Expats and their particularities

Transcription

1 Expats and their particularities

2 Contents Visa Social Security Taxes Pros & Cons 2

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4 Visa Tourist Student Business Visa Working Permit 4

5 Working Permit 4 copies of the company business license (take original for show) + a copy of Articles of association Copy of Certificate of Approval (if registered as a foreign invested enterprise) or a copy of Social Insurance Registration certificate (if registered as a Chinese enterprise original certificate is required) Copy of Foreign enterprise registration certificate in PSB (Public security Bureau) Application letter written by the company explaining why they employ the foreigner 5

6 Working Permit Letter of employment intent written by the company, explaining what is the foreigner s duties in the company,what is the title, how much is the salary and how long they would like to employ him/her Decision of the board of directors (If employing a Vice General Manager or General Manager) Copy of the labor contract Resume of the foreigner (needs to be translated to Chinese if in a different language) Original Bachelor (or above) degree certificate (needs to be translated into Chinese) 2-year or above work experience reference letter by the company you ever worked for Original passport 6 Passport photos with white or blue background 6

7 Working Permit Health check reports in duplicate (original) Copy of Temporary Form of Residence Permit (original - just for show) Application letter to get a visa notification letter Application Form for Foreigner s Employment in China Employment Registration Form of Foreign Employees in China Visa/residence permit application form the foreigner needs to sign Notes: Item 1, 2, 3, 4, 5, 6, 7 and Item 15, 16, 17, 18 all need to be chopped with company seal. 7

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9 Price Visa It depends Political reasons might alter the price. In occasions price has tripled. Price depends on the country people is coming from. Intermediary Agency, price not inferior to 4000 RMB. 9

10 Validity Visa You can request 2 periods of time: 6 months 1 year Visa MUST be Renewed every year. 10

11 Visa Agencies Several Agencies Just need to present all documents they require They take care of fulfill and present documents to Authorities. They usually speak English. 11

12 Problems Process at least 1 month Convenient to do it in advance so that not having surprises. Health Check must be done in an authorized center in China. 640 RMB Need one morning Results take 3 days to be delivered and you can request to be sent to your address paying a fee. Documents have to bewritten in Chinese Official Translation. 12

13 Problems Not only have to pay the visa in your country but in China too. Have to Register at District Police Station during the following 30 days after arrival. Usually they say during the first 24hrs. Requires certain documents that only company can provide. Depending of job position, visa might be authorized or denied. Reticency of Gvt to provide more chances to Chinese students. 13

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15 China Social Security System Includes: SS, Social Welfare, Pensions, Special Attention OIT stipulates 9 social benefits : Medical Assistance, Sickness, Unemployment, Retirement Pensions, Labor Disability, Family Benefit, Maternity, Disability, Widow s Benefit. Minimum required for a SS system. 15

16 China Social Security System October 28, 2010, the Seventeenth Meeting of the Standing Committee of the Eleventh National People's Congress adopted Social Insurance Law of the PRC come into forcejuly 1, Art. 97.Important measures for foreigners working in china covered by SS. 16

17 Previsional Measures for Foreigners Participation in China Social Security Foreigner employed in China Meaning: Person who has any of these certificates: Employment Permit for Foreigners Foreign Experts Certificate Permit for Permanent Foreign Journalists, etc. Permanent Residence Permit for Foreigners legally working in China 17

18 Previsional Measures for Foreigners Participation in China Social Security A Foreigner assigned to Representative Office or Branch in China will participate in: Basic Pension Insurance for employees Basic Medical Insurance Work Accident Insurance Unemployment and Maternity Insurance Premiums will be paid by company and by employee 18

19 Previsional Measures for Foreigners Participation in China Social Security Company will register in SS to employee during the 30 days after obtaining corresponding working permits for foreigners in China. For expats assigned in branchs, Local entity is compelled to make the registration. In case of breaching the rules, there will take measures such as penalties o delayed-payment interests. 19

20 Previsional Measures for Foreigners Participation in China Social Security The Foreigner leaving the country, his contributions will be retained until he comes back. It will be cumulative to the new situation. Under written request, the sum will be paid to the foreigner. Foreigners living abroad but paying SS in China, requires Affidavit probe of survival expedited by Chinese Embassy. Annual. The balance in the SS account can be inherited. 20

21 Social Security - Recommendations Hire a private Insurance. New regulation cover only basics experts declared that it will mean higher costs for companies private Insurance. Minimum Basic Cost USD. A travel Insurance, no applicable to expats. 21

22 HR Calculation Social Security Social insurance contribution rates (% of average monthly salary of previous year) Beijing Pension Medical Unemployment Maternity Work-related injury Employer 20% 9% 1% 0.8% 0.2%-2% Employee 8% 2% 0.2% 0 0 Shanghai Employer 22% 12% 1,7% 0.8% 0.5% Employee 8% 2% 1%

23 HR Calculation Social Security Average Monthly Salary ( AMS ) in Beijing en 2012 was RMB4672 & RMB4900 in Shanghai(Approx). The base to contribute to Social Security varies 0,6-3 times previous year s AMS. Most WFOE expend the maximum 3 times previous year AMS ( RMB14,016 en Beijing y RMB12,993 en Shanghai en 2012). 23

24 Example: Beijing: Mr. Dave Monthly salary is 14,000 Mr. Dave s Contribution to SS Unemployment Unemployment Medical 1, Employer: 4, per month Pension 2, Pension 1, Employee: 1, per month Medical Maternity Work-related injury Work-related injury 0 Maternity 0 24

25 Calculation HR Social Security Mr. David s salary after social insurance contribution is RMB12, Tax payable for Mr. David is RMB1, (12, ,500) x 25% - 1,005 Salary after social insurance contribution and tax is RMB11,

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27 Taxes First 3, 500 RMB of income free of taxes Authorities have the power to increase salaries declared for IIT Present real probe of income in other places. China IIT Tax rate China quite high comparing with other countries in the world. Overseas Incomes might beexent. 27

28 Taxes Also might beexent: Basic Capital Insurance Basic Medical Insurance regulated by Gvt. Unemployment Insurance Housing funds paid by employer to individual and by himself. 28

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30 Individual Income Tax for expatriates Under new IIT regulations (Statutory deduction of 3,500) Grade Monthly taxable income Tax rate(%) Quick deduction 1 Less than 1, ,500-4, ,500-9, ,000-35, , ,000-55, , ,000-80, ,505 7 Excess of 80, ,505 30

31 Individual Income Tax for expatriates Monthly salary (after deduction of social insurances) in IIT under old IIT Law in IIT under new IIT Law in 3, Variance in 4, , ,500 1,725 1, ,000 2,825 2, ,000 3,625 3, ,500 7,750 7, ,000 9, ,000 15,675 16, ,000 22,825 23, ,000 33,225 34,420 1,195

32 Individual Income Tax for expatriates Period of presence <90 or 183 days 90 or 183 days but<365 days Tax resident status Nonresident Nonresident PRC Source Income Paid inside PRC (borne by PRC) Paid outside PRC Non-PRC Source Income Paid inside PRC (borne by PRC) 1 ~5years Resident Paid outside PRC Over 5 years Resident 32

33 Individual Income Tax for expatriates Deductible Benefits before IIT: Benefits in cash are considered taxable. Payment of the company of some expenses on behalf of the employee (apartment), non taxable and deductible for the company. Housing Benefits, Diets, Moving, etc (refundable in base) Reasonable Company Expenses, in and out of China. Reasonable returning home expenses (2 per yr), family education & language courses. 33

34 Repercussion in expats and WFOEs Employer Contribution Portion Employee Contribution Portion Borne by employer Borne by employee Borne by employer Borne by employee Taxable Deductible CIT Deductible No implication IIT No implication Nondeductible Nondeductible No implication 34

35 Repercussion in expats and WFOEs If IIT borned (or partialy) by employer, in gross salary calculation and IIT liabilities, social insurances have to be taken into consideration. It s been considered: Repercussions toexpats: - Representatives in ROs - Employees and freelance in WFOE or branches of foreign companies - Expats experts with Z-visa (no applicable to business visa F-visa) How to make contributions and enjoy of benefits International Agreement about Social Security (Germany: Retirement Pension, unemployment; South Korea: Retirement Pension) 35

36 Use of SS- Pension for employee Pension fund repatriation Condition of use Monthly pension fund payments from public account (1) retirement requirements stipulated by the State are satisfied and the relevant formalities are completed; and (2) basic pension insurance premiums have been paid pursuant to the provisions for an aggregate term of 15 years. The payment is determined based on the average monthly wage of employees in the city in the preceding year and the indexed average monthly premium-based wage of the employee. Monthly pension fund payments from private account It shall be the amount deposited in the individual account divided by the number of payout months stipulated by the State. 36

37 Use of SS- Medical Insurance by Employee Basic medical insurance cannot be used to cover the following contingencies: Incurred expenses made in a center not designed by Medical Insurance (excludes emergency treatments); Traffic Accident Injuries, Medical accident or another accident liability; Injuries caused by use of Drugs, Fights or Illegal Behavior; Suicide or Alcoholism Injuries; Any treatment outside Mainland China. 37

38 Use of SS- Unemployment Unemployed workers are eligible to receive unemployment insurance benefits, if they meet all of the following criteria: (1) they have participated in the unemployment insurance scheme, and both the employer and individual have made unemployment insurance contributions for one full year; (2) they are not willingly unemployed; and (3) they have completed unemployment registrations and are willing to seek employment. Period of contribution have been made How long unemployment insurance benefits could be applied for Period of contribution have been made The standard payment of unemployment insurance benefits (BJ, 2010) 1-2 years 3 months 1-5 years 782/month 2-3 years 6 months 5-10 years 809/month 3-4 years 9 months years 836/month 4-5 years 12 months years 863/month Exceed 5 years 1 more year => 1 more month but not exceeding 24 months Exceed 20 years 891/month 38

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40 Expats: What s an Expat? An expatriate is, by definition, a person going to temporarily live and work abroad, be it to boost their own career or to join their high-powered, hard-working partner. Some may just want a change of scenery and new wind in their sails. 40

41 Source: Youtube.com 41

42 Pros & Cons of Living in China Pros Living cost cheap, in some aspects New culture Learn Chinese New Activities Learn to face new challenges 42

43 Iceberg Model 43

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46 New Activities 46

47 New Challenges - Face Jobs 47

48 Source: Youtube.com 48

49 Living in China Source: Youtube.com 49

50 Cons Pros & Cons of living in China Family Upheaval Communication Problems Cultural Shock Burocracy Dependance Pollution 50

51 Source: Youtube.com 51

52 Cultural Shock 52

53 Pollution Source: Youtube.com 53

54 Thanks! 54