👷 Labour disputes · Awareness case
Non-Compete Clauses in Chinese Employment Contracts for Foreigners · Yalla China
🤝 Governing law: قانون عقد العمل / Labor Contract Law of China (2007) Arts. 23-24
The Labor Contract Law (2007) permits non-compete clauses but sets strict limits: a duration not exceeding two years and monthly compensation of no less than 30% of the salary.
Illustrative, general educational examples — not real specific facts and not legal advice; for awareness only. For an actual situation, consult a licensed lawyer.
Articles 23-24 of the Labor Contract Law (2007) regulate non-compete clauses: (1) Can only be applied to senior employees, managers, and holders of strategic knowledge; (2) Maximum duration: two years after contract termination; (3) Compensation: no less than 30% of the average monthly salary over the previous twelve months; (4) Geographic scope: must be specific and reasonable. If the employer fails to pay compensation for more than 3 months, the employee has the right to leave without penalty. The same conditions apply to foreigners working in China.
🎓 The lesson / takeaway
Always negotiate non-compete terms before signing. If compensation is not paid, the clause is legally voidable.
🕒 Updated: 16 March 2026