New "Social Security Insurance" rules in China
On November 27, 2020, Schindhelm participated in a hybrid seminar of the German Centre Beijing and the German Centre Shanghai on the topic "How to prepare for the new Individual Income Tax and Social Security Insurance rules".
With regard to the new "Social Security Insurance" rules in China, our clients are currently particularly concerned with the issue of paying social security contributions for local employees who work and live in a Chinese city where the company does not have a branch office. In order to be able to pay the social security contributions of these employees at their place of work and residence, the so called “HR outsourcing service agents” has been used up to now. However, there is no clear legal basis for this practice.
For the capital Beijing, the competent "Beijing Municipal Human Resources and Social Security Bureau" has now issued a notice on June 30, 2020, according to which employers who do not have a branch office in Beijing may no longer pay the social security contributions for their local employees through an "HR Outsourcing Service Agent". In this respect, it can be assumed that other cities may follow the "Beijing model".
A lawful alternative to the aforementioned practice is the establishment of a so-called "Branch" at the place where local employee work and live. Our experts at the Schindhelm locations in China around attorney Marcel Brinkmann are available as contact persons for the legal structuring options for you at any time.
Schindhelm would like to thank Mr. Christian Sommer, the CEO & Chairman German Centre Shanghai, for his invitation to this very successful event.