Freelancing in China
Can an expatriate do freelancing work in China? Is there any legal steps to take? How about creating invoices? Are there any tax implications? And do you need a work permit? If so, how do you obtain one? Pros and cons of freelancing as opposed to seeting up a company?
Thanks for your help!
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May 30th, 2008 at 3:18 pm
Officially it is not allowed to invoice directly in China. You should always use a import company. Anyway as far as I know you can receive up to 50.000 USD yearly without any questions from the authorities. But it is a littlebit gray area. Also you probably know at least 90% of all the transactions in China are black. Does your customer need a VAT invoice?
Otherwise it is possible to set up a foreign company in china like a FICE (foreign invested commercial enterprise.
Any question you can ask!
May 30th, 2008 at 9:09 pm
to work in china you need a residents permit and working visa, to get these you need a contract of employment froma chinese company. thats what you should do…thousands of people flout the law and work here on tourist/business visas
if you live here legally then you can earn 5000 rmb a month before you pay tax…the comment about receiving 50000 usd maybe refers to limits on remittances from overseas to a personal bank account in china
if you are going to teach english to individuals and get paid in cash then you can freelance…but recognise you’ll be here working illegally
if you want to design brochures for NOKIA you’ll need premises and a company to issue fa piao, VAT invoices, that formal companies require when they buy goods or services
look into setting up a consulting company…low registered capital, sell services not goods but not sure on the restrictions on foreign ownership of such businesses
a good chinese accountant can advise
June 10th, 2008 at 4:51 pm
Firstly the resson whay I’d like leave a comment here is that I was shocked by the sentence “Also you probably know at least 90% of all the transactions in China are black”.Actually I don’t know that,:)
Now come to my advices.That it’s strongly recommended foreign people do their biz in China in legal way is what I’m keep prescribing for my clients. If you have abundant capital to start, then a wofe is always the best choice. If no, you have to face huge risk. You see,many people failed because of lack of money to run their biz before they succeed.
Regarding to freelancing or sth like that,the key is invoice matters,if your clients don’t think it a must for you to issue invoice to them,you provide service, they pay you by cash,you have nothing to warry about. But very few biz like that.
My advice is that you cooperate with a lacal company if your client really need invice.Use the company’s invice, and share the profit with the company. Of course,it’s necessary that you are agree with that and know exactly what you are doing.
Actually I’d like to help those who are confident about their biz,I’k like to share biz opportunity with them also.I think this is the easiest way to conduct activity for feelancing people.You see, you don’t need a company of your own and you client doesn’t care who issue invice to them when you sell your service or product,and you are in a safe way,then whatelse do you want?
Finally I hope those freelancer can succeed in China!
June 17th, 2008 at 5:25 pm
I have a question on invoicing to a WOFI - a U.S. computer company with a subsidiary in China. Is there a withholding tax, and if so, how much is it? I’m selling management consulting, it will be in the USD$50K to $100K range over 2 years, starting in Aug. 2008. Also, is fa piao, VAT invoices, the term commonly used?
Thanks,
Marian
June 24th, 2008 at 2:52 pm
marian
if u are invoicing a WOFE then they should want a fa piao…I own a WOFE and I always want a fa piao or i dont pay my supplier. if, as I guess your are american then you will be liable for tax on earnings that you declare to the government, but there is no witholding tax from the chinese side.
your tax status depends on your company status…you can only issue fa piao if u are registered, if you buy fa piao then you can offset these against fa paio on sales…it’s a value added tax.
but to do all this u need a local company…and u dont make it clear if u do or u dont.
July 21st, 2008 at 3:17 am
Regard to freelancing, I think situation would be better if you could set the operating scenario with the help of a foreign company.
Say you partner with a foreign company (eg. Hongkong base), and that your client pays to this foreign company, and then this foreign company pays you. Off course, this partner needs to draw some kind of service contract with your client and that this foreign company take come % of the contract value as commission.
If you’re keen, I could connect you with someone who may be of help.