Navigating China's Regulations on Foreign Employment & Legal Jurisdiction

China’s regulatory environment regarding foreign nationals working, interning, or studying can be complex. This article aims to provide a comprehensive understanding of the rules and consequences of non-compliance. It delves into the specifics of the Alien Entry and Exit Administration Regulations, the Exit and Entry Administration Law, and the Foreign-Related Civil Relations Law.

It also outlines potential penalties for illegal employment, the legal jurisdictions in legal disputes, and the governing law for labor contracts. Whether you are a foreign student looking to intern, an employer hiring foreign nationals, or a party in a foreign-related civil dispute, understanding these regulations is crucial to ensure a stress free life in China.

Foreign Students Working or Interning in China

Article 22 of the Alien Entry and Exit Administration Regulations states that a foreign student who wishes to work or intern in their school must first get the school’s approval. Then, they must apply to the public security exit and entry management agency for a residence permit indicating the location and duration of the work or internship.

If a foreign student’s residence permit does not have this information, they are not allowed to work or intern at the school. Article 43 of the Exit and Entry Administration Law clarifies that any foreign national who doesn’t obtain a work permit and work-related residence certificate as required, works outside the scope of their work permit, or violates the regulations governing foreign students’ work-study programs in China and is considered illegally employed.

Penalties for Illegal Employment

Under Article 80 of the same law, foreign nationals who are illegally employed can face fines ranging from RMB 5,000 to 20,000. In severe cases, they can be detained for 5 to 15 days and fined RMB 5,000 to 20,000. Also anyone who introduces a foreign national for illegal employment can be fined RMB 5,000 per person, up to RMB 50,000 in total. In addition an institution can be fined RMB 5,000 per person, up to RMB 100,000 in total, and any illegal income can be confiscated. Article 70 indicates that any administrative penalty will be imposed by the public security agency of the local government at or above the county level or the exit-entry border inspection agency.

Applicable Law for Labor Contracts

Article 43 of the Foreign-Related Civil Relations Law stipulates that the law of the worker’s workplace should govern the labor contract. If the worker’s place of work is difficult to determine, the law of the employer’s primary place of business should apply. Therefore, Chinese law—the law of the employer’s main place of business should apply.

Choice of Law in Foreign-Related Civil Relations

Chinese law does not clearly state that parties can choose the law applicable to their foreign-related civil relations. If parties choose to apply a certain law, the people’s court will deem the choice invalid unless a law specifically allows parties to select a law that governs their disputes. In this case, because it is not a general contract, the parties cannot choose the law.

Jurisdiction in Legal Disputes

According to Article 265 of the Civil Procedure Law, if a contract is signed or performed within China, a lawsuit’s subject matter is located in China, a defendant has property in China that could be seized, or a defendant has a representative office in China, the place where the contract was signed or performed, where the subject matter is located, where seizable property is located, or where the representative office is located may exercise jurisdiction.

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Endless Enterprise Consulting LLC

Endless Enterprise Consulting LLC