August 29, 2012 / Law Alert

China's New Exit and Entry Laws

Enacted on June 30, 2012, and effective on July 1, 2013, China's new exit and entry laws (the Laws) include, among others, the provisions that are designed to closely regulate foreigners visiting, working and staying in China. Below are some highlights that may be relevant to the U.S. companies and individuals that contemplate visiting and/or doing business in China.

Entry
There are a total of eight categories of Chinese visas, including the most popular ones such as "L," "F" and "Z." "L" visa is generally used for the purposes of tourism, families and other short-term non-business visits to China. "F" visa is generally used for the business visits and the visitor is expected to remain in China no longer than six months. "Z" visa is generally used for purposes of work (including commercial performance and academic exchange). According to the Laws, a foreign visitor may not be admitted to China at the Chinese port of entry if his/her purpose of visit does not match the visa he/she holds.

Employment
Under the Laws, a foreigner is only allowed to work in China (i) with obtaining necessary work permit and residence permit, and (ii) within the scope of the specified and permitted work. An employer that hires foreigners (including foreign students) is required to register with the local police department. Any deviation from such requirements would be considered as illegal employment.

If found illegal employment, (i) the employee may be subject to (x) a fine of a minimum of RMB5,000 (approximately $790) and a maximum of RMB20,000 (approximately $3,170), and, if serious, (y) detention for five to 15 days; and (ii) the employer may be subject to a fine of RMB10,000 (approximately $1,590) for each illegal employee, up to a maximum of RMB100,000 (approximately $15,900). In addition, financial gains of both the employee and the employer, which are derived from illegal employment, may also be subject to government confiscation.

Stay
A foreigner who works in China must apply for a residence permit if the residence period exceeds 90 days. Residence permits for work purpose can be valid from 90 days to five years. Residence permits for non-work purposes (i.e., study) can be valid from 180 days to five years.

If a foreigner overstays beyond the valid term of his/her residence permit, he/she may be subject to (i) warning, (ii) a fine of RMB500 (approximately $80) per day with a maximum of RMB10,000 (approximately $1,590), (iii) detention for five days with a maximum of 15 days, and/or (iv) deportation.

If a foreigner violates the Laws with serious circumstances, he/she may be deported in accordance with the decision by the Ministry of Public Security, which decision is not appealable. Deported foreigners shall be prohibited from re-entering China up to 10 years from the date of deportation.