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Q: I am going to set up a business in China, anybody has some tips about taxes?
Dear All,
i will soon set up a WOFE (registered capital 500.000rmb) in Zhejiang province Ningbo,
the company business scope will be a beauty salon which includes various services from permanent hair removal to personal training. If the first salon will be successful my hopes are to open a number of branches in the next five years.
I will hire myself in order to avoid doing every time the expensive 12 months F visa but i have a doubt:
the company profits will be taxed at a rate of about 20 to 25% however as i am also employed in the company so i will have to pay taxes on my own income as well. My question is will the already taxed profits from the company will be taxed again as my personal profits (as i am the only shareholder)?
Also if you have any other tips or if you can refer to me a good but not greedy agency for manage my taxes and paperwork it will be greatly appreciated.
Thank you for your time,
Mr.Jack
11 years 5 weeks ago in Business & Jobs - China
The salary you will pay yourself is an expense for your company, and it will reduce profits and thus taxes paid. And if you fix your salary at 4600 yuan per month, that is the salary limit for foreigners or a tax free salary. In China, tax returns and payments are done on a monthly basis, not on a year basis as we are used to abroad.
Personal taxes on income start from 5 % of anything above 4600 per month, and it is on a sliding scale, the more you earn, the more you pay. You can Google the detailed information.
There are more taxes than income ones, like social security or retirement fund, housing fund, health insurance, etc. The attorney that helps you set up the WOFE could recommend an accounting firm at your city.
Now, to me, and I am not a tax expert, profits removed from the corporation will count as income to you too. So, the idea is o have maybe a car, an apartment, etc and use those expenses to reduce profits rather than pay them out of your pocket.
Good luck to you. Will you also offer "massage" services? 
Mr_Jack:
i hope that the taxes end with the 25% corporate tax and they will not tax again 45% what i got left... seems ridiculous. i rather name more shareholders in order to reduce the income tax.
My tip for you is:
Pay your taxes!!!!!!!!
GuilinRaf:
Oh, and dont try to get cute or creative here. This is not the IRS.....
INSTEAD OF OPENING A BIZ IN CHINA YOU WOULD BE BETTER FLUCSHING THE MONEY DOWN THE TOILET UNLESS U ARE CHINESE U WILL LOSE EVERY PENNY JUST REMMEMBER THIS IAM VERY SERIOUS AND U CANNOT OPEN A BIZ UNLESS U ARE MARRIED TO A CHINESE NATIONAL TO OPEN A BIZ U HAVE TO HAVE A CHINESE PARTNER AND U CAN ONLY OWN 49 % UNLESS U HAVE A RESIDENT CARD KNOW THE LAWS BEFORE U INVEST THATS ALL IAM SAYING U ALSO HAVE TO HAVE AN ACCOUNTANT AND OH WELL BYE BYE RMB
GuilinRaf:
Same thing happened to the dad of a friend of mine in Cuba.
He was Spanish and opened a guest house in Santiago (a city in the East of Cuba). Then, after three years of hard work, when they finally start to turn a profit, the guesthouse was appropriated by the govt and given to the business partner.
He ended up in Puerto Rico in 1981 with almost nothing after losing it all in Cuba.
Caveat Emptor......
Edit: He actually had to hitch a ride with the ":Marielitos". How he, a Spanish subject got US citizenship under those circumstances is anohter story.
