Hiring Foreigners in China: Work Visas and the Real Cost
Hiring Foreigners in China: Work Visas and the Real Cost
You set up a company in China. The natural next step is to put someone on the ground – yourself, or a manager from your team. Most owners treat the work visa as a formality at this point. That assumption is where the trouble starts.
A Chinese company can sponsor a foreigner, including its own owner. But the permit sits behind three separate gates: the company has to be real enough to qualify as a sponsor, the person has to score enough points to be approved, and the true cost of a foreign hire runs well above the salary you agreed. Miss the first two and you get refused. Get the third wrong and you end up paying for a setup that never earns its keep.
I run companies in China and Hong Kong, and I am from a high-barrier country myself, so I have seen this from both sides – sponsoring people, and being the foreigner who needed sponsoring. Here is how it works, and where entrepreneurs lose money before anyone gets a visa.
Step 0 – your company has to qualify before you do
Before anyone looks at your CV, the bureau looks at your company. A Chinese entity can only sponsor a work permit if it reads as a real, operating business. On paper that means a registered company. In the room it means something more specific:
- A real, leased office that an immigration officer can visit and confirm. A virtual address will not pass.
- Active operations, with revenue and a tax record the bureau can see.
- Local Chinese staff on the payroll. A company with no Chinese employees and one foreign founder is the hardest case to approve.
- A clear reason why this particular job needs a foreigner.
If your company is only a name and a bank account, the application is very likely to be refused. This is the same substance the tax bureau and your bank both look for, so it is worth building properly either way.
Then you have to qualify too
China does not have a founder visa. Being the owner or the director does not exempt you from the checks any foreign employee goes through. You need a clean criminal record, a health check that clears infectious diseases, and enough points.
China grades foreign workers on a points system, and the score sorts you into one of three tiers:
- Category A – 85 points and above. High-end talent. Priority processing and permits of up to five years.
- Category B – 60 to 84 points. Professionals. This is where most foreign entrepreneurs and managers land, and 60 is the number you have to clear.
- Category C – below 60. Restricted and quota-controlled, mostly short-term or low-skilled roles, and not the basis for running a business.
So the practical bar is 60 points. They come from a mix of factors:
- Salary, measured against the local average wage – the biggest single block of points.
- Education, weighted higher for a master’s or doctorate than for a bachelor’s.
- Work experience, with a minimum of two years.
- Age, with the top band running roughly 26 to 45.
- Chinese language ability, where HSK level 4 and above adds points.
- Working in a designated development zone, plus extras for awards or patents.
Two things tightened in 2026, and they catch entrepreneurs who planned around older rules. Since February, the age-60 ceiling for Category B is enforced strictly, and renewals past 60 are being rejected. And Beijing and Shanghai brought back salary thresholds on top of the points: in those cities Category A now means earning at least six times the local average wage, and Category B at least four times. Most other cities set their own minimum salary, and if the pay you declare is too low, the permit is refused whatever your score.
The application, step by step
Once the company qualifies and you clear the points, the process runs in a fixed order:
- Your company applies for a Work Permit Notice in China.
- With that notice, you apply for a Z visa at the Chinese consulate in your home country.
- You enter China on the Z visa and convert it into a Residence Permit within 30 days of arrival.
The Residence Permit is what lets you live and work there. The first one usually runs 6 to 12 months, and it renews as long as the company stays compliant. That loops straight back to Step 0: if the company falls out of good standing, the permit behind it is at risk too.
Sometimes a Z visa cannot be issued in your country, or you need to be in China sooner than the standard process allows. The route then is to enter on a business visa and switch to a work permit from inside the country. This only works in certain cities, and the rules change often, so check with a local visa agent before you book the flight.
One honest note on scope. We are not immigration lawyers, and the visa filing itself is handled by a local agent who knows your city’s current practice. What we handle is the company side – making sure the entity and its payroll are built so the sponsor half of the application holds up. Get that half wrong and the best visa agent in the city cannot save the file.
The part nobody budgets for: what a foreign hire really costs
Here is where the math usually goes wrong. The salary you agree with someone is neither what the role costs you nor what they take home. Income tax comes out of their pay, and you add mandatory contributions on top. One legal break can bring the tax down, though it has a deadline.
Income tax, withheld every month
China taxes salary on a progressive scale, from 3% at the bottom up to 45% at the top. The employer withholds it and pays the tax bureau by the 15th of the following month. For a well-paid foreign manager the higher brackets bite quickly, so the take-home lands well below the headline figure. Be clear about that with the person before they move.
Social insurance, on top of the salary
Then come the mandatory contributions: pension, medical, unemployment, work injury, maternity, and, in most cities, the housing fund. On the employer side they add roughly 30 to 35% of salary, with another 10% or so withheld from the employee. A salary of 10,000 yuan a month costs the company closer to 13,000 once the employer share is on. Foreign employees have been inside this system since 2011, so you cannot opt them out by default.
There is one common exemption worth knowing. China has social-security agreements with 11 countries – Germany, Japan, South Korea, Canada, Switzerland, the Netherlands, Spain, and a handful of others – and an employee from one of them can usually be released from the Chinese pension contribution. It is not automatic. You apply for it through the company, with proof that the person still pays into their home scheme.
The one legal way to bring the tax down, with a deadline
There is a real, legal lever here, and it has a clock on it. Through the end of 2027, a foreign employee can receive certain benefits in kind free of income tax – housing rent, children’s school fees, language lessons, meals, relocation, and home leave among them – as long as each one is reasonable in amount and backed by a proper fapiao (the official Chinese tax invoice). Built into the package instead of paid as cash salary, these can lower the tax bill by a meaningful amount. The policy has been extended before, but it is currently set to expire at the end of 2027, so treat it as a planning window rather than a permanent feature.
When China starts taxing your worldwide income
This one matters most for the founder who relocates, and it is widely misunderstood. Spend 183 days or more in China in a calendar year and you become a tax resident for that year. Your China-source income, including the salary your Chinese company pays you, is taxed from day one regardless. Residency by itself does not reach your income from outside China.
What brings that outside income into China’s net is the six-year rule. If you are a tax resident for six years in a row, and in none of those years you leave China for a single trip longer than 30 days, then from the seventh year China can tax your worldwide income. The escape hatch is written into the rule itself: one trip of more than 30 consecutive days outside China in any year resets the clock. Founders who split their time between China and home rarely trigger it. The rule started counting from 2024, and 2025 was the first year it could apply, so it is live now and worth tracking from day one if you plan to be in China most of the year.
Family, and how many foreigners you can bring
Once you hold a Residence Permit, your spouse and children can apply for dependent visas and live in China with you. A dependent visa does not carry the right to work. If your spouse wants a job, they need their own work permit, on their own points.
There is no national cap on how many foreigners a company can sponsor. Local bureaus, though, often apply a rough ratio, somewhere around one foreigner for every three to five Chinese staff on the payroll. Your first foreign hire is usually straightforward; each one after that leans on having a real local team to match. It is another reason the paper-only company fails: with no Chinese employees on the books, the bureau hesitates even on the first sponsorship.
Before any of this: do you need a foreigner on the ground at all?
This is the question I put to founders before we talk visas. Often the honest answer is that you do not need to relocate anyone. A lot of China-facing businesses run perfectly well from a Hong Kong company, with buying trips and a trusted local contact, and nobody on a Chinese work permit at all.
Putting a foreigner on the ground earns its cost when the role genuinely needs presence – running a local team day to day, or holding a licensed position that has to be filled on-site. If the real reason is closer to “it would be good to have someone there”, the cost stack we just walked through usually outruns the benefit: the salary, the 30 to 35% on top, and the substance the visa itself demands.
If you have not settled whether you need a mainland company in the first place, the Hong Kong vs China guide walks through that fork, and founders moving into the mainland can start from expanding into China. When it is time to set the entity up in the right order, that is our China company formation work; and once people are on a Chinese payroll and the profit needs to come home, moving money out of China runs on the same documentation discipline as everything above.
Common questions
Yes. Your Chinese company can sponsor you, the founder, the same way it sponsors any foreign employee – through a Work Permit, a Z visa, and then a Residence Permit. The catch is that the company has to look like a real, operating business first: a leased office, active operations, local staff, and a clear reason the role needs a foreigner. A company that is only a name on paper will usually be refused, founder or not.
At least 60. China sorts foreign workers into three tiers by a points score: Category A is 85 and above, Category B is 60 to 84, and Category C is below 60. Most entrepreneurs and managers aim for Category B, so 60 is the practical floor. Points come from salary against the local average, education, work experience, age, Chinese language ability, and a few extras such as working in a development zone. Since 2026, Beijing and Shanghai also enforce salary multiples on top of the score.
More than the salary line suggests. The employer adds mandatory social insurance and housing-fund contributions of roughly 30 to 35% of salary, and withholds income tax of 3% to 45% from the employee’s pay. A 10,000-yuan salary costs the company closer to 13,000 once the employer share is counted. Employees from the 11 countries that hold a social-security agreement with China can often be released from the pension portion, but you have to apply for it through the company.
Yes, through the end of 2027. Foreign employees can receive certain benefits in kind free of income tax – housing rent, children’s education, language training, meals, relocation, and home leave among them – as long as each is reasonable and supported by a fapiao. Built into the package as genuine, documented expenses rather than disguised cash salary, they lower the tax bill. The policy is currently set to expire at the end of 2027, so treat it as a window while it lasts.
Not right away. You become a China tax resident at 183 days in a calendar year. Your China-source income, including any China salary, is taxed from day one; residency alone does not reach your income from outside China. That outside income enters China’s net only under the six-year rule: six consecutive years as a resident with no single trip over 30 days outside China. One trip longer than 30 days in a year resets the clock, which is why entrepreneurs who split their time rarely trigger it. The rule has been live since the 2024 count, with 2025 the first year it could apply.
They can come; they cannot work on a dependent visa. Once you hold your Residence Permit, your spouse and children can apply for dependent visas and live in China with you. If your spouse wants to work, they need their own work permit and have to qualify on their own points, the same as any other foreign hire.
Need help with this?
If you are weighing whether to put someone in China – yourself or a hire – the company side is where it succeeds or fails, and that is the part we handle. Book a free 30-minute call and we will work out whether relocation is even the right move for your business, and how to build the entity so the visa holds.