Beijing Details Foreigners’ Mandatory Social Insurance Participation

Posted on by

Jan. 11 – Following the promulgation of a national decree ordering foreign employees’ mandatory participation in China’s social insurance system, Beijing recently issued its own implementation details in a bid to strengthen the enforcement of the new policy.

On December 20, 2011, the Beijing Social Insurance Fund Management Center (BSIFMC) released the “Circular on Issues Concerning the Improvement of Participation in Social Insurance by Foreigners Employed in Beijing (the new Circular).” The document details issues related to foreigners’ social insurance registration, backdated premium payments, charges of late fees, and the participation of foreigners from those countries that have signed a bilateral or multilateral agreement on social insurance with China.

Foreigners’ social insurance registration and backdated premium payments
According to Circular jingshebaofa [2011] No. 55 released by the BSIFMC earlier, employers in Beijing shall undertake social insurance registration for its foreign employees within 30 days after the foreign employee obtains a work permit.

While Circular No. 55 specifies that registration will be accepted between the dates of the 5th and 25th of every month, the new Circular stipulates that the handling period for foreigners’ participation in social insurance in December 2011 shall be extended to December 31 by all social insurance handling agencies/institutions.

In accordance with Circular No. 55, an employer shall provide the following documentation (both original and photocopy) for its foreign employees’ social insurance registration:

  • Passport of the employee
  • Work permit
  • Completed Beijing Social Insurance Individual Information Registration Form (three copies with company stamp)
  • Completed Beijing Social Insurance Participants Increase Form (two copies with company stamp)
  • Two passport photos
  • Other documentation as required

In cases where the employer encounters actual difficulty in providing all the original copies, registration may still be accepted if photocopies of the complete set of documentation can be provided, the new Circular added.

In addition, a foreigner must register with the same English name used on his/her valid passport.

A foreigner that qualifies for participation in social insurance and has been employed in Beijing before October 31, 2011 shall make a backdated premium payment for the period from October to December of 2011. A foreigner that qualifies for participation in social insurance and has been employed in Beijing after November 1, 2011 shall make a backdated premium payment from the month in which the foreigner is employed to the month immediately before the one in which the foreigner’s social insurance registration is made.

A foreigner that has already gone through social insurance registration procedures before January 1, 2012 shall not be charged late fees when making backdated premium payments, whereas a foreigner that goes through social insurance registration procedures after January 1, 2012 shall be charged late fees in accordance with the “Circular on Issues Concerning Late Fee Charges on Employers’ Overdue Social Insurance Payment (jingshebaofa [2011] No.39).”

Foreigners from countries with bilateral/multilateral treaties with China
In cases where a foreigner boasts the nationality of a country that has signed a bilateral or multilateral agreement on social insurance with China, his/her participation in social insurance shall be practiced as follows:

  • The foreigner shall make their social insurance registration within 30 days after he/she obtains the work permit, and will make regular premium payments
  • Where the foreigner can provide evidence of his/her social insurance participation in the contracting state within three months after he/she obtains the work permit, he/she can be released from the obligation to pay premiums within the prescribed time limit for the prescribed types of insurance, in accordance with the agreement; if the foreigner has made social insurance registration and premium payments, the premiums shall be refunded
  • Where the foreigner provides evidence of his/her social insurance participation in the contracting state three months after he/she obtains the work permit, he/she can be released from the obligation to pay premiums within the prescribed period for the prescribed types of insurance from the month in which the agreement is provided; the premiums that have already been paid shall not be refunded
  • Where the foreigner fails to provide evidence of his/her social insurance participation in the contracting state three months after he/she obtains the work permit, both premiums and corresponding late fees shall be collected according to related provisions
  • The foreigner shall make premium payments for insurance types that are not included in the agreement and those that are included but have exceeded the time limit prescribed in the agreement

The new Circular took effect on December 20, 2011.

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China, Hong Kong, India, Singapore and Vietnam. For further information and clarification on China’s Social Insurance Law, please email china@dezshira.com.

Related Reading

China’s Social Insurance Law
A summary of some of the key points in the newly implemented Social Insurance Law, which covers a great deal more than just incorporating foreigners into the system. We explain the costs and benefits of participation by foreign employees to both companies and individuals as well as take a look at some of the trends across the country relating to the implementation of the law.

Human Resources in China (Second Edition)
Specifically designed to cover the most important issues relating to managing a Chinese workforce, this guide details the HR issues that both local managers in China and investors looking to establish a presence on the mainland should be aware about.

Beijing City Guide
Asia Briefing’s City Guide on Beijing is designed for the investor seeking a general overview on China’s political and cultural heart. Also one of the country’s most scenic and historical locations, Beijing’s numerous landmarks such as the Forbidden City and proximity to the Great Wall also make the city a wonderful place to live, work, or visit.

Social Insurance Law Implementation Differences across China

Foreigner Participation in China’s Social Insurance System Now Mandatory

Dalian Re-instates Caps on Social Insurance Contributions

5 Responses

  • Eddy says:

    Thanks. Registration and making this clear to readers is one, however, I’d like to know more about the exact payment details/costs to employer/employee.
    In a previous article you mentioned that if the foreigner leaves China, he could refund the put-in amounts! Well, what’s the use of it all since 99% will eventually return home!?
    In my opinion it’s yet another way of harassing foreign investors/ employers in order to hire local Chinese iso foreigners! Makes it even more easy to steel your business / IPR as well…

  • @Eddy – I think there are many who share your opinion. Thanks – Chris

  • @Eddy – much of the payment details are still unclear, and we will promptly post updates here on China Briefing as they come out. For likely employer/employee costs, you can check out our October issue of China Briefing Magazine on the subject:

    http://www.asiabriefingmedia.com/store/index.php?main_page=product_info&cPath=97_94_99&products_id=544

    Regarding your other point, it should be noted that while foreign employees are theoretically allowed to reclaim their pension contributions if they leave China, their employers do not have the same luxury.

  • Eddy says:

    Thanks for the replies! My actual point is that there in my opinion zero benefits for both employer and employee in this.
    I am pretty sure that we all really don’t expect any expat to benefit from some domestic unemployment or pension fund, or do we?
    So I think the underground reason for Chinese authorities is to increase costs for foreign employees in order to get as many as possible locals in key and the top positions; at least that’s what I suspect.
    Wish you all the very Best for the Chinese New Year of the dragon!
    Eddy

  • What about hiring Chinese Nationals as independent contractors. Laowu Guanxi. Do we as an employer still need to pay the 5 mandatory social insurances for contractors? Would we use a services firm to do that?

    Thank you?

    David

Leave a Reply

Asia Briefing Bookstore Catalogue 2013
Scroll to top