China Regulatory Brief: Relaxed Requirements for Obtaining Permanent Residency in China

Posted by Reading Time: 4 minutes
China Releases Regulations on Approval and Filing of Investment Project

On June 12, China’s National Development and Reform Commission (NDRC) released the “Administrative Regulations on Approval and Filing of Investment Project,” which is currently open to public commentary. According to the Regulations, enterprises seeking to invest in projects that are subject to the government approval are required to submit an application report, which includes detailed information of the company, the introduction of the project, as well as an analysis of resources use and the influence over the society. China will implement an online supervision platform, gradually allowing enterprises to complete the approval and filing procedures online. In principle, the government shall decide whether to grant the approval within 20 working days following the date of application submission. 

China Prohibits Tax Officials from the Interference in the Operation of Tax Agencies

On May 21, China’s State Administration of Taxation (SAT) released the Circular 75 aiming to limit the interference of tax officials in the operation of tax agencies (including accounting firms, registered tax agents, tax consultancies and law firms etc.,). The Circular explicitly prohibits tax officials from being engaged in five business activities such as forcing taxpayers to accept tax services from certain tax agencies. Further, the Circular put new restrictions on tax officials’ spouses and children holding jobs in tax agencies. Previously, some tax officials were known to partner with local accounting firms to reap financial gains. For example, a tax official may become a shareholder in a local CPA firm or put himself or his family members on its payroll, and uses his administrative power in the government to channel business into the firm. Tax officials are now required to file annual disclosure forms to indicate compliance.

Related Link IconRELATED: China Releases Final Draft of New Visa and Residence Permit Regulations for Foreigners

Requirements Loosened for Foreigners Obtaining Permanent Residency in China

On June 8, China’s Ministry of Public Security announced its decision to loosen the requirements for foreigners to obtain the permanent residence permit in China. Specifically, foreigners working in seven types of enterprises and public institutions, including national laboratory, foreign-invested R&D centers will be eligible to apply for permanent residence in China. Previously, only foreigners who make “outstanding contributions” to China will be granted permanent residence. China has been stepping up its effort to attract talented foreign individuals to work and reside in the country. The recent announcement has paved the way to further relax the requirements on permanent residency.

China Clarifies Pre-tax Deduction Policies for Employee’s Education Expenditure

On June 9, the Ministry of Finance and SAT jointly released a notice which clarifies the pre-tax deduction policies for employee’s education expenditure of high and new technology enterprises. “High and new technology enterprises” refers to enterprises engaged in the provision of science and technology services and have already obtained high and new-technology enterprise certification from the government. Under the new policy, certain enterprises will be able to deduct their employees’ education expenditures before tax, provided that the expenditure accounts for less than eight percent of the employee’s wages. The portion of expenditure that exceeds eight percent of the employee’s wages may be deducted in the subsequent taxation years. The Notice is effective retroactively from January 1, 2015.


Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.


Related Reading

Tax, Accounting, and Audit in China 2015
This edition of Tax, Accounting, and Audit in China, updated for 2015, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in China, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who must navigate the complex tax and accounting landscape in China in order to effectively manage and strategically plan their China operations.

Human Resources and Payroll in China 2015
This edition of Human Resources and Payroll in China, updated for 2015, provides a firm understanding of China’s laws and regulations related to human resources and payroll management – essential information for foreign investors looking to establish or already running a foreign-invested entity in China, local managers, and HR professionals needing to explain complex points of China’s labor policies.


Employing Foreign Nationals in China
In this issue of China Briefing, we have set out to produce a guide to employing foreign nationals in China, from the initial step of applying for work visas, to more advanced subjects such as determining IIT liability and optimizing employee income packages for tax efficiency. Lastly, recognizing that few foreigners immigrate to China on a permanent basis, we provide an overview of methods for remitting RMB abroad.