Attn. Manufacturers! Work Visas for Foreign Staff in China Explained

Last time we took a look at how to handle compensation claims in China so that it’s a win-win for both parties involved, and this time around I’m going to explain the essentials behind work visas for foreign staff in China!

The following blog is based on excerpts from the whitepaper entitled “Foreign Manufacturer’s Ultimate Guide to Hiring, Training, Managing & Firing Staff in China” which can be downloaded in its entirety right here!

Employer-Employee Relationships: Foreign staff in China

Work visa

If you are a legitimate company (with a licensed operation in China) and have a legitimate need for foreign staff to be based on your China facilities, you should have no problem securing work visas for you international staff.

But you will run into problems if you do the following:

“sell” work visas to foreigners who aren’t actually working in your business
Under declare the China salaries of your foreign staff to avoid tax.
Have staff working under a tourist or business visa rather than work visa.

The first two items are obvious “no-no’s” and should be avoided, but what if you have international staff in your office for short term project work? Here are some guidelines:

Unless they are friends and family visiting China on non-business related activities, there is no reason to have foreigners with tourist visas in your office for more than a few hours.

Some foreign employers think that the China visa is the responsibility of the foreign staff and they don’t ask their staff for proof of work visa. Trust me, if you have foreign staff working in your office without visas, you both will have a lot of trouble once discovered. Your company may be put on a blacklist and you will be unable to hire any legit foreign staff for years to come.

You are crazy to give anybody on a tourist visa any trappings of employment, such as but not limited to:

Business cards with your China address
A work station in your office
Employment contract
Local currency compensation

And don’t think you can hide the visa status of your foreign staff from co-workers and authorities. I know plenty of cases of disgruntled local staff running to the labor bureau to turn the foreign employer in.

Overseas clients and business associates are welcome to come to China. Every year it gets easier and easier to arrange a business visa. If you are from the USA, you can get a 10 year multi-entry visa and come and go as you please, staying for fairly long trips if needed. But if you stay longer than 90 days in China, that’s considered working here and you should get a work visa.

About once per year, at a random time, professional and friendly (unless they were informed of a violation in advance) representatives from the local police unit or industrial affairs office will stop by your office to take a look around. They are looking for two things:

Are the foreigners with registered work visas actually working at this location?
Are there any foreigners without work visa working at this location?

Additional concerns about Work Visas for Foreign Staff in China

The last thing you want is to be in compliance with the laws, but staff get nervous during the audit and say the wrong things causing unnecessary confusion. To avoid this, I recommend not only staying in compliance, but also having a plan to explain how you are in compliance if audited.

For example, there should be a representative (and a backup) in the office who represents the company when there is a visa audit. This representative, it may be the front desk receptionist or even a senior manager, who the representative is isn’t as important as what they do. They should keep a list of all foreign staff based in the facility, along with copies of the passports/visas. If staff with work visas are out of the office, the representative should be able to explain why. Telling the truth is fine. For example, Mike is on a business trip to Beijing, he’ll be back in 2 days.

If you have foreigners in the office who are not on work visas, the representative should be able to explain why. Once again, the truth is the best option. Explain that the person is from HQ doing training, or explain how it’s a customer. But if this person is sitting at “their desk” with Chinese business cards and a coffee mug with a year’s stains on it…you may have some explaining to do!

Arranging a work visa for foreign staff in China

Lack of transparency regarding work visas for foreign staff in China

There is no written rule made public that states how many foreign staff can be employed by one company at one time. But I am certain each local government has some kind of unwritten rule. For example, a business with X million RMB in revenue should have no more than Y foreigners. For every foreign staff there should be X times as many Chinese. If you cross this unwritten line, you will find it hard to get working visas for staff and unless you are friends with the officials, you will never know for sure why.

But as long as you follow these written regulations, you should have no problem arranging work visas for foreign staff in China:

Obviously you need to be a registered business in good standing to hire staff, foreign or local for that matter.
The staff you wish to hire from overseas must have at least 2 years of highly relevant work experience. You can’t easily hire a young person to be your marketing manager if he graduated with a teaching degree in the USA and has since then been based in China tutoring children!
The job can’t easily be filled by a local Chinese person. For example, I had some difficulties hiring American sales staff because the local authorities felt there were plenty of English speaking Chinese. But my Spanish speaking candidates for the S. American marketing manager job were warmly welcome!

Security of business secrets when hiring foreign staff

Foreign owners sometimes put too much trust into their foreign hires. Don’t foster an “us vs them” attitude around the office. Apply the same level of control over sensitive information with foreign staff as you would with local staff. That means signing NNN agreements and monitoring staff closely.

Culture Clash when hiring foreign staff

In the past 5 years the number of foreigners in China has grown exponentially. I no longer recruit from overseas because I can find goods staff right here in China. But I rarely hire anybody who has less than 2 years living experience in China because the risk of culture class is just too great. It’s a real drain on my business to train up a foreigner only to have them leave China because they don’t like the pollution or have trouble with the food. By year number 2, most people will know if they are making a China career or just passing through.

Speaking of culture, when selecting a point person to lead your team in China, don’t assume that Chinese language or even ethnicity equates to Chinese business understanding. I know of more than one major N. American company that has pulled junior staff out of departments like accounting and marketing and tapped them to be the point person on major sourcing projects simply because they were Chinese-American.

I know of countless exchange students from Asia who went to the US and EU to study English, history, and even music only to be plucked out of the universities to join a Western company as their sourcing team leader. I don’t know of one success story from all of those examples. Every time the project failed because the Chinese person assigned was hired because his or her only qualification was being Chinese or at least looking Chinese. In reality, an understanding of negotiation, logistics, and engineering and, especially, sourcing experience would be far more important criteria when selecting a sourcing project leader. Language and ethnicity should be far down the list of priority skill sets.

In addition, don’t assume that all ethnic Chinese, even those with business backgrounds, are automatically able to do business successfully in mainland China. I have seen numerous overseas Chinese (Asian Americans, Taiwanese, Singaporean, and especially Cantonese (Hong Kong) complicate the employee-employer relationship because their cultural baggage alienated members of the team.

I’m sure what I am about to say is not politely correct, but it seems that a lot of overseas Chinese have a superiority complex and look down on their cousins in the Mainland as being a bit backward and unsophisticated. On the other hand, a certain amount of up and coming mainland Chinese have an inferiority complex and may take issue with being “bossed around” by an overseas Chinese (especially those from HK and Taiwan) while they would look at the same directives coming from a European or American as just part of the job.

I would be crazy to say that the language and cultural understanding that an overseas Chinese brings to the table as a project manager is not of value. But I firmly believe that ethnicity alone is not the best criterion for selecting a project manager. Focus on the whole package when picking a team leader.

That concludes post no. 5 out of 8 in my ‘hiring in China’ series. Stay tuned for the next post in the series where we’ll take a look at what really happens during a labor dispute!