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China Social Insurance Exemption for Foreigners

Updated:2018-6-13 10:40:02    Source:www.tannet-group.comViews:184

China social insurance exemption for foreigners can be a valuable asset for employers and foreign employees to save on unnecessary costs. However, many companies hiring eligible employees are not aware of the benefits available to them. China’s social security system consists of five different types of insurance, plus one mandatory housing fund. The five “insurances” are pension, medical, work-related injury, unemployment, and maternity insurances, while housing fund contributions are included because the costs come from both the employer and the employee.

Social Insurance Premiums in China
According to Chinese labor law, any foreigner employed by a legally registered entity in China, or any foreigner dispatched to a registered branch or representative office of a foreign company, must participate in basic pension insurance for employees, basic medical insurance for employees, work injury insurance, unemployment insurance and maternity insurance.

Social insurance is managed at a regional level, a range of inconsistencies exists amongst cities. As a result, most major cities have implemented their respective requirements for foreign employees. For example, in cities such as Beijing, Tianjin, Shenzhen, and Nanjing, social insurance payments are compulsory for foreign employees, who are treated in the same way as domestic workers. Contrarily, Shanghai does not currently require foreign employees to contribute towards social insurance.

Applicable Countries/Regions
Employees from countries that have agreements with China are eligible for social insurance exemptions. To date, eight such agreements have been implemented between China, which include Germany, Korea, Denmark, Canada, Finland, Switzerland, the Netherlands, and Spain.

All existing agreements define the groups of employees eligible for exemption, and lay out the categories of social insurance for which employees are exempt from paying. In turn, Chinese employees sent to the participating country will also be exempt from making the relevant social insurance contributions there.

Application Process for Premium Exemptions
Exemption does not apply automatically, and companies with foreign employees are required to apply to related bureaus for exemption. The process of applying for insurance premium exemptions varies across regions, so do the time limit of the exemption period.

The entity that employs the foreign employee in China must submit original certification of insurance issued by a relevant entity in the country of origin to the local Chinese social insurance bureau. This will then be verified and a copy will be held on record. Following verification of this documentation, and possible further verification and certification, the employee in question will be exempt from the relevant social insurance payments.

Contact Us
If you have further inquiries, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website, or calling Shenzhen hotline at 86-755-82143422 or Hong Kong hotline at 852-27826888, or emailing to You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020,Dongmen Rd South, Luohu, Shenzhen, China.

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