I talked to my business partner on the mainland today and he was complaining about new business taxes.
Not sure I got it right as he just mentioned it in passing.
He said there was a new law that that required them to pay lifetime wages to any employee that had 10 or more years of services. In any event his company was looking for ways to cut overhead to manage the increased costs, moving into smaller space etc.
Whatever it is it looks like some of the free ride capitalisim is slowing down and they are going to have to pay some to keep the masses happy.
who knows maybe they will have overhead equal to the US in ten years
Yes, you now must help fund a retirement plan for all employees with more than 10 years employment, if your business is over a certain size (revenue, not head count).
The best deal is to be a foreign company, one based in HK - you’re free of a lot of the laws and restrictions of local companies, and can run your business with a lot lower taxes in China. Income in HK is tax free if the transactions are not completed in HK, but in China; likewise, profits for contracts signed outside of China or HK and paid directly to your HK account are tax-free in China. So with good contracts, you can run your cash into HK and pay nearly zero taxes.