Such local rules have detailed or supplemented the requirements in the Measures for the Administration of Examination and Approval of Foreigners’ Permanent Residence in China.

[2] 

See the Notice of General Office of the CPC Central Committee and General Office of the State Council on Issuing Opinions on Strengthening the Administration of Permanent Residence Services for Foreigners released on 18 February 2016.