German Employees in China: Secondment Legal Guide

German companies frequently send employees to China on secondment. This guide covers the legal requirements and practical considerations.

Work Authorization

Work Permit Requirements

German employees need:

• Work permit notification letter
• Z visa for entry
• Work permit card after arrival
• Residence permit

Qualification Requirements

• Bachelor's degree or equivalent
• Relevant work experience (usually 2+ years)
• Clean criminal record
• Health certificate

Social Insurance

Germany-China Social Security Agreement

The bilateral agreement allows:

• Exemption from Chinese pension contributions
• Certificate of coverage from German authorities
• Continued German pension contributions
• Other insurance types still required in China

Required Chinese Insurance

• Medical insurance
• Unemployment insurance
• Work injury insurance
• Maternity insurance

Tax Considerations

Individual Income Tax

• Tax residency rules (183-day test)
• Progressive rates up to 45%
• Allowances and deductions available
• Tax equalization arrangements common

Double Taxation Agreement

The Germany-China DTA provides:

• Relief from double taxation
• Reduced withholding rates
• Tie-breaker rules for residency

Employment Structure Options

Direct Employment

Employee hired by Chinese entity:

• Local employment contract
• Subject to Chinese labor law
• Full social insurance enrollment

Secondment

Employee remains with German employer:

• Secondment agreement
• Cost recharge to Chinese entity
• German employment relationship continues

Practical Considerations

• Housing and relocation support
• School fees for children
• Home leave provisions
• Repatriation arrangements