China and South Korea on Monday signed an agreement to avoid the dual payment of social insurance by visiting companies and workers, in a move analysts said would serve to open China up for increased foreign investment and talent flows.

The new deal, which will take effect in November, is expected to avoid Chinese and Korean employees paying two premiums for pension or unemployment insurance, when working in the other country, for a period of 13 years.

This marks the first bilateral agreement on social insurance signed between China and a foreign nation since China revised its social security law in September 2011. This revision requires all foreign workers to make contributions to a pension fund as well as medical, unemployment, work injury and maternity leave insurances, just as local employees in Chinese firms do.

China and South Korea also agreed to exempt locally hired foreign workers from pension and employment insurance payments for up to five years.

According to statistics from the South Korean Embassy in China, more than 300 billion won ($270 million) will be saved by South Korean enterprises and personnel working in China and 150 billion won ($135 million) of social insurance will be saved by South Korean firms hiring Chinese employees, People's Daily Online reported.

He Weiwen, an economics expert at the University of International Business and Economics, told the Global Times that this will make it more convenient for Chinese and South Korean firms to do business together.

"This will push forward bilateral exchanges of staff which will bring about more technical exchanges as the cost of sending employees to China is much lower than before," He said.

Large new communities of South Koreans have formed in Beijing, Shanghai, Dalian and Qingdao.

"The new deal will push forward free trade in the region," He said.

The bilateral agreement came after eight months of talks between the two countries, a model China is replicating with a dozen more countries to sign similar insurance agreements, following the implementation of the Chinese social insurance scheme, which took effect October 15 last year.

So far, both Chinese and South Korean employees have welcomed the deal, though some do not see the impact.

"I pay my social insurance in China and taxes in South Korea. I'm not quite influenced by the new deal since my pay level is settled in my contract but I imagine it will save my firm a lot," a Chinese employee working for a South Korean firm in Seoul, told the Global Times.