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Human resources recently spoke to Matthew Durham, partner of Simmons & Simmons on a number of things Hongkongers should take note of if they seek employment in mainland China.
On July 28, 2018, the State Council of the People’s Republic of China (“PRC” or “China”) released a Circular (GuoFa  No. 28) abolishing 11 administrative approvals. Significantly for Hong Kong passport holders, one of these is the requirement to obtain a PRC work permit in order to take up employment and work in the PRC. This relaxation will also apply to Macau and Taiwan residents. The announcement instructs the Ministry of Human Resources and Social Security (MoHRSS), to formulate substitute policies and measures in connection with the administration and supervision of these residents while working in the mainland. In October 2018, MoHRSS issued a draft Interim Measures, which set out certain arrangements in respect of social insurance contributions in the mainland.
Going forward, Hong Kong passport holders will be able to use a PRC mainland travel permit, which is relatively easy to obtain, to take up employment and work in the PRC. Previously this could be used for general travel, visits and even business trips to the mainland, but now it will also cover employment. This means that it will not be necessary for Hong Kong passport holders to apply for a PRC work permit and PRC residence visa to work in China, although this remains a requirement for most foreign nationals to do so.
This is a welcome development and in line with PRC government proposals to facilitate opportunities and streamline the process for Hong Kong passport holders to live and work in the mainland. It will remove some of the administrative challenges and potential delays in obtaining the correct status to work in China.
The work permit application can be quite a complex process, with the exact process and documentation required determined based on various qualifications and other criteria for the applicant, including age, position, academic qualifications, salary and work experience. The overall process can take a month or so to complete. Removing this requirement will make it much easier and quicker for Hong Kong passport holders to take up positions in China and commence working.
Nevertheless, it is important that Hong Kong passport holders should ensure that they have and retain the following in connection with their PRC employment: a duly executed employment contract; a copy of the business license of the employing entity; and salary payment vouchers or payslips. PRC employers can be liable to pay double salary for a period of time if they fail to put a written employment contract in place. Companies and individuals should also consider PRC individual income tax and statutory social insurance contributions, especially in situations where individuals may have dual roles or employment in both mainland China and Hong Kong.