News & Policies
Foreigners have to pay social insurance now!
August 16, 2021, [Notice on Several Issues Concerning the Participation of Urban Workers’ Social Insurance by Foreigners Working in Shanghai, Persons Obtained Overseas Permanent (Long-term) Right of Abode and Residents of Taiwan, Hong Kong and Macau" (Shanghai People’s Social Insurance Development  No. 38, hereinafter referred to as "Circular 38")] The policy expires. Shanghai is officially in line with the country and has entered the era of full social security participation.
This means that any employer in Mainland China that employs foreigners or residents of Taiwan, Hong Kong and Macao in accordance with the law shall fully participate in social insurance in accordance with the law. Social insurance expenses shall be jointly borne by the laborer and the employer in accordance with the law. As for the expiry of Circular 38, the "three risks" will change to the "five risks" issue. In fact, after the merger of medical treatment and childbirth, the "five risks" have become the "four risks". Between the four insurances and the third insurance, there is only one unemployment insurance, 0.5% (enterprise part) exists.
There is still room for exemption of the social security obligation of foreigners and people from Taiwan, Hong Kong and Macao. China has reached agreement with 10 countries on bilateral mutual exemption of certain types of social insurance. This also means that citizens who have already participated in social insurance in their own country can be exempted from the obligation to participate in social insurance projects that are mutually exempt from the agreement during the period of employment in the other country.
Mutual exemption of social insurance is not "mutual exemption from the obligation of participating in social insurance during the period of employment in the other country", but "mutual exemption from the (part of) social insurance during the period of employment in the country for the insured person of the other country" Obligation to Participate”.
Q: What if foreigners or residents of Taiwan, Hong Kong, and Macao are not willing to participate in the insurance, or the company simply does not provide insurance for foreigners or residents of Taiwan, Hong Kong, and Macao?
A: First of all, we are almost certain that the social security agency has no incentive for the time being to initiate a general survey of foreigners’ participation in social insurance.
In view of the particularity of foreigners’ employment identification, it is not excluded that the Human Resources and Social Security Department requires the company to submit social insurance participation records or complete social insurance account opening when verifying employment permits. Of course, this is just a guess. Whether this is really the case, please refer to the list of necessary materials submitted during the future employment permit verification. Moreover, residents of Taiwan, Hong Kong and Macao do not need to apply for an employment permit for employment.