We have recently moved to Shanghai and found an apartment to move into for the 1st of next month. We are here on an expat package. We have to pay US$1700 and the company pays the rest the rent.

The question is: how does this work? The company says, " you are going to need to sign the lease, and pay the rent. I will need a copy of the lease to forward to the company showing the monthly rental amount. They are going to then add the amount, after the US$1700 , to your paycheck."

My concern is that with the weakening dollar, we are going to be losing money when we pay the rent each month. When does the conversion from USD to RMB take place? I am afraid that when the company deposits the USD to us and we convert it we will actually be paying more in rent than the company has given us?

The entire process with my husband's company has been extremely stressful and I feel they have no concern for our welfare so I want to be sure we are not being taken advantage of (any more, at least).

Thanks as always. This is an invaluable resource!!!

Eggplantress

True, with this arrangement, everytime the rmb changes you are losing IF they are paying you in dollars. A couple of options you can ask about:
1. can all or part of the salary be paid in rmb?
2. can they pay the full rent and then deduct $1700 from your check? They may get a tax break on the money if they do it this way.

What is the upper limit on the rent? It seems you could rent a 800 sq. meter super luxury apartment for only $1700 with this arrangement. Also check to see if 'rent' includes utilities, cable, internet, furnishings, etc.

Our US based company pays the rent for us then deducts the dollar amount of our contribution - I think that is standard for expat packages with larger companies.

In your scenario just make sure that the RMB/$ rate is adjusted each month and that they pay the surplus rent at the current rate.

Avoid the scenario they presented if at all possible. Best bet is to have company sign the lease and then deduct your share from your pay. Reasons? Several.
1- Tax liability on the amount they pay you. Company paid housing is NOT taxable here so you will avoid added local tax exposure. This benefits the company as well as you.
2- Liability for lease falls to a local company rather than a foreign individual making landlord issues a company matter. Recent stories about a famous dragon-lady real estate broker here in Shanghai who FULLy leases her own HOMEs out to MNC's to try and milk the tennants with veiled threats has convinced me that as a new expat, it is best for the company to handle these issues as they have much more leverage over a potentially bad landlord.

^ BINGO, exactly what yu says here.... you're going to be taxed on that additional amount !!!

Your company is screwing you big time, research expat packages as much as possible and don't forget about tax equalization too.

You should never sign the lease. Company should be willing to do it, especially, if you are on expat package.

What if your husband is sacked? Get the contract signed by company. I have done this 6 times during last 10 years. And my employer has never had anything against it.