On 1 July 2013, a new Exit and Entry Administration Law will become effective, implementing a stricter immigration administration system, increasing punishment for offenders, and facilitating the influx of talented migrants into China

In this China Law Special, Robert Mooijekind addresses the main amendments this new law will make to the current rules governing foreigners staying in China. 

On 30 June 2012, the National People’s Congress (“NPC”) Standing Committee approved the Exit and Entry Administration Law. The law will take effect on 1 July 2013. It combines the immigration rules for Chinese and foreign nationals in one law and replaces the two existing separate laws from 1986.

The reasons for introducing this new law are various. According to Yang Huanning, Vice-minister of Public Security in a report to the NPC in April 2012, China has since 2000 seen a growth of 10 percent annually in the number of foreigners visiting China. Not only has China become a popular tourist destination in recent years, its continuing economic growth also attracts economic immigration. The current set of immigration rules is considered to be outdated and unfit to deal effectively with these growing numbers of visitors. Also, foreigners are now working and living all over China and many do not hold the appropriate documentation. These are issues the Chinese government aims to change by implementing this new law.

Stricter administration of foreigners staying in China
The Exit and Entry Administration Law will implement rules which will further intensify the administration of foreigners entering and staying in China.

Information sharing between government ministries will be increased. Currently, visas are issued by the Ministry of Foreign Affairs and the Ministry of Public Security is responsible for residence permits. However, files of foreigners applying for a visa or a residence permit are also kept by other ministries, such as the Ministry of Commerce or Education, depending on the aim of their visit. As this complicates the enforcement of visa and residence permit regulations, a system will be established to accommodate information sharing.

In addition, foreigners applying for a residence permit will be required to provide their fingerprints and other biometric data to the Public Security Bureau handling their request. Foreigners currently residing in China, who have already obtained a residence permit, will likely be requested to provide this biometric data. The details of this however, still need to be further arranged in lower legislation.

Also, a guidance list will be introduced that sets out desired qualifications of a foreigner working in China. The list will likely have some resemblance to the Foreign Investment Catalogue, which regulates the influx of foreign direct investment in China. It will take into account economic and social development needs, as well as supply and demand for human resources. Even though it is yet unclear what the exact effects of this list will be, it is likely that employment of foreigners in some sectors of the Chinese economy may as a result be (further) restricted or encouraged.

Further, the Public Security Bureau and National Security Department will be given the power to restrict foreigners and foreign institutions from establishing residences or workplaces in certain locations. These restrictions can be implemented for reasons of public safety and national security. This can potentially have far reaching effects on the possibilities for foreigners to establish home or office in regions of China considered to be unstable by the Chinese government, such as the autonomous region of Tibet or Xin Jiang province.

Finally, prevention of illegal employment, work and residence will also be strengthened by increased reporting requirements for companies or institutions, such as universities, employing or servicing to foreigners. Citizens are also encouraged to report in case they suspect a foreigner to work or stay illegally in China.

Higher penalties for offenders and new penalties for employers
The new set of immigration rules will also implement harsher punishments in case of offences. These punishments can be imposed by either an official from the Public Security Bureau or immigration (Exit-Entry Frontier Inspection).

The existing penalties will be increased. If a foreigner is found to be residing in China illegally, that is without a valid visa or residence permit, first a warning will be given. In case of “serious circumstances” a fine of 500 RMB per day will be imposed with a maximum of 10,000 RMB (5,000 RMB under the old law) or he could be detained for 5 to 15 days (3 to 10 days under the old law). The fine for working in China without the required work or business visa or exceeding its scope will be increased from a maximum of 1,000 RMB to an amount of 5,000 to 20,000 RMB. In case of “serious circumstances” this could also entail detention of 5 to 15 days. If China’s laws and regulations are seriously violated, the offender may even be deported and not allowed to enter the country again for 10 years.

A new feature of the law is that institutions or companies that issue a certificate or invitation letter will be held responsible if it turns out the issued document is fake. The penalty is a fine of 5,000 RMB and a full compensation of the costs of an illegal employee’s deportation. If the employer aids foreigners to enter or reside in China illegally and makes profits as a result, these profits will be confiscated.

But also: Visa and Residence Permit for high-flyers
The new Exit and Entry Administration Law will introduce a new visa category for talented foreigners. Talented foreigners and selected investors will also be eligible for a residence permit. The details of these new grounds for the issuance of a visa or residence permit however still need to be further detailed in coming legislation.

The new Exit and Entry Administration Law introduces a stricter immigration administration system and implements a harsher sanction regime for offenders of immigration rules. Even though the exact consequences of this new set of rules will only become apparent after the rules come into force on 1 July 2013, we expect that most foreigners and (foreign) businesses in China will be affected. It will become even more important to ensure compliance with immigration rules. HIL has extensive experience in advising individuals and companies active in China on immigration. We would be delighted to assess your situation and provide you with further advice on the basis thereof.

Robert Mooijekind