social security for laowais

[大枪]

Anyone heard about the new law passed by Beijing that makes it mandatory for laowais and their employers to pay into social security every month?

A benefit or not? In my opinon, not.

Apparently comes into effect from OCT 15 but as usual, there's a bunch of issues that haven't been fully thought out.

http://www.china-briefing.com/news/2011/10/07/social-insurance-law-implementation-differences-across-china.html

[kaibo 开 博]

Yes, I had a meeting with an official from the taxation office last night and an SOE accountant.

Apparently it is a 32% compulsory employer payment and an additional 11% compulsory contribution from the employee. I questioned those figures but the officials maintained their statement. Wow, that is huge! If it is across the board it will no doubt 'bankrupt' many small businesses, reduce employment prospects, deter training of graduates etc. Bear in mind I have not seen any official document and some information might be misconstrued by me or my clients.

It seems in my mind that this is a hefty attempt to play catch-up on the depleted 'superannuation' fund. I recall some retirement fund The PRC has no funded pools for the 'baby boomers' - if I may call them that - who will retire in about ten years from now. Also when it comes to the private sector employees that same group is grossly underfunded; whereby only SOE employees have any kind of substantial benefit. I would prefer to be funding my own retirement; in that I may or may not be here long term. Most foreigners here are only sojourners and will never have access to these funds once departure has occurred I guess. There must be some guidance in this respect. A qualifying period of at least 5 years should be with standing and if we are required to contribute then a 5 year workplace contract should be in place. The only other way this could work is if the super-fund can be rolled over into a chosen international fund or established as an international fund from the outset.

The fund management industry handles the bulk of the world’s wealth. These institutions include insurance companies, hedge funds, mutual funds, sovereign wealth funds, etc. But the elephant in the room is pension funds. These are institutions that provide retirement income, both public and private.

Global pension assets are estimated to be ... $31.1 trillion. It is more than twice the size of last year’s GDP in the U.S. ($14.7 trillion).

http://www.zerohedge.com/news/wikileaks-discloses-reasons-behind-chinas-shadow-gold-buying-spree

The above article illustrates why gold might hit 5,000 USD per ounce in future. US pension funds are in total deficit. There is only one reason I do not liquidate my super into cold, hard gold; that reason being that my fund provides a life insurance payout to my Chinese family and disability payout to me. As for any pension fund in China, basically I am not interested; give me physical gold and silver bullion and shove the rest where it fits!

[kaibo 开 博]

Squeeze Threatens Future Pensioners
2011-05-16


BEIJING - China's pension fund is under increasing pressure, and people may find that they will not receive enough money after retirement.

http://www.npfpc.gov.cn/en/activities/detail.aspx?articleid=110516182414093073


This article demonstrates the deficit as I mentioned prior.

[Aussie Mike]

I'm attempting for find out about this

My understanding so far is that new tax laws apply to foreigners for income tax which is cheaper from 5% to 3%, I now pay approx 2/3 of my income tax.

However there is another change which includes the social welfare tax of 11% for the foreigner and 32% for the employer.

Little information is available for the general public at the moment even employers are only aware of the tax decrease not the social welfare tax.

This was sent to me
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中华人民共和国人力资源和社会保障部令
Decree of the Ministry of Human Resources and Social Security of the People’s Republic of China

第16号

No.16

《在中国境内就业的外国人参加社会保险暂行办法》已经人力资源和社会保障部第67次部务会审议通过，并经国务院同意，现予公布，自2011年10月15日起施行。

The Interim Measures for Participation in Social Insurances of Foreigners Employed in China have been deliberated and passed at the 67th Administrative Meeting of the Ministry of Human Resources and Social Security and approved by the State Council. These Measures are hereby promulgated and shall come into force as of October 15, 2011.

部 长 尹蔚民

Yin Weimin (Minister)

二一一年九月六日

September 6, 2011

在中国境内就业的外国人参加社会保险暂行办法
INTERIM MEASURES FOR PARTICIPATION IN SOCIAL INSURANCES OF FOREIGNERS EMPLOYED IN CHINA

第一条 为了维护在中国境内就业的外国人依法参加社会保险和享受社会保险待遇的合法权益，加强社会保险管理，根据《中华人民共和国社会保险法》(以下简称社会保险法)，制定本办法。

ARTICLE 1 These Measures are formulated in accordance with the Law of the People’s Republic of China for Social Insurances (“Social Insurance Law”), for the purpose of protecting the lawful rights and interests of Foreigners employed in China to participate in social insurances and enjoy the benefits of social insurances, as well as for the purpose of strengthening the management of social insurances.



第二条 在中国境内就业的外国人，是指依法获得《外国人就业证》、《外国专家证》、《外国常驻记者证》等就业证件和外国人居留证件，以及持有《外国人永久居留证》，在中国境内合法就业的非中国国籍的人员。

ARTICLE 2 “Foreigner employed in China” means a person who is not of Chinese nationality holding employment certificates and foreigner residence permit certificates such as Work Permit for Foreigners, Foreign Expert Certificate, and Permit for Permanent Foreign Journalists, as well as Foreigner Permanent Residence Certificate, and who is employed lawfully with the territory of China.



第三条 在中国境内依法注册或者登记的企业、事业单位、社会团体、民办非企业单位、基金会、律师事务所、会计师事务所等组织(以下称用人单位)依法招用的外国人，应当依法参加职工基本养老保险、职工基本医疗保险、工伤保险、失业保险和生育保险，由用人单位和本人按照规定缴纳社会保险费。

ARTICLE 3 Foreigners employed by organizations duly incorporated or registered in China such as enterprises, public institutions, social organizations, private non-enterprise entities, foundations, law firms, accounting firms, etc. (“Employer”), shall participate in basic pension insurance for employees, basic medical insurance for employees, work related injury insurance, unemployment insurance and maternity insurance. The insurance premiums shall be paid by the Employer and the foreigner pursuant to the applicable regulations.

与境外雇主订立雇用合同后，被派遣到在中国境内注册或者登记的分支机构、代表机构(以下称境内工作单位)工作的外国人，应当依法参加职工基本养老保险、职工基本医疗保险、工伤保险、失业保险和生育保险，由境内工作单位和本人按照规定缴纳社会保险费。

A foreigner, who has concluded an employment contract with his overseas employer and then dispatched to any branch or representative office duly incorporated or registered in China (“Domestic Work Unit”), shall participate in basic pension insurance for employees, basic medical insurance for employees, work related injury insurance, unemployment insurance and maternity insurance. The insurance premiums shall be paid by the Domestic Work Unit and the foreigner pursuant to the applicable regulations.



第四条 用人单位招用外国人的，应当自办理就业证件之日起30日内为其办理社会保险登记。

ARTICLE 4 An Employer who employs any foreigner shall product the social insurance registration for the foreigner within 30 days upon issuance of his/her employment certificate.

受境外雇主派遣到境内工作单位工作的外国人，应当由境内工作单位按照前款规定为其办理社会保险登记。

The Domestic Work Unit shall product the social insurance registration for the foreigner who is dispatched to China by his/her overseas employer.

依法办理外国人就业证件的机构，应当及时将外国人来华就业的相关信息通报当地社会保险经办机构。社会保险经办机构应当定期向相关机构查询外国人办理就业证件的情况。

The agencies issuing the employment certificate for the foreigners shall report the employment related information of the foreigners in China to the local social insurance agencies. The social insurance agencies shall regularly inquire about the status of the employment certificates of foreigners with the relevant agencies.



第五条 参加社会保险的外国人，符合条件的，依法享受社会保险待遇。

ARTICLE 5 Where a foreigner participating in the social insurances satisfies the prescribed conditions, he/she may enjoy the social insurance benefits.

在达到规定的领取养老金年龄前离境的，其社会保险个人账户予以保留，再次来中国就业的，缴费年限累计计算;经本人书面申请终止社会保险关系的，也可以将其社会保险个人账户储存额一次性支付给本人。

If a foreigner leaves China before he/she is qualified for enjoying the pension benefits, his/her individual social insurance account shall be maintained and his/her period of contributions may be accumulated when he/she is employed in China again; upon his/her written application for termination of the social insurance relationship, the balance in his/her private social insurance account may be refunded in a lump sum.



第六条 外国人死亡的，其社会保险个人账户余额可以依法继承。

ARTICLE 6 The balance in a foreigner’s private social insurance account may be inherited according to law in case of his/her death.



第七条 在中国境外享受按月领取社会保险待遇的外国人，应当至少每年向负责支付其待遇的社会保险经办机构提供一次由中国驻外使、领馆出具的生存证明，或者由居住国有关机构公证、认证并经中国驻外使、领馆认证的生存证明。

ARTICLE 7 A foreigner, who receives social insurance benefits outside China on a monthly basis, shall at least once a year provide the social insurance agency responsible for paying his/her social insurance benefits with an existence certificate issued by China embassy or consulate, or an existence certificate notarized by competent authority in the country where he/she lives in and certified by China embassy or consulate.

外国人合法入境的，可以到社会保险经办机构自行证明其生存状况，不再提供前款规定的生存证明。

A foreigner who lawfully enters into China may prove his/her existence by personal presence at the relevant social insurance agency, and therefor is not required to provide the existence certificate mentioned in the preceding paragraph.



第八条 依法参加社会保险的外国人与用人单位或者境内工作单位因社会保险发生争议的，可以依法申请调解、仲裁、提起诉讼。用人单位或者境内工作单位侵害其社会保险权益的，外国人也可以要求社会保险行政部门或者社会保险费征收机构依法处理。

ARTICLE 8 Where there is a dispute between a foreigner participating in the social insurances and his/her Employer or Domestic Work Unit, either party may apply for mediation, arbitration or file an action according to law. Where an Employer or a Domestic Work Unit infringes the foreigner’s lawful rights and interests, he /she may apply with the social insurance administrative authority or social insurance premiums collecting agency for lawful settlement.



第九条 具有与中国签订社会保险双边或者多边协议国家国籍的人员在中国境内就业的，其参加社会保险的办法按照协议规定办理。

ARTICLE 9 Social insurances for foreigners employed in China with nationalities of countries who have concluded bilateral or multilateral treaties upon social insurance with China shall be handled in accordance with respective treaties.



第十条 社会保险经办机构应当根据《外国人社会保障号码编制规则》，为外国人建立社会保障号码，并发放中华人民共和国社会保障卡。

ARTICLE10 The agencies responsible for social insurances shall formulate the Social Security Numbering Rules for Foreigners, assign the social security number and distribute the social security cards of the People’s Republic of China to foreigners.



第十一条 社会保险行政部门应当按照社会保险法的规定，对外国人参加社会保险的情况进行监督检查。用人单位或者境内工作单位未依法为招用的外国人办理社会保险登记或者未依法为其缴纳社会保险费的，按照社会保险法、《劳动保障监察条例》等法律、行政法规和有关规章的规定处理。

ARTICLE11 The social insurance administrative authorities shall supervise and inspect the participation of foreigners in social insurances in accordance with the Social Insurance Law. Where an Employer or a Domestic Work Unit fails to complete the social insurance registration for any employed foreigner, or fails to pay the social insurance premium for any foreigner, it shall be handled in accordance with the applicable laws, regulations and rules, including the Social Insurance Law and the Regulations for Supervision over Labor Security.

用人单位招用未依法办理就业证件或者持有《外国人永久居留证》的外国人的，按照《外国人在中国就业管理规定》处理。

Where an Employer employs any foreign who does not hold a valid employment certificate or the Foreigner Permanent Residence Certificate, it shall be handled in accordance with the Regulations for Administration of Employment of Foreigners in China.



第十二条 本办法自2011年10月15日起施行。

ARTICLE 12 These Measures shall come into force as of October 15, 2011.

Memo by HR999：

该译本原译者沈雄伟，HR999在摘录时部分用词和语句有调整。

附件部分未提供完整中文原文，有兴趣请参考完整中文版。

附件：

Annex:

外国人社会保障号码编制规则

Social Security Numbering Rules for Foreigners

For a foreign who participates in the social insurances in China, his/her social security number shall be composed of the code of his/her home country or region and the number of valid identity certificate. The valid identity certificate of the foreigner shall mean passport or Foreigner Permanent Residence Certificate. A digit between the code of home country or region and the number of valid identity certificate shall be reserved. It is represented as:

XXX X XXXXXXXXXXXXXX

Code of Foreigner’s Home Country or Region (3-digit English letters)

Reserved Digit (one digit number 0-9)

Number of Valid Identity Numbers

1. The code of foreigner’s home country or region shall be 3-digit English letters of the country code in the first part as defined in the country/region code of ISO 3166-1-2006 Standard, such as Germany: DEU and Denmark: DNK. In case of any change to the international standard, the effective date of the new code will be determined by the Ministry of Human Resources and Social Security.

The code of home country or region of the foreigner who has received the permanent residence certificate in China shall be consistent with the code of country or region in digit 1 to digit 3 (also in 3 digits) included in the number of his/her Foreigner Permanent Residence Certificate.

2. The reserved digit shall be one digit, and the default number is “0”. In case of a special circumstance, it may be a number from “1” to “9”.

3. If the number of the foreigner’s valid passport is used, it shall include all English letters and Arabic numbers indicated on the passport, but exclude the special characters such as “.” or “-”. If the number of Foreigner Permanent Residence Certificate is used, it shall be the numbers from digit 4 to digit 15 contained in the number of certificate.

(1) For example, where a German person is employed by an Employer in China. Provided that his passport number is G01234-56, his social security number shall be DEU0G0123456.

Code of Country or Region: DEU

Reserved Digit: 0

Number of Valid Passport: G0123456

(2) For example, where Danish person is employed by an Employer in China. Provided that the number of his Foreign Permanent Residence Certificate is DNK324578912056, his social security number shall be DNK0324578912056.

Code of Country or Region: DNK

Reserved Digit: 0

Number of Foreign Permanent Residence Certificate: 324578912056

4. The database will reserve 18-digit length for the foreigner social security number (of which, the number of valid passport shall be no more than 14-digit). Where the assigned number is less than 18 digits, it shall be made up to 18 digits.

5. A foreigner’s social security number is unique in China and will not be changed throughout his/her life. In case of any change to the foreigner’s number of identity certificate, his/her social security number in the first registration shall remain unchanged, but the social insurance agency shall make an updated record of his identity certificate type and the change in his/her certificate number.

[kaibo 开 博]

This is obviously a catch up game by the state tax bureau here but must have been promulgated through the chief legislators office. It is a move to attempt to rapidly recover the negative retirement fund portfolio held by the national reserve bank - PBOC. It is what I call 'milking the pig' because basically there are no coins left in the kitty - which is factual. Now the future 'wannabe' piggies have to pay for the 'fat cats' that have been given everything in the past.

Retired executives of SOEs and official public servants in retirement have got so many benefits that the state can't afford now. Even when they work and live they get commensurate packages way above the sustainable factors. Just take a look at all the Audi's driven by young execs around town and you can see the proof. This has been unsustainable for years but has been left unsolicited. What this tax is is a knee jerk reaction to tax the living to pay for those that are already giving a dead return to society. They should radically overhaul their retirement benefit programs for the above group of privileged bureaucrats and ruling class executives first before taxing the general class.

The whole scene in my opinion will backfire with increased unemployment as private enterprise is now forced into paying for 'fat cat' bureaucratic benefits of the rich and famous privileged class. I once met a lady in Hupuo who has a retirement on 5,000 a month from age 50. Then on top of that would be other benefits like free medical I guess, free travel, etc. There must be thousands out there like her all having come from the privileged class. The comfort they must have in retirement is ludicrous. Every nation in the world is running into this problem as governments have dipped into treasury funds to sustain ailing economies.

Gentlemen, the whole damn system is on the verge of folding up and collapsing. The same funds in the USA have trillions in shortfalls that the states are not even factoring in to national debt and China is obviously the same. This new state tax signifies a desperate measure in my books which means our hosts are not sitting half as pretty as we might think they are. We might say, the end of the 'high road' is nigh for the 'bling' dynasty also.