Private Enterprises Recruiting Foreign Employees: Analysis of Compliance Path and Core Conditions

Private enterprise recruitment of foreign employees: compliance path and core conditions analysis

In the context of intensifying global competition for talent, the recruitment of foreign employees by private enterprises has become an important strategy to break through technical barriers and expand the international market. However, this process involves a complex legal framework and administrative approval process, and companies need to build a systematic solution from three dimensions: qualification review, job adaptation, and compliance management.

Double review of 1. enterprise qualification and job suitability

1. hard threshold for subject qualification
according to the regulations on the administration of employment of foreigners in China, enterprises must meet three core conditions:

• legal survival : enterprises must be established according to law, have no major illegal records, and their business licenses are within the validity period.
• job scarcity : the recruitment position should conform to the principle of "there is a shortage of suitable candidates in China". for example, a technology company should provide an analysis report on the supply and demand of the domestic talent market when recruiting quantum computing algorithm engineers.
• salary competitiveness : the salary of foreign employees shall not be lower than the average level of the local industry. for example, when a biomedical enterprise in Shenzhen recruits foreign chief scientists, it is necessary to set the standard according to the median salary of foreign experts in the same industry.

2. Position classification precise matching
Foreign employee positions are divided into three categories, each corresponding to different approval criteria:

• category a (high-end talents): such as nobel prize winners and national scientific research project leaders, age and academic qualifications can be exempted. A new energy vehicle company introduced Tesla's former chief engineer into this category.
• category B (professional): bachelor's degree and at least 2 years of relevant working experience are required. if a cross-border e-commerce company recruits an operation director who is familiar with the southeast Asian market, it is necessary to verify its past performance data.
• category C (other personnel): to meet the needs of the domestic labor market, such as an international school recruiting foreign language teachers, need to provide TEFL certificate and teaching evaluation report.

2. the whole process compliance management framework

1. Three stages of pre-approval

• job declaration : enterprises are required to submit the "overseas employment demand declaration form" to the local human resources and social security department, specifying the job name, responsibilities and recruitment reasons.
• license notice : submit 8 materials such as employment contract and no criminal record certificate through the "management service system for foreigners coming to China", and the approval period is about 15 working days.
• visa invitation : apply to the municipal foreign affairs office for the "invitation confirmation letter" with the "foreigner work permit notice". this link requires the enterprise tax payment certificate and the site lease contract.

2. Four elements of employment management

• labor contract : Pay structure, tax payment method and liability for breach of contract need to be clarified, for example, a foreign company agrees in the contract that foreign employees are required to bear the difference in personal income tax.
• residence permit : enterprises are required to apply for a work residence permit within 30 days after the employee enters the country, and the validity period of the permit is usually the same as the term of the labor contract.
• file establishment : copies of passports, medical examination reports and annual examination records are required. a manufacturing enterprise was fined for failing to update the validity period of residence certificates of foreign employees in time.
• social security payment : starting from 2023, Shanghai, Shenzhen and other places will pilot compulsory insurance. enterprises will have to pay five insurances and one fund for foreign employees, but some types of insurance that can be exempted from bilateral agreements with Germany, Japan and other countries.

3. Exit risk prevention and control

• information declaration : enterprises should report to the public security immigration department 10 days before employees leave, the recruitment qualification of a financial enterprise was suspended due to the failure to cancel the residence certificate of the former foreign employee in time.
• certificate cancellation : supervise the cancellation procedures of residence certificates for work and keep the resignation and handover documents for at least 2 years. a technology company lost the labor arbitration due to the lack of evidence chain.

3. typical risk scenarios and coping strategies

1. risk of qualification fraud
when an educational institution recruited foreign teachers, it failed to verify the authenticity of their academic certificates, resulting in the cancellation of the school license by the education department. Enterprises need to establish a triple verification mechanism:

• academic certificates need to be certified by embassies and consulates and confirmed by the overseas study service center of the Ministry of education of China;
• work experience certificate must include the contact information of the former employer;
• no criminal record certificate must be issued by the police of the country of nationality and notarized.

2. Risks of illegal part-time jobs
Foreign employees of a consulting company use their spare time to teach in other institutions and are identified as illegal employment. Enterprises need to specify the non-competition clause in the labor contract and regularly check the social security payment records of employees.

3. Risk of visa overstaying
The residence permit of a foreign employee of a trading company was not renewed in time after it expired, resulting in a fine for the enterprise. Enterprises should set up an early warning mechanism 60 days before the expiration of their documents and establish cooperation with professional immigration agencies.

4. Industry Practice Case Study

Case 1: A biomedical enterprise recruits foreign scientists
the enterprise completes the compliance recruitment through the following steps:

1. submits the "demonstration report on the introduction of high-end talents" to the science and technology department to prove the scarcity of jobs;
2. assist foreign experts to apply for "confirmation letter of foreign high-end talents" and enjoy the green channel of visa;
3. Sign labor contracts that contain intellectual property ownership clauses to avoid the risk of technology leakage;
4. Purchase supplementary commercial insurance for them to cover special needs such as international medical assistance.

Case 2: A cross-border e-commerce company recruits Southeast Asia Operations Director
The company takes the following compliance measures:

1. specify specific requirements such as "be familiar with Lazada platform rules" in the recruitment announcement;
2. check the candidate's past performance data through professional social platforms such as LinkedIn;
3. sign a labor contract containing performance gambling clauses and set up a stepped salary structure;
4. Provide them with cross-cultural communication training to reduce team integration costs.

In the global talent strategy, private enterprises need to build a three-dimensional management system of "integration of legal compliance risk management and control culture. Through the establishment of a special post responsibility system, regular participation in policy training, and the introduction of professional foreign-related human resources service institutions, enterprises can fully release the innovative value of foreign employees while avoiding legal risks, and lay a talent foundation for international development.