How to work legally in Shanghai?

In China, employers are only permitted to hire foreigners who possess a valid Foreigners' Work Permit. Foreign nationals entering China with a Z visa must obtain both a Foreigner's Work Permit and a residence permit before commencing employment. Those without residence certificates (holders of F, L, C, and G visas), foreign students, interns, or accompanying family members of work visa holders are not authorized to work in China.

Foreigners found working illegally may face fines ranging from 5,000 yuan ($695) to 20,000 yuan. Serious offenders may be detained for 5 to 15 days and could be required to leave China within a specified timeframe.

Contracts between employers and foreigners should not exceed 5 years. Upon contract expiration, the Foreigner's Work Permit becomes invalid. Employers must apply for the extension of the employment and work permit within 30 days before expiration. The work permit must undergo annual inspection, which should be completed within 30 days before the end of each year. Failure to do so will result in the work permit becoming invalid. After the work permit extension, foreigners must, within 10 days, visit the public security office to apply for the extension or modification of the residence permit.

If a foreigner becomes ineligible for residence, the employer is required to terminate the labor contract, and the labor department will revoke the work permit. In the event of contract termination, the employer must promptly notify the labor and public security departments, return the foreigner's work permit and residence permit, and complete the necessary exit procedures at the public security office.


Source: Regulations on the Employment of Foreigners in China