Foreign professionals living and working in Shanghai will have to comply with recent changes made to the permanent residence application starting May 1, 2023. The Exit-Entry Administration Bureau of Shanghai Public Security Bureau informed that two important changes have been implemented in the criteria of the application process.
The first change is an increase in the annual salary and tax payment requirement. The second is the obligation to submit a non-criminal record in China, in addition to the non-criminal record in the home country of the applicant.
The additional non-criminal record requirement is also applicable to most other categories of people who are eligible for permanent residence application in Shanghai.
According to the Shanghai Exit-Entry Bureau, foreigners applying for permanent residency as working staff must have worked in Shanghai for the past four years, stayed in mainland China for at least six months every year, and earned no less than six times the average annual salary of urban employees in the previous year in the region for four consecutive years.
They must also have paid an annual individual income tax (IIT) of no less than 20 percent of their salary, in addition to other conditions, such as good health, compliance with Chinese law, and no criminal record.
Before the changes, applicants were required to have an annual pre-tax salary income exceeding RMB 600,000 (approximately US$94,000) and an annual IIT payment of no less than RMB 120,000 (approximately US$18,800).
The Shanghai Exit-Entry Bureau has not yet published additional details regarding the salary and tax payment requirements for the new permanent residence application criteria. Nevertheless, it seems that the new salary criteria will be higher than the previous requirement of RMB 600,000 (approx. US$94,000) per year.
Foreigners must have earned a certain minimum annual income for each of the previous four years, to apply for residency. In addition, applicants must pay an annual individual income tax (IIT) equal to at least 20 percent of their annual salary. This IIT requirement is also higher than the previous criteria.
The second significant change implemented by the Shanghai Exit-Entry Bureau is the requirement to submit a non-criminal record in China as part of their application documents. Applicants must provide the original and one photocopy of the Certificate of No Criminal Record in China, which should cover all passport numbers used by the applicant during their stay in the country.
Previously, applicants had to only submit a non-criminal record from their passport-issuing country or where they lived.
The changes to the application process will create difficulties for some professionals to qualify for permanent residency, in particular for those whose salaries are close to the limit. At the same time, the new document requirement will add one more paper to the already burdensome process.
For those who submitted their applications before May 1, 2023, the old criteria will still apply. They do not need to wait for another few years to meet the new salary and tax payment thresholds.
New applicants will have to fulfill the changed requirements. Professional assistance is recommended to avoid mistakes and misinterpretation of the updated criteria.
To learn more about our services in China, contact our Head of Business Advisory - Ms. Kristina Koehler-Coluccia at email@example.com. DISCLAIMER: All information in this article is verified to the best of our ability and is assumed to be correct at time of release; however, Woodburn Accountants & Advisors does not accept responsibility for any losses arising from reliance on the information provided within. The information provided is for general guidance and does not replace specialized advice.