Freelancing in China: Status and Filing Requirements

Published on September 30, 2025 and written by Cyril Jarnias

Freelance work in China is experiencing unprecedented expansion, gradually transforming the economic landscape of the world’s most populous country. In the era of digitalization and technological innovation, the status of self-employed workers holds critical importance for understanding the new dynamics of the Chinese labor market.

However, this development comes with significant regulatory challenges, particularly concerning reporting and tax obligations. This article examines how these independent workers navigate an evolving legal framework, while exploring the opportunities and constraints that shape their professional daily lives in China.

Understanding Self-Employed Worker Status in China

The self-employed worker in China lacks an explicit legal definition but is generally equated with a sole proprietor (个体户) or a provider under a civil contract. This status is characterized by autonomy from the client and absence of integration into the company’s structure.

Eligibility Criteria for Obtaining the Status:

• Be a Chinese resident or foreigner with a work permit or permanent residency.
• Register as a sole proprietor (个体工商户) with local authorities, or enter into a civil service contract with a company.
• Freely determine one’s schedule, rates, and work execution methods.
• Use one’s own tools and equipment, without being subject to direct control or integrated into the client’s internal processes.

Legal and Tax Obligations:

• Personally pay income taxes related to services (flat rate around 20% after deducting business expenses).
• Register business activity with relevant authorities if choosing the individual model.
• Does not automatically benefit from mandatory social protections (health insurance, retirement), nor dismissal compensation or paid leave; these costs must be personally assumed if desired.

Obligations	Self-Employed Worker	Traditional Employee
Tax Payment	By the worker	Withheld at source by employer
Social Security	Not mandatory	Mandatory
Employment Protection	None	Labor Contract Law

Advantages:

• Flexibility in time management and client selection
• Pricing freedom
• Ability to work for multiple companies

Disadvantages:

• Absence of mandatory social protection
• Increased personal tax responsibility
• Legal risk in case of improper reclassification (if relationship too closely resembles employee/employer)

Differences with Other Employment Forms:

Status	Contract	Social Protection	Taxation
Self-Employed Worker	Civil	Low/Optional	Individual Filing
Employee	Labor	Comprehensive	Employer Withholding
Foreign Freelancer	Limited	Subject to restrictions	Complex

Recent legislative developments have strengthened controls on the actual qualification of contractual relationships to prevent abuses disguising employment relationships as independent services. Chinese digital platforms have popularized this status among locals but it remains difficult to access for foreigners without specific legal attachment. These developments could limit some informal practices while encouraging the official creation of individual businesses to meet flexible market needs.

Guides for Freelance Administrative Procedures

To work as a freelancer in China, it’s necessary to follow several administrative procedures to obtain legal status, comply with tax obligations, and secure proper insurance.

Main Procedures for Obtaining Self-Employed Status

Determine the legal structure: The most accessible form is the individual business, open to foreign residents under certain conditions.

Gather Required Documents

• Signed application form
• Identification document (passport)
• Proof of business address (commercial lease or certificate)
• Other specific documents required by local administration (SAMR – State Administration for Market Regulation)

Submit the file to the local SAMR within fifteen days after setting legal information (name, address, capital, activity).

Obtain an official business license and have the company’s legal seal made.

Procedure	Required Documents	Competent Authority
Business Creation	Form + ID + Address	SAMR
Business License	After file validation	SAMR
Official Seal	Upon presentation of license	Local Approved Office

Tax and Social Obligations to Respect

• Mandatory bookkeeping to allow potential audits.
• Regular declaration of professional income.
• Payment of Value Added Tax (VAT) applicable to freelancers based on their turnover. The rate varies according to the activity and may change based on thresholds defined by local authorities.
• Strict compliance with declaration deadlines: generally monthly or quarterly depending on activity type.
• Contribution to mandatory social security if hiring or working on site. This mainly includes:

• Health Insurance
• Pension Insurance
• Unemployment Insurance

Registration for Social/Medical Insurance

Freelancers must contact the local social security office to register themselves or through their individual business.

The contribution depends on declared income; it provides access to the Chinese public system.

Practical Tips and Useful Resources

Practical List

• Inquire directly with the local SAMR before any administrative procedure
• Seek an umbrella company that handles all these steps: complete administrative management, tax/social registration, contract compliant with Chinese regulations

• Advantages: increased financial security, personalized support, speed
• Examples: international companies like Hightekers or ITG

Useful Resources

• Regularly consult the official Chinese government website regarding individual businesses
• Contact the French embassy in China for free advice on local administrative setup

Key Takeaway
Support from an expert company often allows foreign freelancers to significantly limit administrative and tax risks when setting up in China. Administrative support also facilitates access to local contracts and all social schemes without opening a business themselves on site.

Income Declaration for Expat Self-Employed Workers

Tax Obligations of Expat Self-Employed Workers in China

A French self-employed worker expatriated in China generally remains liable for tax in France on their self-employment income, unless a transfer of tax residence is recognized by French authorities and local Chinese conditions apply. They must also pay attention to Chinese legislation, particularly the risk of double taxation if no tax agreement exists between France and China.

Specifics for Non-Permanent Residents

Chinese Tax Status:

• Anyone residing more than 183 days per year in China is considered a Chinese tax resident.
• If the stay exceeds five consecutive years (without prolonged interruption), taxation then applies to worldwide income.
• If the cumulative duration remains less than five years, only income generated or received for activity exercised in China is subject to local tax.

Summary Scenario:

Stay Duration	Taxation	Taxable Income
5 years	Full Resident	Worldwide Income

income generated via Chinese entity or work performed on site

Deadlines and Tax Declaration Procedure

• Annual declarations must generally be submitted before March 31 following the relevant tax year.
• Payments may be required monthly or quarterly depending on the type of professional activity exercised.

Bilateral Agreements on Double Taxation

France and China have signed a convention against double taxation. In practice:

• The same income cannot be taxed twice: it is either taxed in the country where you are a tax resident, or in the one where it was generated (with tax credit mechanisms).
• To benefit from the treaty advantages, certain proofs must be provided to concerned administrations during declarations.

Types of Income Concerned

Non-exhaustive list:

• Industrial/commercial profits realized under self-employed status
• Intellectual services/freelance work
• Employee compensation related to actual presence in China

Not concerned:

• Purely passive income (foreign dividends, off-shore bank interest)

Possible Tax Exemptions & Deductions (China)

Some examples:

• Standard deduction for school expenses per enrolled child
• Partial rent deduction depending on city
• Costs related to language courses/training

These deductions are subject to strict conditions and require presentation of original supporting documents.

Practical Tips for Organizing Your Tax Declaration

Essential list:

• Prepare a summary calendar with all local/French deadlines
• Keep all client contracts/invoices/receipts related to your professional activities
• Archive proof of international bank transfers (for geographic source traceability)

Frequently requested documents:

• Official certificate of self-employed status
• Proof of current primary residence/actual stay
• Commercial contracts + corresponding bank statements
• Tax certificate issued by your French administration if requesting exemption/refund via bilateral agreement

Also ensure to regularly consult a specialized tax advisor to anticipate any regulatory changes impacting your international situation.