The procedure for obtaining a visa to visit or work in the PRC has changed as of 1 July 2013. Audit, advisory and tax firm KPMG shared in the June 2013 China Tax Alert that the exposure draft of the ordinance on the administration of entry and exit of foreign individuals contains additional subcategories which will allow China to tighten and standardise processes and better define illegal employment behaviour.
F visas, previously issued to foreign citizens invited to the PRC for various reasons including giving lectures, taking part in sports events, conducting business and research and studying culture and education, will be split into F and M visas. Going forward, the F visas will cover only non-commercial activities whilst all business or trade visits will require M visas.
The R visa, or ‘new talent visa’, is a new addition to cover the visits of senior-level executives and foreign nationals with special skills that are in shortage in the PRC. Applications for an R visa will require recognition by the respective authority at both provincial level and above regarding the skills of the applicant and the need for them in the PRC. Two types of R visa will be issued, an R1 visa will be given to those staying for over 180 days, while an R2 visa will be offered for shorter stays, with the option of applying for an extension. As yet, the criteria for the R visa has not been specified, it is expected that in due course guidelines will be issued to assist authorities in identifying and approving eligible applicants.
The Z visa, the standard working visa, is to divide into two: Z1 for visits of over 90 days and a Z2 for shorter visits. For family members visiting Chinese nationals or foreigners with a Chinese Green Card, a new visa—Q—has been introduced. Q1 will allow for visits of over 180 days and Q2 for short-term stays.
The exposure draft clarified situations which constitute illegal employment under the new law:
- working in the PRC without a valid work permit and residence permit unless an exemption is obtained;
- carrying out employment duties outside the working jurisdiction stipulated by the work permit;
- carrying out employment duties for an employer other than the one specified in the work permit;
- foreign students working beyond the scope and hours permitted under the student visa; and,
- Z2 visa holders working beyond the scope of work approved by the authority.
The application process for residence permits is also going to change. Medical check-ups—previously required for all foreigners aged between 18 and 70 years old when applying for a residence permit—will be extended to incorporate all ages from 16 and above, with no upper age limit. Also, the time frame allowed for authorities to process applications is increasing from five to 15 days.
Whilst the need to be aware of who is entering the country and when they plan to leave is clearly important, KPMG suggest that an ulterior motive may reveal itself. Their statement read, “It will be interesting to see how the Chinese authorities will link the visa type to the foreign nationals’ tax compliance status in the PRC, thereby enforcing the collection of individual income tax from foreign individuals. It is imperative that the HR personnel of companies in the PRC familiarise themselves with the new visa types and their associated requirements.”
Paul Arkwright
Publisher
