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Retirement for Expats in China

Author: Jason Zhou
Submitted: August 2013

Retiring to China

You may wish to live in China after retirement. However, bear in mind that you may need a visa to stay there permanently. 

If you do not hold Chinese citizenship but want to live in China for a long time, you will need a visa. Generally there is not a specific visa for people who would like to retire to China, yet you can still retire there through other routes. For example, you can obtain a permanent resident visa if you meet certain requirements.

If you have retired in another country but want to move to China, you should have directly invested in China for at least three years and have a good tax record. The investment must be no less than US$2m when investing in the PRC (Peoples Republic of China). The threshold is US$1m if you invest in middle China and  US$500,000 if you invest in western China or your investment is in an encouraged industry listed on "The Foreign Investment Industrial Guidance”.

If you are working in China, you may also apply for such visa. The requirements are as below:

  • You should hold a qualification of deputy professor or higher,
  • You should has been working in China upon such qualification for more than four years,
  • You should have been in China for at least three years in the past four years of working immediately before your application, and
  • You should have a good tax record.

If you are the spouse of a Chinese citizen or a person who has obtained a permanent resident visa, you can also apply for such visa providing you have been married more than five years and you have been continuously living in China for five years. 

If you still hold a citizenship and retired in another country, there is no restriction on you living in China.   You may need to apply for a visa before you go to China if you do not register as a member on a Chinese Household Registration Book.  

Normally you would not receive a state pension unless you have paid pension contributions in China.  There is no free universal medical coverage provided in China, the national health system is purely a user-pay system. Therefore, you would need to pay your healthcare expenditures unless your employer has paid medical insurance for you in China.

Retiring in China

The minimum retirement age in China is 60 for male and 50 for female, provided they have worked and paid social security contributions for at least ten years. It has been reported that the retirement age will be increased by five years for both male and female employees.

There is no compulsory rate of contribution employers should pay into the Basic Pension Insurance Fund (BPIF). The suggested rate is no more than 20% of the total employees’ salary payments. Employees must pay a minimum contribution of 8% of relevant income to the BPIF.

Under 2010 legislation, foreign workers have nominally been subjected to the same contribution requirements as Chinese citizens from 1 July 2011; the law was not put into effect until 15 October 2011. Foreign workers making employee contributions are entitled to all social security benefits which include pension, medical, unemployment, maternity and work-related injury benefits.

Most people would like to maintain their pre-retirement standard of living. However, many of them find their savings will not last as long as they expect. There has been a trend in Chinese policy to either encourage individuals to save for their own retirement or compel contributions into long-term savings plans intended to provide retirement benefits. This policy is largely implemented through the taxation system in the form of tax concessions for contributions to retirement savings plans and concessional tax treatment of retirement benefits when they are finally paid out.

 

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