Several days ago, one of our clients contacted the firm with a question about China social insurance for expats. This client was seeking clarification as to whether all foreign employees are required to pay China social insurance, since some employees have labor contracts with foreign enterprises outside of China, and are dispatched to work for the subsidiary in China. In fact, all foreigners legally employed in China must pay social insurance China, this includes any foreign worker employed in accordance with the law by any enterprise, public institution, social group, privately owned non-enterprise institution, foundation, law firm, accounting firm or other organization incorporated or registered in accordance with the law in China, and any foreigner who, upon signing an employment contract with a foreign employer, is dispatched to work in any branch or representative office of the foreign employer incorporated or registered in China. No exceptions.
Foreigners legally working in China, must participate in social insurance programs including basic endowment insurance, basic medical insurance, work-related injury insurance, unemployment insurance and maternity insurance, just like Chinese employees. Social insurance premiums shall be paid by the China company employing the individual, as well as the foreign employee. Of course where a foreign worker meets requirement he or she is entitled to receive the social insurance benefits in China, for example, if he or she meets the relevant legal requirements, he or she will be entitled to receive basic pension in China.
The specific requirements for receiving pension are:
(1) having participated in the basic pension insurance prior to retirement;
(2) having reached the age for retirement or having satisfied legal retirement conditions as stipulated by the State; and
(3) whose contribution payment term having reached 15 years (including deemed payment term) when at the time of retirement.
Under some special circumstances, for example, where the foreign worker departs China before the above requirements are met, the social insurance he or she has already paid will not simply be lost, but will be subject to special treatment.
When a foreigner leaves China before becoming eligible to receive the pension, the account will be maintained, and will begin to accrue again when the foreigner returns to China. If the foreigner has no plans to continue work in China, application may be made to receive the current balance of benefits in a lump sum. If a foreigner dies, his social security benefits are allowed to be distributed to the estate.