I arrived in China with a 4 month tourist visa which then was over-rided when I got a Resident permit as a dependent of my partner. I have now been offer freelance editing work.

What do i now need to do to be working legally? Someone has told me i need to get an Employment Licence and then an Employment permit, and that is all. I wondered about the Work visa but I wouldnt have a contract with which to apply for this anyway? I also really want to avoid having to go home to get this.

Can someone clarify these things?

Some other things - the payment i get for my work will be taxed by the company i am doing freelance work for. Is that right? And then i dont have to pay any other taxes?

I can actually do the work while I am outside China, so what happens with regards to tax then? I mean, if i was in UK i would have tax deducted by the employer and then pay income tax again in UK??

Finally, although i may be taxed by the employer, and they will only pay my money through a bank account i have yet to open, could i simply get away without any visas/permits - or will the tax and bank lead 'inland revenue'/police' to me?

Sorry for the long post but this is all confusing. Thanks for any help!

OP I'm no tax lawyer (these days)

If you are earning money while in China with an RP (as a dependant) I would think that is illegal. If the company is taxing your income I would think that that is also illegal. You say you are freelance. Freelance means just that. You would not be an employee. So you can be sure that someone in the company is pocketing that 'tax' deduction.
Basically, it''s your choice. Do the work and get paid for whatever you do but remember it will be illegal. Whatever you decide do not accept any so called 'tax' deduction.
As for the bank account, you could open an account at a local Chinese bank or maybe a even a foreign one such as HSBC and ask the company to credit that account with your payment- but naturally there might be some risks attached to that as well. I don't really know if banks here are subject to any reporting duties to government agencies regarding foreigner's accounts.

If you are working from outside China and providing a service either as an individual or legal entity (such as a limited liability company) you should be sending the company an invoice for your services so 'income tax' deduction has nothing to do with the Chinese company.You don't work for them as an employee.
In this situation I would think that you (or your company) would be liable for your/its own tax liability in the UK or whever you are resident/wherever the company is registered.

There may well be other ways around your problem so others might be able to give you more appropriate advice.

Hope that helps. If I have misunderstood your situation, apologies.

OK, thanks for your help, you didnt misunderstand anything, but i had thrown a whole load of questions up. It certainly doesnt seem right for them to take tax off unless they are giving me a contract. Essentially they paying me for a service and the should pay the full cost.

Anyone else with any more information on this and the other matters and legalities I have raised?

Thanks!

*bump*

leidelaohu wrote:

kulturschok wrote: It certainly doesnt seem right for them to take tax off unless they are giving me a contract.

It certainly doesn't seem right that you are working on a visa that specifically declares that you can't work, either.

You'll find that you have another problem. A company cannot pay into a personal account. You need a company account to receive payment unless they will pay you in cash. If they pay you in cash you are illegal. If you want a company account then you need a license. To get a license ...

This is not as simple as you think, if you do it legally. If you do it illegally then you are subject to deportation if someone gets pissed at you.

Choice is yours.

Exactly, Tiger.

Also, any money anybody earns in China is taxable regardless of your visa status. Those on a tourist visa who work, albeit illegally, still have the legal obligation to pay Chinese income tax.

Since you are not on a work permit / work-related residence permit, you should be taxed a flat 20% and do not qualify for the standard approximately 5,000 RMB tax-exemption.

Hi kulturschok

Did you manage to work it out now?

I am in the same situation except that there is no mention from the company about taxing my income. Basically, engaging the service of a foreigner is new to them so I wanna find out more for the benefit of both parties.

I am now wondering:

1) how to bill them (invoice??)
2) legal implications for me (if I am allowed to work at all as a dependent visa holder, etc.)
3) legal implications for the company (what they have to do and if they will be in trouble for using my service, etc.)
4) income tax issues.
5) if there are any other issues I should be aware of

Like you, I can also offer my service outside China but I guess it doesn't matter since I live in Shanghai with my husband.

Would appreciated it if you and other forumers could share some experiences and give me some advice as to how I should proceed.

Thanks!!

It also seems like a pain on the company's side to pay a foreign freelancer. Any way to work around it legally?

Is "day trading" considered "working" from the legal point of view?

gsh wrote:1) how to bill them (invoice??)
2) legal implications for me (if I am allowed to work at all as a dependent visa holder, etc.)
3) legal implications for the company (what they have to do and if they will be in trouble for using my service, etc.)
4) income tax issues.

1. You buy a personal service fapiao from the tax bureau. You have to pay the fapiao fee up front and they'll probably make you pay the income tax up front, too.

2. No, you cannot work at all. Period. Tax authorities are starting to get their system in line with PSB.

3. They can be fined. You deported.

4. Se above.

How about setting up a Hong Kong registered company ?

adam1987 wrote:How about setting up a Hong Kong registered company ?

How does that give you a work permit in China? See under20posts...

adam1987 wrote:How about setting up a Hong Kong registered company ?

I have heard about that, but I don't have any specifics. Sorry.

gsh wrote:Hi kulturschok
1) how to bill them (invoice??)
2) legal implications for me (if I am allowed to work at all as a dependent visa holder, etc.)
3) legal implications for the company (what they have to do and if they will be in trouble for using my service, etc.)
4) income tax issues.
5) if there are any other issues I should be aware of

Like you, I can also offer my service outside China but I guess it doesn't matter since I live in Shanghai with my husband.
Thanks!!

2) Dependants can't work unless they have their own Z visa. You will likely have to return to your country of origin to get the Z Visa permission although it depends on which passport you hold. These rules are quite fluid at the moment.
3) Company is responsible to ensure you are legally employed and taxes deducted. Otherwise they are in trouble.
4) When you are on Z visa your employer will deduct your tax. They may also provide some additional employment benefits.

timafss wrote:

gsh wrote:Hi kulturschok
1) how to bill them (invoice??)
2) legal implications for me (if I am allowed to work at all as a dependent visa holder, etc.)
3) legal implications for the company (what they have to do and if they will be in trouble for using my service, etc.)
4) income tax issues.
5) if there are any other issues I should be aware of

Like you, I can also offer my service outside China but I guess it doesn't matter since I live in Shanghai with my husband.
Thanks!!

2) Dependants can't work unless they have their own Z visa. You will likely have to return to your country of origin to get the Z Visa permission although it depends on which passport you hold. These rules are quite fluid at the moment.
3) Company is responsible to ensure you are legally employed and taxes deducted. Otherwise they are in trouble.
4) When you are on Z visa your employer will deduct your tax. They may also provide some additional employment benefits.

^ not quite correct as dependants DO have their own Z visas if applied from overseas together with employee. What you need is to have your own Work license and work permit to ba allowed to work. Your use of the term "Z-visa" is incorrect in your above statement. you DO know the difference right? I need to ask because your event ad has been allowed to stay on the forum, but if your company cannot tell the difference between the definitions of a "Z-visa" and the Work License and Work permit, maybe it IS Spam after all. A reply is expected.

You're right, there is a distinction between the Z Visa and the Work Permit and my statement could be misinterpreted. I'm not the immigration lawyer unfortunately - she sits behind me!

Z Visa is the permission to enter country and dependants do get permission to enter the country from their spouse visa. But they dont get permission to work - which is the Work Permit.

And a Residence Permit would be a good thing also?

timafss wrote:

gsh wrote:Hi kulturschok
1) how to bill them (invoice??)
2) legal implications for me (if I am allowed to work at all as a dependent visa holder, etc.)
3) legal implications for the company (what they have to do and if they will be in trouble for using my service, etc.)
4) income tax issues.
5) if there are any other issues I should be aware of

Like you, I can also offer my service outside China but I guess it doesn't matter since I live in Shanghai with my husband.
Thanks!!

2) Dependants can't work unless they have their own Z visa. You will likely have to return to your country of origin to get the Z Visa permission although it depends on which passport you hold. These rules are quite fluid at the moment.
3) Company is responsible to ensure you are legally employed and taxes deducted. Otherwise they are in trouble.
4) When you are on Z visa your employer will deduct your tax. They may also provide some additional employment benefits.

#2 is a crock of ****. Once you have a dependant's residence permit, you do NOT have to leave the country when you change over to a work-based residence permit.