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Foreigners who work in China will be covered by China’s social insurance from this October


A new regulation has been promulgated by Ministry of Human Resources and Social Security of the PRC (“MHRSS”) on September 6, 2011 to allow foreign employees who working in China attend China’s social insurance. The Interim Measures on Participation in Social Insurance by Foreigners Working in China (“Interim Measures”) will take into effect on October 15, 2011, the main contents of the Interim Measures are:

1.       the Interim Measures applies to (i) the foreigners employed directly by organizations which are legally established and registered within China such as enterprises ,institutions, social groups ,people-run non-enterprise units, foundations,law firms ,accounting firms and other organizations; (ii) the foreigners concluded employment contract with foreign employers, seconded or expat to China and work in the foreign employers registered branch or representative organization.
2.       the social insurance covers: basic endowment pension, primary medical treatment insurance ,work-related injury insurance, unemployment insurance and maternity insurance.
3.       the treatment under social insurance are: (i) the foreigners attending the insurance meeting with the conditions are entitled to enjoy the treatment of the social insurance according to relevant laws and regulations ; (ii) foreigners leaving China before reaching the pension age can either preserve their individual account and resume the insurance period when come back to China or file a written application to the social insurance agency which will pay back the individual account at one time and terminate the employment social insurance relationship ; (iii) the account of the primary endowment pension can be inherited by the heirs after the death of the foreigners who contribute the social insurance. 
4.       the foreigner who living abroad and receiving the premiums monthly shall submit a survival certificate to the social insurance organs ,which is issued either by Chinese embassies or consulates or notarized by relevant authorities in the resident country and certified by Chinese embassies or consulates.
5.       the foreign whose country signed bilateral or multilateral agreement on social insurance with China shall attend the social insurance in accordance with the agreement. For the U.S. companies, the problem is there is no such bilateral or multilateral agreement on social insurance with China. Many foreigners are hired with contractual commercial insurance provisions that will cover all or some of the five coverage areas identified in the Interim Measures. In addition, many foreign nationals are working in China under a secondment arrangement, and their compensation and expenses are ultimately paid by their overseas employers, which generally also contribute to the social insurance programs for these seconded foreign nationals in their home countries, the duplication of coverage may heavy the employer’s burden.