China Permanent Residence Application: Explaining The Process In Shanghai

Due to the COVID-19 pandemic and ensuing travel bans, many foreigners working in China have begun to consider applying for a Chinese “Green Card”, or permanent residence ID card. With the card, an expatriate will be able to enter China just like Chinese citizens, without going through visa formalities.

Holders of a Foreigner Permanent Residence ID Card are not only free to enter and exit China, but also allowed to reside and work in China indefinitely. In addition, the card will bring them convenience in employment, children’s education, social security, healthcare, finance, transportation, accommodation, property purchase, and many other aspects of life in China.

This article explains the main benefits of obtaining a Chinese permanent residence ID card, the eligibility criteria for foreigners to apply for such a card in Shanghai, and the points to note when applying.

What Benefits Can Be Enjoyed By Foreigners With Chinese Permanent Residence Status?

According to the Measures on the Relevant Benefits for Foreigners with Permanent Residence Permit in China, in theory, foreigners granted permanent residency enjoy the same rights and bear the same obligations as Chinese citizens, except the political right and some certain rights and obligations subject to China laws and regulations.

Specifically, foreigners with Chinese permanent residence status will be entitled the following treatments:

Source: Measures on the Relevant Benefits for Foreigners with Permanent Residence Permit in China

Perhaps the biggest benefit of obtaining the Chinese permanent residence status for foreigners is the elimination of the cumbersome visa application procedures. With permanent presidency, the foreigner is allowed to live and work in China without any restriction – they do not need to apply for other residence and work permits, nor do they need additional visas to enter and exit China.

Although all foreigners working in China can participate in social insurances, permanent residence ID card holders enjoy more convenience in going through the formalities of transferring, continuing, or terminating their social insurances by presenting their green card.

Besides, foreigners as permanent residents are also allowed to purchase commercial apartment for self-use, without the need to have first worked or studied in China for several years. They shall still be subject to restrictions on purchasing properties in China and cannot engage in property market speculation.

Education-wise, card holders’ accompanying children are allowed to enter a school for the nine-year compulsory education. And if they are eligible, the education department of the holder’s residence will help deal with the admission and transfer formalities following the principle of admission to neighborhood schools and will not charge fees other than those required by the state.

In terms of investment, foreigners with permanent residence are able to set up and contribute to the registered capital of a foreign-invested enterprise (FIE) by intellectual property/intangible assets or making direct foreign investment in China with legally obtained RMB, which may reduce the investment and exchange costs.

Further, the permanent resident ID card, which is now machine-readable, can also be used in various aspects of the foreigner’s life in China, for example, in relevant boarding procedures in the case of domestic flights, purchasing train tickets of domestic trains, and handling check-in procedure at domestic hotels. The card can be used as valid identity document to apply for the driver’s license and registering motor vehicles and handle banking, insurance, securities, foreign exchange, and other financial business in accordance with regulations.

Who Can Apply For Permanent Residence In Shanghai?

The eligibility criteria for obtaining permanent residency in China varies from region to region. Big cities like Shanghai and Beijing adopt additional policies that expand the eligibility criteria and shorten the overall application time. Shanghai, as the first city to implement new measures, shortened the initial application processing time from 180 days to 90 days and included additional five categories of eligible foreigners.

Shanghai now provides 13 categories of people that are eligible for permanent residency. Basically, they can be classified in four major groups – foreign employees holding key positions in enterprises, foreign talents, foreign investors, and linear relatives of a Chinese citizen or a foreigner with permanent residency in China.

Many applicants may choose to apply for the permanent residence ID card as “working staff” in Shanghai. To be qualified, they must have worked in Shanghai over the past four years, stayed in mainland China for no less than six months every year, earned an annual pre-tax salary income exceeding RMB 600,000 (approx. US$94,000), and paid annual individual income tax exceeding RMB 120,000 (approx. US$18,800).

However, “if during the four years, the foreign employee moved to work in another city, they might be considered ineligible,” said Fuki Fu, Manager of Human Resources and Payroll Services at Dezan Shira & Associate’s Shanghai Office, adding, “for example, a foreign employee initially worked in Shanghai for two years, but then moved to work in Beijing for one year. Even if the foreigner later returned from Beijing to Shanghai and worked in Shanghai for another two years, the four years of working in Shanghai cannot be considered as continuous, and the applicant will therefore be deemed as unqualified.”

Nevertheless, “it does not mean applicants can’t change their job. If the next employer is also a company registered in Shanghai, changing employers will not interrupt the four-year rule,” Fuki clarified.

How To Apply For China Permanent Residence?

Here are the primary documents needed for the permanent residence application:

• Complete Application Form for Permanent Residence in China;
• Valid passport and valid visa (or resident permit);
• A health certificate issued by a domestic entry-exit inspection and issued within the last six months;
• Non-criminal record abroad of the applicant or the linear relative;
• Company letters, licenses, and tax payment certificates when applying for the permanent residence card through employment;
• Proof of relationship (marriage certificate, birth certificate, or proof of kinship), as well as evidence of stable housing and income if applicant is an accompanying family member;
• Previous private passport and overseas permanent resident certificate if the applicant was once of Chinese nationality; and
• If the applicant is a foreign investor – the business license, a capital verification report showing that the company’s registered capital has reached the standard, and an audit report showing this for the last three consecutive years are required.

Applicants shall submit the primary documents as well as additional materials required to the Immigration Service Center of Exit-Entry Administration Bureau of Shanghai Public Security Bureau, and the application will be processed within 90 working days (time for investigation is excluded if some items need to be investigated by the Public Security Bureau).

Given the burdensome preparation work and the ongoing travel bans, it is advisable that applicants reach out to a local specialist to handle the application process.

Why Some People Hesitate To Apply?

Many foreigners have concerns over getting a Chinese Permanent Residence ID Card, as they are not sure whether this will impact their tax residency status in China, or whether they will have a worldwide taxation obligation in the country.

In fact, foreigners’ tax residency status depends on whether the individual has a domicile in China and how long they have been resided in China. Without a domicile in China, according to the “six-year rule”, foreigners who reside in China for six consecutive years (for at least 183 days each year) will be subject to taxation on their worldwide income. Therefore, the Permanent Residence ID Card will not directly determine a change in their tax residency status.

Foreigners with permanent residence status should perform the corresponding tax payment obligations in accordance with China tax laws and regulations as well as the international treaties and agreements on tax concluded between China and other countries.

To be noted, “obtaining a foreign permanent residence ID card doesn’t mean the card can be permanently kept by the holder. If the card holder committed illegal acts in China, the Ministry of Public Security has the power to revoke their permanent residence ID card. Foreigners should always abide by the laws while living in China,” Fuki reminded.

As a professional business service provider, Dezan Shira & Associates can provide you necessary support in assessing your eligibility and feasibility, as well as processing your application for a Chinese permanent residence ID card.