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Global Mobility: What points should be considered when sending employees to China?
Embarking on a move to one of the world's most dynamic markets usually begins with a mixture of euphoria and a long to-do list. But while packing suitcases and saying goodbye to friends are the emotional focus, the real challenge lurks in the bureaucratic depths of German-Chinese legal relations. An assignment to China is not simply an extended business trip request, but a highly complex personal project . Those who underestimate the administrative burden risk not only their careers, but in the worst-case scenario, their legal status in the host country. At a time when the digitalization of migration administration in Germany often lags behind, while China relies on total technological surveillance, we as a law firm must emphasize: meticulous planning is the only protection against costly risks.
The contractual architecture: the foundation of your security
The first and most important decision is made at the desk in Germany, long before the flight is booked. The fundamental question arises: which contract model should be chosen? In our consulting practice, we frequently observe that the classic secondment arrangement, where the German employment contract simply continues, reaches its limits. Often, a combination of a suspension agreement for the German contract and a concurrent local Chinese employment contract is the more legally secure option. This is particularly relevant for complying with the requirements of Section 2 of the German Employment Contract Law (Nachweisgesetz - NachwG) , which demands clear information about the place of work and the currency of remuneration. A properly drafted secondment agreement must include provisions regarding compensation, including foreign allowances, the reimbursement of relocation expenses, and, above all, a clear return prospect. Without a legally binding return clause, skilled workers are often left in limbo after two years , which represents an unnecessary career risk, especially for highly qualified talent.
Visa and residence permit: When mistakes force you to leave the country
In the current migration policy debate, the focus is often on facilitating immigration to Germany, but the reverse route to China requires equally meticulous preparation. A simple business visa is completely inadequate for a two-year stay . A Z visa is required , which must then be converted into a work and residence permit ( Foreigner's Work Permit and Residence Permit ). We repeatedly encounter situations where documents such as university degrees or police clearance certificates have not been certified or legalized in time. In China, the administration is now highly digitized; discrepancies in the system are immediately apparent. Anyone working without the correct status risks not only hefty fines but also immediate deportation and a long-term entry ban. For a skilled worker with an academic background, such a blemish on their resume is virtually impossible to repair.
Social security: The German safety net in a distant land
A key aspect of our consulting services is maintaining social security coverage. Thanks to the German-Chinese social security agreement, seconded employees can remain in the German pension and unemployment insurance system for up to 48 months. This is a significant advantage that greatly facilitates their subsequent reintegration into the German labor market. However, caution is advised: the agreement does not cover health and long-term care insurance . We often criticize the lack of information provided by employers regarding this. It is essential that employees take out private international health insurance that also covers repatriation in case of emergency. The mandatory Chinese contributions to local health insurance often do not provide the level of care that would be appropriate for highly qualified professionals .
Tax law pitfalls and the double taxation agreement
Once a stay in China exceeds 183 days, the right to tax income generally shifts to China . While the double taxation agreement (DTA) between Germany and China aims to prevent double taxation, its practical implementation requires a delicate touch. We strongly advocate the so-called tax equalization model , where the employer ensures the employee is financially treated as if they were still paying taxes in Germany. This prevents complex Chinese tax progression from diminishing the attractiveness of international assignments. It is particularly important to correctly declare tax-free salary components such as housing allowances or school fees. An incorrect tax return in China can quickly lead to legal problems for both the expat and the company .
Conclusion: Strategy instead of chance
In summary, a two-year assignment to China is far more than just a professional challenge. It's a high-wire legal undertaking that can only succeed with a solid safety net of contracts, insurance, and tax planning. Those who ignore the points outlined here are walking a tightrope between career boost and personal disaster. As a law firm, we strongly advise against viewing such assignments as mere HR routine tasks, but rather as a strategic investment in the global mobility of your best talent.
