MILAN, Aug 27 (Class Editori) – "We will send an Italian general manager to the new plant in Suzhou, what will be the fiscal impacts?"; "What if an Italian citizen is hired by a Chinese company? How have INPS contributions to be handled?" These are just some of the questions that ECA Italia experts have to answer almost daily during the management of the internationalization of human resources.
International mobility is, in fact, an increasingly critical factor for the success of companies competing in the global market. Since 1994, ECA Italia guides Italian companies in the world and further 150 companies along the Silk Road.
The ECA Italia observatory certified that in 2018, 10% of the Italian expat population was living in China, a fact that highlights the importance of turning to a company which knows the Chinese market and its regulations to better protect their interests.
The expatriation experience in China is currently less attractive than 10 years ago, due to the increasing cost of living and increasingly complex tax and social security legislation. Anyway, demand is supported by the need for specialized skills on site and by the growing number of new companies aiming at that market.
That is why companies are searching for flexible solutions for assigning their managers and specialists in China, even if the Chinese context tends to favor medium-long term assignment solutions, or as local foreigners or self initiated expatriates, people who decide independently to move to China.
One of the main challenges is to manage the typical benefits of expatriation, housing, schooling for children, pension plans and adequate insurance cover, critical elements in attracting and retaining resources.
ECA Italia organizes meetings and seminars on these issues, with the aim of sensitizing the Italian entrepreneurial companies on strategies and opportunities to manage its personnel in China, with particular regard to the social security theme.
Lacking a Social Security Agreement between Italy and China, Law 398/87 provides for the Chinese companies, which hire Italian citizens, the obligation to continue to pay for contributions to the compulsory Italian pension system, through the appointment of an Italian pension representative. In this way, a Chinese company can provide its Italian local foreigners with an additional benefit: continuity of contributions and access to the Italian pension benefit in constant employment with a legal entity under Chinese law.
This business model, localization in China and activation of social security representation, cannot be part of the ‘toolbox’ of human resource managers, considering the benefits also in terms of cost: the mandatory contribution in Italy pursuant to Law 398/87 (on a conventional basis and with a tax credit of 10% of the contributions paid by the company) it is in fact more advantageous also compared to other private international pension solutions.
ECA Italia, for its contributions in this sector and for the renowned knowledge of the Chinese operating context, has received numerous awards, among which the China Awards 2018 stands out in the category "Creators of Value" for services in terms of mobility of resources human.
(Source:Class Editori)
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