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Employer Moving Contract

I'm planning a move to Shenzhen around August '18 for about a year for work.  I'm the first one my company is relocating from the U.S. to China so I don't prior relocations to rely on for suggestions on what to include in my contract.  What type of benefits should I be looking for in my moving contract?  I'll have the standard company benefits but am interested in things around housing and transportation.  I'll be moving with my wife, no children with us.

I would suggest that you draft a two year (not one year) contract.

You need to include this;

1. The company will handle all work visa issues in order to provide you with a Z-visa. You will need this in order to work in China. It will be your companies' responsibility. But you will need to assist them in doing this. You will need to apply. You will need to take the physical. You will need to collect the documentation. The company will need to pay the costs.

2. The company will provide you with a housing allowance that will assist in all living expenses for you and your family. This will cover rent, utilities, management fees,etc. For SZ, this should be around 2000 RMB (typical for a teacher) up to 10,000 (typical for an expat senior manager). Your costs will depend on who you are and what you expect. If you want to live like an American in SZ, then you will burn through money quickly. If you go local, you can save...save... save.

3. They will provide you with expat medical insurance for you and your family. There are some good resources here in expat.com that can provide this insurance for you. Just post in the forum ; "looking for expat insurance". They will contact you.

4. They will provide you with an allowance for all WORK RELATED travel expenses. There will be expenses associated with your work. Do not fall into the most common expat trap; mixing the two. Keep track of all expenses. Chances are that your boss will not understand your need for various services.

5. Airfare to and from China for you and your family.

6. A guarantee that you will get all Chinese holidays off. This will be one week off for Chinese New Year, One week off for Dragon boat festival. As well as the the few other odd holidays. You can negotiate whether or not you will be paid or not during these periods. If you do not add this, then you will be the only one working when everyone else is off. Chances are even your office building will be locked up tight as a drum and you won't be able to get in.

7. A guarantee that you can take Christmas and Christmas eve off. As well as what other American holidays that you wish to include.

8. Be careful with taxes. Have the company pay you as a 1099 instead of a W-2 employee. You will need to pay Chinese AND USA taxes.

I would advise you not to get too greedy in what you ask for. You are from the States and working for a USA based company, I would advise you this TWO TIMES.  So take note. It has been my experience that most American companies have their head in the sand about other cultures and working overseas. Heck, half of them don't understand time differences.

Best of luck.

Thank you VANNROX.  This is very helpful.

Also...

Make sure that there is a termination clause in the contract that protects you. If your company chooses to lay you off, or otherwise break the contract, that they must abide to Chinese and not American law. Otherwise you will be discarded like a piece of debris. This should cover expenses related to closing out your visa, breaking your housing contracts, and other issues.

Hi RWARREN and VANRROX. 

Mind me make a few comments on taxes. 

In China, an expat can either be an employee or a contractor.  As an employee, you would have to have an employer that is registered with Commerce Bureau in China. which means your US employer needs to hire local experts and register a subsidiary in China.  It is somewhat costly to your US company.

On the other hand, you can register your own company in China.  And sign contract with US company and receive contract pay in China wired from US.  You'll get used to the paper work in China after a while.   Accountants in China can be very helpful. 

This 2nd choice is like 1099-Misc receiver in US, except there is no 1099 in Chinese tax regulations.  There is no social security tax, nor doubled SE social security taxes.  You do need to include your oversea income on 1040, but you get a nice foreign income exclusion up to $102K in 2017. 

Pros and cons either way. Good luck.

PS,  I'm retired in US and moving to Zhongshan this summer.  I am not a tax professional,  this is only based on my own personal experience.

@zhongshan2018

Good info. I would advise that @Rwarren setup a WOFE. The WOFE would be an agent of his home company. Then just follow the laws for all.

In all cases, you will need a local to do the accounting and paperwork. In my company, I have a girl that does all of this. It seems like every other day we have to stamp a document or two, run to the bank, or update our certificates. So, it is very important to utilize local support. It need not be expensive. I pay my employee 4000 RMB / month for this task and her title is Accountant / HR Manager.

Thanks zhongshan2018 and VANNROX.  I'll bring this up with the company.  I don't know if any of this has been considered yet.

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