Recruiting foreigners: 10 risks and practical guidelines that companies must avoid.

Recruiting foreigners: 10 major risks and practical guidelines that enterprises must avoid

In the current global talent competition intensifies, recruiting foreigners has become an important way for companies to acquire international technical, linguistic and cross-cultural management skills. However, cross-border employment involves multiple complex areas such as visa management, labor regulations, and tax compliance. If the operation is improper, companies may face illegal employment penalties, project interruptions and even legal proceedings. This paper combines real cases and policy requirements to systematically sort out the core risk points and practical suggestions for recruiting foreigners.

1. subject qualification risk: does the enterprise have "recruitment qualification"?

1. Business scope and job matching
Enterprises need to ensure that the business scope is directly related to the recruitment position. For example:

• when recruiting foreign algorithm engineers, technology companies need to prove that they belong to "high-tech enterprises" or that their positions are listed in the "catalogue of urgently needed talents";
• educational institutions need to hold a "school license" and foreign teachers' qualifications to recruit foreign teachers;
• medical institutions recruit foreign doctors, must have the "medical institution practice license" and the corresponding department settings.
  case : an international school was found to be illegal because it did not obtain the qualification to employ foreign teachers. the school was ordered to suspend business for rectification and fined, and foreign teachers were ordered to leave the country within a time limit.

2. Credit and compliance records
Enterprises need to have no records of major violations of laws and regulations, including but not limited to:

• arrears of employees' wages;
• failure to pay social security;
• labor disputes have not been resolved;
• has been included in the "blacklist of labor security dishonesty".
  case : a manufacturing enterprise was rejected for recruiting foreign engineers because it did not pay the social security of its employees 3 years ago, and the enterprise was restricted from recruiting foreigners for 1 year.

2. job adaptation risk: how to prove "he must"?

1. Job Scarcity Argumentation
Enterprises need to provide evidence to prove that jobs cannot be filled by domestic personnel. Common methods include:

• Industry Report : quoting the "talent gap data" released by third-party organizations, such as the job gap in the field of artificial intelligence exceeding 500000;
• expert argumentation : invite industry association experts to issue job particularity description;
• project contract : transnational cooperation projects explicitly require foreigners to participate, for example, "the belt and road initiative" infrastructure projects require foreign legal consultants familiar with local laws.
  case : because an enterprise did not provide proof of job scarcity, its recruitment of foreign engineers was identified as "abuse of foreign employment indicators", and the enterprise was restricted from recruiting foreigners for 6 months.

2. The salary of foreigners must be in line with the market value of the job and must not be lower than the local minimum wage standard. For example:

• Beijing stipulates that the monthly salary of foreigners shall not be less than 7000 yuan (subject to the latest local standards);
• the salary structure should be transparent and the composition of basic salary, performance and subsidies should be clearly defined.
• "yin and yang contracts" are prohibited: if a low-salary contract is signed to reduce social security payment, high bonuses will actually be paid.
  case : a foreign enterprise was ordered by the labor department to reissue the difference and pay compensation because the salary paid to foreign employees was lower than 40% of the market price, thus damaging the reputation of the enterprise.

3. visa and work permit risk: "pass" for legal employment

1. visa type selection error
common misconceptions include:

• use B visa to engage in substantive work :B visa is limited to short-term communication (such as technical training and market research). a consulting company allows foreign employees to participate in project development with B visa, if it is found to be illegal employment, both the enterprise and the employee will be punished.
• z visa did not change residence permit in time : foreign employees are required to apply for work permit and residence permit within 30 days after entering the country with z visa. an enterprise did not handle it in time, resulting in employees being restricted from leaving the country.
  suggestion : choose the visa type according to the employment period, give priority to Z visa for long-term full-time positions, and high-level talents can apply for R visa (recommendation letter from provincial government is required).

2. Missing work permit application materials
Core materials include:

• Business license and employment contract;
• resumes, academic qualifications and certificates of no criminal record of overseas personnel;
• certification materials for job scarcity.
  case : an enterprise failed to provide notarization of foreign employees' academic qualifications, resulting in the return of the application for work permit, delaying the employee's employment for 2 months.

3. License change and write-off lag

• change situation : When position, salary, work place change, need to apply for renewal of work permit within 10 days;
• cancellation obligation : after the employee leaves office, the enterprise needs to cancel his work permit within 10 days, otherwise it may affect the subsequent employment qualification of the enterprise.
  case : a foreign enterprise failed to cancel the work permit of the former foreign employee, resulting in the employee's illegal employment in other enterprises with expired permit, and the enterprise was fined and suspended for 3 months.

4. labor contract risk: a "legal moat" for defining rights and obligations

1. The necessary terms of the contract are missing
According to the regulations, the labor contract should contain the following contents:

• basic information of the enterprise and employees;
• contract period (up to 5 years);
• job content and location;
• working hours and leave;
• salary and payment method;
• social insurance and welfare benefits;
• contract cancellation and termination conditions;
• liability for breach of contract and dispute resolution.
  case : an enterprise was found to have violated the law when dismissing a foreign employee because the contract did not stipulate the conditions for dismissal during the probation period and had to pay compensation.

2. Language version conflict

• The contract must be written in Chinese and accompanied by a foreign translation. Both texts have the same effect;
• It is agreed that "in case of conflict between Chinese and English versions, the Chinese version shall prevail";
• Avoid using vague expressions, such as "high salary" and "generous treatment.
  case : a multinational team did not specify the right of language interpretation in the contract, and the Chinese and foreign employees had differences in understanding the terms, causing labor disputes.

3. Confidentiality and non-competition vulnerability

• scope of confidential information : specify customer list, technical plan, financial data, etc;
• non-competition period : the enterprise shall pay economic compensation for no more than 2 years after leaving office;
• standard of compensation for breach of contract : if the actual loss or the agreed amount (e.g. 500000 yuan) is higher.
  case : a technology company failed to agree on compensation for non-competition, resulting in foreign employees joining competitors after leaving their jobs, and the company was unable to hold them accountable.

5. social security and tax risks: avoiding damage to the "purse"

1. Incomplete social security payment
Enterprises need to pay pension, medical, work-related injury, unemployment and maternity insurance for foreign employees. An enterprise has not paid work-related injury insurance for foreign employees, and employees have to bear their own medical expenses after work-related injury, and the enterprise is awarded compensation.
suggestion : check the social security payment records regularly to avoid missed payment and underpayment.

2. Individual tax withholding violations

• Foreigners are required to pay individual tax according to "comprehensive income" or "business income", and enterprises are required to fulfill their withholding obligations;
• Use tax treaties to avoid double taxation: tax treaties with some countries (e. g. Germany, Singapore) can reduce or exempt individual taxes.
  case : an enterprise did not take advantage of the Sino-German tax agreement, resulting in foreign employees paying individual taxes repeatedly, causing complaints and affecting the reputation of the enterprise.

6. the risk of cultural integration: reduce the probability of "acclimatization"

1. Communication style conflict

• German employees tend to communicate directly, while Japanese employees pay attention to euphemism;
• Brazilian employees are used to flexible working system, and Singapore employees strictly abide by attendance.
  suggestion : clarify the enterprise communication standards through induction training, such as "email should be replied within 24 hours" and "meeting should be present 5 minutes in advance".

2. Differences in work habits

• Western employees focus on personal achievements, while Eastern employees emphasize teamwork;
• Employees in some countries are sensitive to overtime (e. g. France, Sweden).
  Case : A multinational team did not evaluate cultural differences, and the project was postponed for 3 months due to frequent conflicts between Chinese and foreign employees in decision-making methods.

3. Insufficient team integration support

• Provide cross-cultural training: introduce local culture, enterprise system and cross-cultural communication skills;
• Provide local tutors: assist foreign employees to adapt to the working environment;
• organize team building activities: such as festival celebration and team development.
  case : a technology company reduced the turnover rate of foreign employees from 40% to 15% through the implementation of the "3-month cultural adaptation plan.

Conclusion: Compliance and inclusion are the "double insurance" for recruiting foreigners

The recruitment of foreigners should be based on "compliance, adaptation and integration". Enterprises should establish a full-process risk prevention and control system, from qualification review, job demonstration, visa processing to cultural integration, to systematically avoid employment risks. Through refined operation, enterprises can maximize the value of foreign talents and provide continuous impetus for globalization strategy.