Foreign workers in China are required to participate in the country's social insurance system, which is designed to ensure they have access to various social benefits such as pensions, medical insurance, unemployment benefits, and more.
This system is part of China's broader effort to integrate foreigners into the national welfare structure, providing legal protection for their social security rights. The regulation governing these contributions was first issued in 2011 and has undergone several updates, including a significant revision in December 2024.
Eligibility and Participation
Foreigners working in China are defined as individuals who hold valid work permits, such as the Foreign Work Permit of the People's Republic of China, the Foreign Correspondent Visa, or a Permanent Resident Permit for foreigners.
Those working legally in China under these permits must contribute to the country's social insurance system. This includes the basic pension, medical insurance, work injury insurance, unemployment insurance, and maternity insurance.
Both the employer and the employee are responsible for making the contributions according to regulations.
Registration and Documentation
Employers are obligated to register foreign employees with the social insurance system within 30 days of the issuance of their work permits. This registration process is crucial to ensure that workers have access to social insurance benefits. Additionally, employers must regularly provide updates to local social insurance agencies about the employment status of their foreign staff.
For foreign workers sent to China by overseas employers, the domestic work unit must handle their social insurance registration and ensure the appropriate payments are made. This registration process must be done in accordance with the laws governing the employment of foreigners in China.
Benefits and Entitlements
Foreign workers in China who meet the necessary conditions are entitled to social insurance benefits. This includes access to the full range of services such as pensions, healthcare, and unemployment benefits.
If a foreign worker leaves China before reaching the age of retirement, their social insurance account will remain open. If they return to China to work again, their previous contributions will be counted towards their total years of contributions.
In some cases, upon leaving the country, foreign workers may also apply to withdraw the balance of their social insurance account in a lump sum.
If a foreign worker passes away, the balance in their social insurance account can be inherited by their legal beneficiaries.
International Agreements
Foreign nationals from countries that have bilateral or multilateral social security agreements with China will follow the specific provisions of these agreements when it comes to social insurance contributions. These agreements aim to avoid double contributions and ensure that foreigners working in China are not disadvantaged compared to Chinese citizens.
Social Insurance Numbers and Cards
The Chinese social insurance system requires foreign workers to be assigned a social security number, which is used to track their contributions. This number is typically based on the foreign worker’s nationality code and their identification number, such as the passport number or permanent residence card number. Once registered, the worker will receive a China Social Security Card.
Monitoring and Compliance
The Chinese authorities are responsible for supervising compliance with social insurance regulations. Employers who fail to register foreign workers for social insurance or fail to make the required contributions can face penalties. The Ministry of Human Resources and Social Security is tasked with monitoring these practices and ensuring that both foreign workers and employers adhere to the law.
In case of disputes regarding social insurance contributions, foreign workers have the right to seek mediation, arbitration, or take legal action. Furthermore, if an employer violates the rights of a foreign worker concerning their social insurance, the worker can appeal to the relevant administrative departments.
The Specific Case of Social Contributions of Foreign Workers in Shanghai
In Shanghai, until August 2021, expatriates were not required to contribute to the local social security system. While the city’s policy allowed foreigners to participate in social insurance since 2009, the contribution remained voluntary until the expiration of the policy in August 2021. Since then, it was not officially confirmed whether foreign employees were obligated to participate in social insurance, although other cities in China have already enforced mandatory contributions.
The revision of social security contributions in China, which came into force in December 2024, put an end to the gray area that exempted some Shanghai expatriates from these contributions. Henceforth, foreign workers are obliged to contribute to China's social security system, covering old-age insurance, health insurance, unemployment insurance, industrial accident insurance and maternity insurance.
It’s important to note that foreign workers in Shanghai can still be exempt from these contributions if they come from countries with bilateral agreements with China, such as Germany, South Korea, Denmark, Canada, Finland, Switzerland, the Netherlands, Spain, Luxembourg, Japan, and Serbia
Conclusion
China’s social insurance system is an essential part of the country’s welfare infrastructure, and foreign workers are required to participate fully in it. Employers must ensure that their foreign employees are registered with the social insurance system and that contributions are paid in a timely manner. Foreign workers, in turn, are entitled to social security benefits, which are vital for their well-being and protection while working in China. As the country continues to grow and attract foreign talent, it is essential for all parties to understand and comply with these regulations to ensure a fair and supportive working environment.
