China

Introduction

China is an East Asian country known as the People’s Republic of China and it is the World’s most populous country.  It is considered a megadiverse country when it comes to climate and biodiversity as it is one of the largest countries in the World and spreads across two of the world’s major biogeographic realms.  Mandarin is the most widely spoken language although it is thought that there are as many as Two Hundred and Ninety Two living languages in China.

China is one of the World’s earliest civilizations and its early dynasties are world renowned.  A lot of the early technological advancements that shaped the world today came from China such as gunpowder and papermaking.

It has long been a hub for trade and recent years has seen China become the world’s biggest exporter and second largest importer.  This combined with its large population makes it the largest economy in the World.  It also has the World’s largest standing army and is known to be a nuclear power.  With its huge defence budget it is a permanent member of the United Nations Security Council.

China is considered a super power of the world and with its rich culture and history of being a the forefront of technological advancement it is an attractive option for someone looking for something completely different that is willing to challenge themselves.  However, it should be remembered that China is one of the few remaining one party socialistic republics and therefore it does not have the level of democracy and human rights that individuals from the West are used to and before you consider relocating there for work opportunities you should allow yourself to become a lot more familiar with their statutes and customs and have a solid work ethic and system including payroll and taxes already in place.

Registry/Registration

Hospitality is a central part of Chinese culture, however it should be noted that China is extremely overpopulated and foreign nationals will need a visa to enter.  Persons with dual nationalities have been known to experience difficulties as this is not recognised in China.  China is one of the world’s largest economies and whereas positions for expats used to be primarily in senior management there is now increasing opportunity to be found in a variety of other areas.

If you intend to stay in China for an extended period of time for work then you will require a type Z permit prior to arrival.  This then allows entry after which you can use your Z visa to apply for a work permit, a residence permit and a health permit.  It should be noted that procedures for this can vary depending on different Chinese regions. 

China does not issue visa’s for self-employed freelancers and therefore you will need to be sponsored by a registered company.

The Chinese are a very serious nation and persons who do not work under the relevant permits can expect serious repercussions and fines.

Income Tax

If you reside in China for more than 183 days per annum then you are considered resident.  If you are resident then you must pay tax on your worldwide income.  However the rules are somewhat complex and some individuals are taxed only on their China sourced income and it is worth looking into this to see if you qualify.

It should be noted that Chinese currency has two names Renminbi (RMB) or Yuan (CNY) and the differences are very subtle.

The 2019/2020 income tax rates in China are as follows:-

Up to 36,000               3%

36,001 – 144,000        10%

144,001 – 300,000      20%

300,001 – 420,000      25%

420,001 – 660,000      30%

660,001 – 960,000      35%

960,000 +                    45%

 

Social Security

As already mentioned China is one of the largest and most populated countries in the world and therefore its social security requirements vary according to local jurisdictions.  China works similar to other countries whereby it is normal practice for the employer and employee to make contributions.  However, if you are a self-employed contractor then you can of course participate in the pension and medical insurance schemes on a voluntary basis.

As the local authorities requirements and rates can differ it is difficult to give an exact indication of how much you should expect to pay without assessing the location you intend to work and your individual circumstances on a one to one basis, however a rough indication would be around 12% and 8%.

Employment Rules

The Chinese are a serious and industrious nation.  As such their employment law is encompassing and specific which can be somewhat difficult to navigate if you are a foreigner. 

Contracts are a centre point of Chinese labour law and therefore you should be wary of engaging in business based on an offer letter or an oral agreement only.

The Chinese labour law cannot be found in one specific place as it comprises of the constitution, national laws, administrative regulations, judicial interpretation as well as other local and ministry regulations.  Therefore if you are in need of assistance professional advice is encouraged.

Despite the perception that the Chinese are productive as to imitate machines the labour law does in fact ensure that there are maximum standard working hours and overtime should be generously compensated especially in the case of a public holiday.

As previously mentioned it is important that you have the relevant permit before engaging in any type of employment in China as they view this very seriously and if not you will not be afforded the protection of any of their labour law.

Banks

The actual process of opening a bank account and the subsequent running of the account is relatively simply in China.  However, there are two main obstacles with regards to the opening being firstly the language gap, it is advisable to have someone who speaks Mandarin accompany you if you are not familiar with the language, and secondly the queues that you can expect to be at the banks in China.

If you are not familiar with the language this does limit your options in China to one of the major banks as many of the smaller establishments will not be able to offer services in English.  It should also be noted that many of the international banks that are located there do have high minimum balances.

Most banks in China only require to see your passport in order to open an account, but do be prepared to produce additional documentation such as visa details or proof of address if necessary.

It should be noted that the limit for ATM withdrawals are quite low in China and this can pose a problem for foreigners who are not used to this. 

Whilst bank fees are sufficiently lower in China you should expect to have to go to the bank and prove source of funds prior to being able to transfer funds out of the country to your domestic accounts or elsewhere.

Corporate Structures

If you wish to contract in China we offer Chinese self-employed services and employed payroll services.  We can assist with any tax matters advising whether these should be deducted at source and how and when these should be submitted.  China is a very serious country and even genuine mistakes in documentation can land you in a lot of trouble and therefore why not take the pressure off by allowing a professional firm like ourselves to deal with payroll and accounting for you and take the worry away.

Chesterfield and Contracting in China

Chesterfield has abundant experience with contractors and freelancers working all over the world and we offer a variety of schemes and solutions in order to make life easier. If you decide to engage our services then you will be assigned a dedicated member of staff who is responsible for all your administration and contact, allowing them to be more in tune with all your needs and assist you in every way possible.