Discover key changes to immigration regulations in Chile, China, New Zealand, and Vietnam.
NEW ZEALAND | “Kiwis-First” Immigration Policy to Bring Changes in August
Somewhat eclipsed by all the media hype surrounding the announcement of major immigration reform in neighboring Australia, New Zealand’s Immigration Minister Michael Woodhouse announced his own government’s new “Kiwis-First” immigration policy and upcoming reforms to the country’s employment-based visa and work/residence permit system. Like the Australian changes implemented last week, the New Zealand reforms are aimed at reducing the numbers of lower-skilled immigrants and protecting the jobs of local workers. Unlike Australia, however, the announcement of the upcoming New Zealand reforms gives companies more notice, setting an estimated implementation date of mid-August 2017.
The changes, announced just one day after Australia’s declarations, will reform the rules applicable to both the temporary and permanent immigration streams. Announced changes to the temporary immigration stream include:
- Introduction of “remuneration bands” to determine the skill level for Essential Skills Work Visas (ESV) aligned with the remuneration thresholds of the SMC;
- Introduction of a maximum visa validity of three years for lower-skilled and lower-paid ESV holders, after which a 12-month cooling-off period must be completed before applying for another visa;
- Skill level of ESV holders to determine ability to bring dependent family members with them to New Zealand, with lower-skilled workers not being permitted to sponsor accompanying family members; and
- Adjustment of visa validity for some seasonal jobs to more closely track the peak labor demand.
Announced changes to the permanent immigration stream include:
- Introduction of two remuneration thresholds under the Skilled Migrant Category (SMC). The first threshold will be set at the New Zealand median annual income of $48,859 for skilled jobs, and the second threshold will be set at 1.5 times the median for well-paid jobs not on the skilled list; and
- Realignment of the SMC points-based table to place more emphasis on “characteristics associated with better outcomes for migrants,” including factors such as education, work experience, and age.
Like protectionist reforms taking place in Australia – and similarly in the United States, the United Kingdom, China, Singapore, and many other nations - these measures being taken in New Zealand were not entirely unexpected. Employment-based immigration to New Zealand has persisted at record levels over recent years, with more than 30,000 visas issued last year in both the SMC and ESV categories. While New Zealand businesses continue to complain about the difficulty of filling many higher-skilled positions, labor groups decry the stagnate wage growth in many lower-skilled positions; and striking the optimum balance between these competing interests has always been an elusive goal. Pro-Link GLOBAL will continue to monitor this evolving international business climate in New Zealand and report on developments as we approach implementation in August.
Immigration Changes from Around the World
CHILE | New Tech Visa with 15-Day Processing Coming
In the ongoing global competition to attract the world’s tech talent, Chile is upping its game with a new “Tech Visa.” Chilean President Michelle Bachelet announced the coming of the new visa at a recent technology investment conference in Santiago. The new visa for foreign entrepreneurs and tech workers will purportedly fast-track visa approval in just 15 days, a major improvement from the typical several months for most other work visa categories in Chile. While exact details – including the anticipated implementation date – are expected to be rolled-out over the next several months, the applications process will reportedly involve foreign applicants arriving in Chile on a visit visa and applying for the tech visa in-country via an online application system. Pro-Link GLOBAL will continue to monitor the progress toward implementation and report on more details of this exciting opportunity for the tech industry.
With one of the most vibrant economies in South America and a government intent on attracting international business, Chile has quickly become an attractive destination for tech companies. In recent rankings, the World Economic Forum and the Economist Intelligence Unit ranked Chile 35th of 140 countries and 13th of 82 countries overall in global competitiveness and business environment, respectively.
Since its introduction in 2010, the successful Start-Up Chile business incubator program in Santiago has reportedly launched more than 1,300 foreign startups and provided them with financing, long-term visas, bank accounts, and office space. While much of its success has been in attracting early-stage start-ups, Chile’s increasing openness to immigrating foreign talent and its growing community of entrepreneurs and tech talent are beginning to attract the attention of established companies precisely at a time of concern over the future of corporate mobility in the tech hubs of the U.S. and UK. Pro-Link GLOBAL is continuing to closely monitor Chile as a rising country of opportunity for international business. Companies considering the opportunities in Chile are encouraged to reach out to our Client Relationship Team for more details.
CHINA | Process for Changing Employers in Shanghai Now More Difficult with Legalized Diplomas
The new nation-wide unified work permits process continues to undergo changes aimed at standardizing application requirements for work authorization in China, and Shanghai remains ahead of the pack in introducing the reforms. This week, Pro-Link GLOBAL’s Shanghai Office reports that foreign nationals applying to change employers through the Entity Amendment process are increasingly being required to authenticate their education diplomas by legalization before submission in support of their applications. As always, legalization can be a time-consuming step, adding one to six weeks to the overall process depending on the document’s country of origin. Immigration authorities are in some instances requiring legalization to be performed by the Chinese consular post for the applicant’s country of residence, while others are accepting legalization by the home country’s consulate in Shanghai. This is bringing the overall processing time for Entity Amendment cases from initiation to obtaining the new work and residence permits to more than three months. Foreign nationals considering a change in employers are encouraged to reach out to their immigration specialists as early as possible to minimize any delays.
Reportedly, this requirement has only been implemented in Shanghai at present; however, it is expected to soon follow in Guangzhou and Shenzhen. The transition to the new work permits system in China is expected to produce improvements to the application process in the long-term, but in the short-term, it is currently resulting in a more challenging and time-consuming procedure for immigration specialists with frequent technical glitches and immigration authorities still unaccustomed to the new system. While the new system was piloted in eight provinces since November of last year, it was just rolled-out nation-wide on April 1. For a comprehensive guide to the new work permits system, download our free e-book here and watch for announcement of our upcoming China webinar slated for later this month. For details on the numerous recent changes specific to Shanghai, see our Global Brief of March 16 and Immigration Dispatches of April 3 and March 27.
VIETNAM | Ramifications of Decree 11 for Intra-Company Transfers (ICTs)
Vietnam’s expansive Decree 11 – which, on its face, made broad changes to the country’s work permit rules – officially came into force on April 1 of last year. However, the corporate mobility industry waited until mid-December for the Ministry of Labor, Invalids, and Social Affairs (MOLISA) to finally issue Circular 40 implementing the changes and giving specific guidance on its multiple ramifications. Even after the release of Circular 40, questions persisted, and MOLISA held workshops through early this year for HR managers and immigration specialists during which they issued additional verbal guidance and clarification. For more discussion of the wide-ranging changes brought by Decree 11 and Circular 40, see our Global Brief of March 3, 2016 and Immigration Dispatches of December 19 and January 23.
One aspect around which there has been some confusion is the extent to which Decree 11 and Circular 40 impacted the rules regarding work permits for Intra-Company Transfers (ICTs) to Vietnam. Most directly, Circular 40 clarified that applicants must be employed for at least 12-months by the foreign sending company when applying for a work permit as an ICT, and applicants not meeting this criterion would be required to apply for the work permit based on an employment or service contract with the related Vietnamese company.
Circular 40 has now also clarified the corporate relationship requirements between the sending and host companies for ICTs. Namely, MOLISA does not consider a foreign company sending an employee on assignment to a related Vietnamese company an ICT unless the foreign company is a parent of the local company and holds stock or shares in the local Vietnamese entity. Thus, assignments of employees between a foreign company and a local company owned by the same parent company are not considered ICTs. In such instances, the foreign employee must either be subject to a service agreement between the companies, or be placed on a local employment contract – or a supplemental local employment contract along with their primary employment contract with the foreign company.
While this is perhaps a narrower definition of an ICT assignment than that used in many other countries, the distinction makes little difference in Vietnamese immigration and is more esoteric than substantive. For the purposes of applying for a work permit, there is little difference between the application process and requirements of a work permit based on an ICT and a work permit based on a local contract. Therefore, at present, the determination as to how to structure the agreements regarding the assignment of an employee from a foreign company to a local company should be made based more on business concerns than immigration nuances.
With that stated, however, the distinction between an ICT and a local hire may become more significant in coming months. Pro-Link GLOBAL is aware that MOLISA has in recent weeks disseminated a draft circular which, if implemented, would require foreign nationals on local employment contracts to contribute to Vietnamese social security in a similar manner as Vietnamese citizens. Still in a draft stage, such a circular will not likely to be adopted prior to the start of 2018. However, we are continuing to monitor the possibility and advise our clients accordingly.
The above issue is a case-in-point that international employee assignments are a complex business – crossing (and sometimes blurring) the lines between immigration law and labor law, in addition to impacting practical business concerns. That is why involving a qualified immigration specialist early in the planning stage of all international assignments is important, and getting expert guidance that carefully evaluates all aspects of the process is critical.
Caveat Lector | Warning to Reader
This is provided as informational only and does not substitute for actual legal advice based on the specific circumstances of a matter. Readers are reminded that Immigration laws are fluid and can change at a moment's notice without any warning. Please reach out to your local Pro-Link GLOBAL specialist should you require any additional clarification. This alert was prepared by Pro-Link GLOBAL's Counsel and Knowledge Management teams. We worked with our PLG | KGNM Vietnam Offices “Asian Tigers Mobility Limited” and “Orientations” to provide you this update.
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