A new view on the legal nature of the work permit for foreigners working in China

Every foreigner who works in China is supposed to hold a Work Permit issued by local labor department. Otherwise, the employment of the foreigner is illegal. The consequences of this illegality will be (1) penalties that may be imposed by local labor department and local police, and (2) more importantly, the change of the relationship between the foreigner…

Your employers no longer able to secretively cancel your work permit in Shanghai

Recently, I scored a big victory in a case against Shanghai Labor Department (“SHD“) in which we sued SHD for wrongly cancelling the work permit of my client, an American individual. The court judgment, coming after long period of intentional delay, declared that SHD’s cancellation of alien work permit based on the unilateral application…

Clarification on two points regarding China inheritance practice

China themed information is pervasive throughout the web. Randomly, I came across an article discussing China inheritance or succession system, entitled “facts about Chinese society’s inheritance“.

While the bulk of the information contained in the article is correct, it will be useful to clarify some of the points made therein.…

China MOFCOM and SAFE issued new rules for foreign invested investment companies

On December 8, 2011, China Ministry of Commerce and Chins State Administration of Foreign Exchange jointly issued a new circular further regulating the business of foreign invested investment companies.

A foreign invested investment company refers to a foreign invested company that is engaged in direct equity investment acitivities in China, often employed…

Do I enjoy the tax credit benefit under China-USA income tax treaty?

Recently, an American expat working in China approached me for advice about his situation where he was ordered by local tax authority to pay individual income tax that is inadvertently evaded in the past five years.

The USA expat was originally dispatched by American parent company to offer engineering support to Chinese plant. He was however paid by the parent…

Individual Income Tax Liabilities for Expatriates in China

For foreigners lured into China labor market, there are many things for them to ponder over before heading to China soil. One of the critical things that need to be clearly addressed is the tax implication of working in China, namely, whether you need to pay individual income tax in China, and how and how much you need to pay China individual income tax.

For those…