Companies Do Not Want to Settle in Shanghai: Age Limits and Taxes Deter Foreign Talent

Companies Do Not Want to Settle in Shanghai: Age Limits and Taxes Deter Foreign Talent
Sep 29, 2015 By eChinacities.com

Editor's Note: Shanghai is many multinational companys' Asia-Pacific base of operations. It is an economic watering hole of the global village for many reasons including maintaining a favorable investment and policy environment, its efficient infrastructure as well as its abundance of domestic and overseas talent. However, some businesses are turned off by Shanghai's burdensome visa process and high income taxes. The article details on issues some foreign experts want to see improved.

Foreign employees in Shanghai are generally satisfied with their overall work conditions. A Shanghai professional association recently surveyed foreign employees from 75 different companies. Foreign workers are happy working in Shanghai, but also have a number of concerns. From the survey results, it is clear that there is room for improvement. What innovations can Shanghai implement in order to attract top international talent and how can the city make itself more attractive for foreign workers?

High Taxes and Annoying Visa Paperwork

78.7 percent of survey respondents believe that taxes and cost of living in Shanghai are too high. This was a major issue for many respondents. 77.3 percent of respondents said that Shanghai should implement tax incentives to make itself more attractive for businesses. Many developed countries use this practice to encourage business growth.

69.3 percent of respondents think that personal income taxes in China are substantially higher than in other countries. In addition, they believe that protection under law, and protection of individual rights should be increased for foreigners in order to attract top talent to Shanghai.

Foreign employees in Shanghai also have some issues with visa access and procedures. 38.7 percent believe that there is too much paperwork in the visa process and that the renewal process is cumbersome. There is also room for improvement in terms of support for residence permits and employment visas.

Shortages for a Foundation for Innovation

In terms of investment and innovation, 66.7 percent of respondents believe that the environment for startups, and research and technology, needs to be further improved in Shanghai. Shanghai should enhance support for research in tech, and strengthen its startup infrastructure to create an environment for innovation. In addition, Shanghai should strengthen the protection of intellectual property rights, and foster an atmosphere that encourages academic exchange.

Shanghai currently has shortages in terms of foreign talent in three categories: technical personnel, research and development, and management talent. Technical talent is the most in demand, account for 63.3 percent of job openings. Management talent used to be easy to find in Shanghai, and is now more in demand than ever before.

The investigation team behind the survey proposed that Shanghai abolish the age limit for senior management personnel, expand family support for senior personnel, cancel the age limit for children accompanying senior management personnel, and technical personnel. As for the issue of high taxes, some experts have suggesting increasing tax limits for families.

Foreign Companies Face Issues

Apple’s vice president Philip Schiller said that the company will not be able to effective transfer most of its research and development personnel to its new offices in Shanghai. There are many factors in this decision, but the legal differences between the United States and China play a major role. Patent laws, and other related laws and regulations are different in China and the United States. This will make it different for Apple to find a foreign research and development team for its China office.

Philips president Frans van Houten had issues bringing his family with him to China when the company moved its global headquarters from the Netherlands to Shanghai. Van Houten’s wife and two daughters, accompanied him to China. However, one of his daughters was 20 years old, and could not enjoy visa support because she was over the age of 18.

Shanghai had an embarrassing issue with Ford when the company moved its Asia-Pacific headquarters from Singapore to Pudong. Ford’s president of the Asia-Pacific region, David Schloch, was over the age of 60, disqualifying him from a Chinese work visa. In China, people generally retire at 60, so work permits are not available to foreigners over the age of 60. Ford had to find a way to get around this frustrating barrier.

Source: iFeng

Warning:The use of any news and articles published on eChinacities.com without written permission from eChinacities.com constitutes copyright infringement, and legal action can be taken.

Keywords: Shanghai foreign visa Shanghai revise visa

8 Comments

All comments are subject to moderation by eChinacities.com staff. Because we wish to encourage healthy and productive dialogue we ask that all comments remain polite, free of profanity or name calling, and relevant to the original post and subsequent discussion. Comments will not be deleted because of the viewpoints they express, only if the mode of expression itself is inappropriate.

TonyGams

The greatest gift China has to offer is its people,all the free world has to do, is to except it's culture and reach.Enjoy a bowl of rice, given to you,don't expect to add what does not belong, except what is given and enjoy now.

Jan 14, 2016 10:24 Report Abuse

kuntmans

Westerners want to have their cake and eat it.The Chinese government should be easing up on these tax free allowances and company tax write offs to bring foreigners more in line with the taxes paid by locals. How else will services be maintained and developed. Those 20,000 U.S. dollars per year kindergartens and extortionate private hospitals might fade away but nobody would lament their loss.

Oct 01, 2015 16:27 Report Abuse

kuntmans

Where did China get all those trillions of dollars in foreign exchange reserves?

Oct 03, 2015 17:35 Report Abuse

The-Final-Say

This is an excellent article. Look, I get it that China wants to protect it's numerous citizens from being shut out of job opportunities due to foreign hirings, this is normal in any country, look at USA and what Trump has been saying for example. Nationalism in today's worldwide economy doesn't single out any country, least of all, China. But in a country with such deep rooted cultural behaviors such as men are still regarded as the main breadwinners, those men married to Chinese women are not entitled to any benefits like the same women have abroad in other countries, regarding work. It is a very dangerous game being played when a husband has to give his visa rights to a boss and the boss "uses the foreign face" long enough and then finds ways to cancel his visa without the wife or foreigner having much say. Families are being "legally" held at the whims of unprofessional bosses with hopes that said breadwinners can actually continue to provide for the sake of wife and child. This has to stop. In USA, the green card is very difficult to begin for Chinese and others but once they have their feet inside the country and the papers applied for, once they have the marriage license, they are able to begin work. I do agree that China should do enough to prove the quality of a worker, even as an expat, I would not want to be associate with the criminal element, actually knew a guy who didn't belong in this country do to his extra curricular nocturnal behavior.... I won't go into details as he had little to do with my life and he has since passed. But once an expat has done enough to prove his/her worth, and he/she is not taking away from locals, we should be able to have a fairly painless process. In China, as of today, there are two methods to get everything done.... 1) find someone in the know and shake hands and slip a red envelope or make an "arrangement based on mutual terms".... and 2) Play the go here, go there, waste time, turn around, do it again, get the runaround, and return to start, game before getting things done. Yes, the legal process is correct and will achieve the visa eventually, but the things mentioned in this article are all true. Last month, my buddy told me that he earned 16000RMB including OT in a third tier city, meaning not Beijing, Shanghai and Guangzhou, and not Dalian, Tianjin, or Xiamen level. In his hand, he took less than 13000 after the sticky hands government took their hefty gains. The government certainly is trying to pass their social security onto unsuspecting foreign experts to help cover up the lack of financial support for retirees coming soon as a result of the 1 child per family policy, meaning there will be less earners putting into the health care system for a few decades as mothers and fathers hit their retirement ages. This is fair in their mind but then they make visas so difficult and even keep benefits away from the Chinese spouses of the expat workers, so it defeats the purpose in my opinion. China is a unique country where the most workers from other countries would be in the education field and because they are in education, they are not really stealing positions from locals because a local will not simulate foreign accents, culture, and everyday phrases, in the same way the home people would, meaning we actually do the jobs we were meant to do and even help create jobs for Chinese managers, teaching assistants, and marketing crews. If the government does its research, and if it truly wants to improve the image and procedures, they should revise the policies to match the western styles, especially for spouses of locals but not only including them. Many expats do love China, not all but many. China is a nice country and though there are differences, once you get used to these differences, life is fairly easy to live here and fun. Most of the regular folks here treat us with respect and kindness. Furthermore, where else could you find a grocery store, hospital, every type of restaurant, dentist, night club, utilities office, and shopping mall, all within a short walk or bus ride from your home without the need to buy a car? Why not do more for the working class people here? Again, very useful article here.

Sep 29, 2015 09:46 Report Abuse

Karajorma

Hang on a sec. Your friend is complaining at being taxed at a 18% tax rate? Where the hell is he from that this is excessive? While I agree with most of the complaints in the article, I pay less tax here than I ever paid back home.

Oct 01, 2015 11:48 Report Abuse

Guest655508

i understand precisely what you mean, and am able to summarize it as follows -- "whereas abroad, the right to work is given to the person applying, in china it is considered an employer's right to request a foreign citizen to perform labour in their offices" the very fundamental key in this situation is that, in china, work permits are not the property of the applicant, and in fact do not have much to do with to underlying person at all. they are made for the employer, and requested by the employer first and foremost

Oct 02, 2015 04:43 Report Abuse

BlightyMatt

David Schloch, was over the age of 60, disqualifying him from a Chinese work visa. In China, people generally retire at 60, so work permits are not available to foreigners over the age of 60. Ford had to find a way to get around this frustrating barrier. And how was this done pray tell? Did it involve hongbao to the right pockets? Surely not!

Sep 29, 2015 04:35 Report Abuse

shroq

Shanghai had an embarrassing issue with Ford ؟

Sep 29, 2015 00:59 Report Abuse