Are business visa runs in China worth the risk?

Interesting discussion over at china law blog about one of the worst kept secrets of foreign companies in China. So many Expats are on a cycle of never ending short term business visa's. This is a huge risk to international employers because, apart from the compliance concerns, your key staff have a chance of being denied re-entry every 3 months.

The impact was particularly visible during the Beijing Olympics when a temporary clamp on business visas left many expatriates on unexpected holidays outside the PRC. Given the Chinese government is prone to arbitrary decisions do you want to expose your business to the risk that key staff won't be able to enter for work?

Why don't more Expats in China get a work permit?

This is a puzzle to us, because clients should be enforcing full compliance on their staff. After all the risk is of fines and punishment for the employer, as well as the staff member being denied entry to China. Z Visas are easy to obtain whether directly through a Wholly Owned Foreign Entity (WOFE) or through a contractor management structure / Professional Employer Organization (PEO).

We recently helped a financial services software provider to set up their first staff in Shanghai through subcontracted employment with our local partner. It's a short term PEO solution that allowed them to assess local prospects with minimal overhead, and provides an easy transition to establish a WOFE and bring everything back in-house.

Most importantly they are meeting their global HR dictum of full compliance and their clients aren't exposed to the risk of consultants with business visas working on site.