The Ministry of Human Resources and Social Security issued the Tentative Measures for Social Insurance Enrollment of Foreign Employees in China (Draft for Comments) (the "Tentative Measures") on June 10, 2011.

The main contents of the Tentative Measures are as follows:

1.- Scope of Application

A company together with its foreign employee shall pay the social insurance in one of the following cases:

1. A foreign employee working in a company, public institution, non governmental organization, private non-enterprise unit, foundation, law firm, or accounting firm which is legally established in China;
2. A foreign employee working for a foreign enterprise and is being dispatched to the branch or representative office of the foreign enterprise which is legally established in China.

2.- Social Insurance Benefits

2.1 Withdrawal of Social Security Amounts

If a foreign employee submits a written application, the amount in his/her individual account can be paid back to him/her and the relationship of the social insurance will be terminated.

2.2 Reserve Social Security Amounts

If a foreign employee terminates his/her labor relationship before the retirement age has been arrived, his/her individual account of the social insurance will be reserved, and if he/she continues his/her labor relationship in the future, the years of his/her payments of the social insurance will be continued and accumulated.

3. Inheritance

If a foreign employee dies, the amount in his/her individual amount can be inherited by his/her successor.

4. Dispute Resolution

If there is a dispute regarding the social insurance between a company and its foreign employee, the mediation, arbitration or lawsuit can be raised by either party.

The Tentative Measures are only a draft for comments. If it is adopted and promulgated, the expenses of the company, the branch or the representative office will be increased, since the company, the branch or the representative office shall pay part of the social insurance for its foreign employee. However, the detailed measures of the social insurance for foreign employees, including but not limit to the percentages to be paid by the company and the foreign employee, the age of retirement of the foreign employee, or whether the social insurance is mandatory or voluntary, will be clear after the Tentative Measures is promulgated.