Employment law Foreign workers
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Establishing Employment Relationships Between Foreigners and Chinese Employers: Key Legal Requirements

Written by Zhang&Partners · Guangzhou, China

Work permit and employment contract infographic: legal requirements for foreign workers establishing employment relationships in China
The essential legal framework for foreign employment in China — work permits, scope limitations, and compliance requirements under PRC law.
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With China's continued economic development and deepening international integration, an increasing number of foreign nationals seek employment in China. However, working in China is not simply a matter of signing an employment contract — foreign nationals must also comply with the mandatory administrative regulations governing the employment of foreigners.

This article provides a systematic overview of the legal conditions for establishing an employment relationship between foreign nationals and Chinese employers, as well as the associated legal risks.

1. Legal Conditions for Recognizing an Employment Relationship

Under Article 4 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (II), where a foreign national establishes an employment relationship with an employer within the territory of China, the people's court shall support the foreign national's claim to confirm the existence of an employment relationship in any of the following circumstances:

  • The foreign national has obtained permanent residency status;
  • The foreign national has obtained a work permit and is lawfully staying or residing in China;
  • The foreign national has completed the relevant procedures in accordance with applicable state regulations.

The above three conditions constitute the basic legal grounds on which Chinese courts determine whether an employment relationship exists between a foreign national and an employer. For the majority of foreign nationals working in China, the second condition — having obtained a work permit and lawfully staying or residing in China — is the most commonly invoked provision.

2. Understanding "Having Obtained a Work Permit"

Pursuant to the Notice on the Full Implementation of the Work Permit System for Foreigners Coming to China (WZF [2017] No. 40), jointly issued by the State Administration of Foreign Experts Affairs, the Ministry of Human Resources and Social Security, the Ministry of Foreign Affairs, and the Ministry of Public Security, the nationwide unified work permit system for foreigners was implemented from April 1, 2017. Under this system, the Notification Letter of Foreigner's Work Permit in the People's Republic of China and the Foreigner's Work Permit of the People's Republic of China are issued.

Accordingly, to be lawfully employed in China, a foreign national must first obtain the above work permit documents. Working in China without a valid work permit constitutes unlawful employment, and the individual will not be protected by PRC labor laws and regulations.

3. Scope Limitations of the Work Permit and Compliance Requirements

A foreign national must not only obtain a work permit, but must also work strictly within the scope specified in that permit. Working beyond the permitted scope may constitute unlawful employment, exposing the individual to significant legal risk.

3.1 Geographic Limitations

Under Article 15(2) of the Administrative Regulations on the Employment of Foreigners in China, an employment permit is valid only within the region specified by the issuing authority. This means a foreign employee may only work within the city or region stated on the permit.

3.2 Employer Limitations

Under Article 23 of the Administrative Regulations on the Employment of Foreigners in China, the employer of a foreign national working in China must match the entity specified on the employment permit. Changing employers requires compliance with the following procedures:

  • Changing employer within the region specified by the issuing authority while remaining in the same occupation: Approval from the original issuing authority is required, and the employment permit must be amended accordingly.
  • Changing to an employer outside the region specified by the issuing authority, or changing employers within the original region but engaging in a different occupation: A new employment permit application must be submitted.

3.3 Legal Consequences of Unlawful Employment

Under Article 43 of the Exit and Entry Administration Law of the People's Republic of China, the following conduct constitutes unlawful employment:

  • Working within China without having obtained a work permit and a work-type residence permit as required;
  • Working within China beyond the scope specified in the work permit;
  • Foreign students violating regulations on work-study programs by working beyond the prescribed scope of positions or time limits.

Where a foreign national is found to have engaged in unlawful employment, the employment relationship between that individual and the employer will not be governed or protected by PRC labor laws and regulations. This means the foreign national may be unable to assert various rights under labor law, including claims for wages, social insurance, and severance compensation.

4. Practical Recommendations

Foreign nationals planning to work in China are advised to observe the following:

  • Secure a work permit in advance: Ensure that a valid work permit and work-type residence permit have been obtained before formally commencing employment.
  • Strictly comply with the permitted scope: Work only within the region, employer, and occupation specified in the permit. Do not unilaterally exceed such scope.
  • Process change applications in a timely manner: If a change of employer, work location, or occupation is necessary, apply for the requisite amendment or re-application in advance.
  • Sign a written employment contract: On the basis of a valid work permit, enter into a written employment contract with the employer, clearly defining the rights and obligations of both parties.
  • Consult a qualified attorney: Given the complexity of the regulatory framework governing foreign employment, it is advisable to consult a PRC-licensed attorney experienced in foreign-related labor law to ensure full legal compliance.

Conclusion

Foreign nationals seeking employment in China must strictly comply with the laws and regulations governing the employment of foreigners. Lawfully obtaining a work permit and working within the permitted scope are fundamental prerequisites for enjoying the protections of PRC labor law. Both employers and foreign employees should pay close attention to compliance requirements to avoid the risk of an employment relationship being deemed invalid due to procedural deficiencies — a scenario that can give rise to significant legal risk and financial loss.

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This article is general information only, not legal advice for your matter. For professional assistance, consult a PRC-licensed lawyer at Zhang&Partners.