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Social Security China

This is how social insurance is regulated in China: Anyone who goes to China as an employee or entrepreneur must at least be insured against medical expenses there. Since the local standard hardly meets Western requirements and advance payment is required for all treatments, as a foreigner you need appropriate additional insurance even if there is sufficient insurance in your home country.

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Secondment model and social security in China

In view of the social security agreement concluded between China and Germany, the posting of workers to China usually takes place over a period of 2 to 4 years.

This applies to Germany, but China has not concluded such an agreement with Switzerland. In relation to Germany, the first four years of a posting are considered as if the employee were employed in Germany. However, the agreement only applies to pension insurance and employment promotion, but not to health and nursing care insurance.

Since statutory health insurance generally does not provide any benefits in non-European countries, the employer pays first in the event of illness. The same applies to family-insured relatives who accompany the employee abroad or visit him there. The employer can claim the costs back from the statutory health insurance company to the extent that they would be reimbursed if the treatment were carried out within Germany.

There is no agreement between Switzerland and China on social security in China. If you work for a Swiss employer and have previously been insured for at least five years in the compulsory insurance for employees, you can continue to pay there during your stay in China - with the consent of the employer and employee. However, additional social security charges may apply in China.

Transfer model and social security in China

If the assignment abroad takes place as part of the transfer model, social insurance in China is based on the contract between employer and employee.

In the case of dormant domestic contracts, German social insurance generally only exists on a basic basis. Since no remuneration is usually paid during the assignment abroad, no contributions are paid to the social security institutions. A new employment contract is concluded with the Chinese subsidiary.

With regard to social security, the agreement between Germany and China is no longer applicable. Apart from special exceptions, Chinese law will apply exclusively from now on. The parent company is released from its employer obligations and thus from liability.

Jürgen Bächle
Jurgen Bachle

has been working as an independent tax consultant and expert in international tax law since 1989 and has been a member of the board of the German Association of Tax Consultants Baden-Württemberg, DSTVBW, for over 20 years.

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