Foreign Auto-Entrepreneurship and Freelancer in China (Tianjin)

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In our previous series of articles, we introduced the work permit system, and the ways in which companies can legally hire foreigners in China.


What about foreign freelancers, self-employed, and solopreneurs in China?



ARTICLE BROWSING

1. Regulations about freelancing in China

2. A working legal business model

3. About the new entrepreneurship visa

4. Tianjin administrations address book (direct link)


COMPLEMENTARY LINKS

-The Foreigners Guide to Work/Hire Legally in China (Tianjin )

-Work Permit Explained, Application Process in China (Tianjin)

-Work Permit, Resident Permit Renewal and Change (Tianjin)

-Work Permit, Change of Employer or City (Tianjin)

-Internship In China (Tianjin)

-Foreign Auto-Entrepreneurship and Freelancer in China (Tianjin)

-Beichaka, police registration, residency registration

-How to Calculate and Withhold IIT for Your Employees in China (external link)

-Social Security Law for Foreigners in China (external link)

-How to get your Pension Payments back when leaving China (external link)


——> Knowledge database

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1 Regulations about freelancing in China


Freelancing terms cover different meanings according to the country the worker lives in. Let’s define freelancing as people who work when, where and with whoever they want. They are responsible for their own taxes and do not have employees.


China authorizes their citizens to have 2 forms of self-employment. Self-employment (个人劳务) or privately-owned small business (个体户), allowing both of them to issue official invoices (发票) and request that they report their individual income and pay taxes. It is still completely forbidden for foreigners to enter into self-employment in Chinese territories.


However, it is possible to emulate freelancing in China with a company and the proper work permit (in most of the cases, in order to preserve their freedom, freelancers will choose to own the company).


Some people may get it wrong and think to own a company gives them the right to work in China. Owning one or multiple companies only gives the right to receive dividends from these companies and to partake in the process of hiring people (like yourself).


Reversely, being an employee in a company doesn’t prevent you from owning another company, but you may legally work for only one employer in China at one time.

2. A working legal business model


The freelancer shall first register their own company (WFOE or JV). Services companies are the most adequate for freelance activities, because of their service-oriented scope. On the opposite side, industrial companies may offer very few opportunities for freelance work. 


Second, in order to work legally in China, the freelancer needs their company to apply for a work permit for themselves.

The work permit (labor contract description) shall allow the freelancer to work on different projects (consultant, web designer, trainer, designer, writer… etc.)


Read: 

-The Foreigners Guide to Work/Hire Legally in China (Tianjin )

-Work Permit Explained, Application Process in China (Tianjin)


While this system may look like workforce dispatch, it is not, as long as the freelancer does not engage in extra labor-relations and makes sure to stay within the boundaries of their work permit.


In a traditional freelancer system, the contracts can be concluded between a customer (company or person) and a freelancer (person). Hoewever, in this model contracts will always be concluded between a customer (company or person) and the freelance company.


Contracts will generate company income, the company will pay VAT, the company will emit official invoices and pay company taxes.


Regardless of company income, the company will give a monthly salary to the freelancer (as stipulated in the labor contract registered with SAFEA), will pay taxes and social security for the freelancer, and may pay the freelancer an annual bonus or dividends.


An important fact is that foreign individuals do not pay taxes in China on dividends and that may be the reason why most freelancers choose to own their own company (company shall distribute dividends to shareholders only).

3. About the new entrepreneurship visa

China has recently launched a new entrepreneurship visa in 2018, and this has just started in Tianjin.

 

With a validity of 2 to 5 years, this visa is an S1 Visa for private affairs with a special mention for Starting a Business (创业).


This 创业 S1 visa is aimed at recent post-graduates who have planned to stay in China and start their own company, to obtain self-employment or to gain work experience before settling for a new job.


Conditions:

-Applicants must  have a partner company that supports your projects and will support you during the time of your visa.

-Applicants must submit their company creation plan to the Municipal High-tech Achievement Transfer Center.

-Applicants must submit a regular report of their situation during the time of the visa to relevant authorities.


This article has been sponsored and written by Tianjin Link. With more than 15 years of experience, Tianjin Link is a Sino-French consultancy joint venture leader in providing business solutions for foreign enterprises.


You can contact them at This email address is being protected from spambots. You need JavaScript enabled to view it. www.tianjinlink.com

Or by wechat: ptshilei

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