Living In China, From The US, Requesting Advice on Liability / Legality

27 replies
Hi,

I will be running my online business from the comfort (or lack there of) of China and want to get your advice on a few things:

1) I will be doing online marketing with a student visa, which dictates that I can't work while at school. However, I assume this means that I can't work for a Chinese company while at school.

2) I will build a website that pays users to write articles. I don't have a great way of making this work besides using paypal or mailing personal checks. I'm a bit concerned about the liability aspect of this, therefore, I am thinking about setting up an LLC.

I only have less than a month to get any necessary paperwork taken care of physically in the US. My questions are:

* is there anything I need to be worried about from a legal standpoint in doing online marketing in China?

* would it be wise to set up an LLC to help from liability issues for the second concern?
#advice #china #legality #liability #living #requesting
  • Profile picture of the author Michael Lewis
    You might be physically in china but your market is online. So it doesn't matter. Just keep an address in the United States and it is always a good idea to register a LLC or get a business license. I travel myself often and do internet marketing from every country I been to.
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  • Profile picture of the author Rob Barbour
    As long as you're fine with assuming that everything you do online is monitored, you should be ok.

    When running any business you always want to run it under a corporation to protect your personal liabilities. Now just because you have an LLC or INC doesn't completely absolve you, but it's a necessary buffer.

    You can set up an LLC in the US for around $300 or you can set up an off-shore company for $1200-3000 depending on what country it's in and what services you require.

    NOTE - I am NOT an attorney, legal firm, or anyone providing legal advice - I'm just providing my opinions. (take that FTC )
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  • Profile picture of the author KenThompson
    Be very careful that no articles can even be remotely associated with porn. You'll
    be in extremely deep trouble over that - Chinese prison. Probably gambling and
    things like that, as well.

    I'd suggest you contact the Chinese embassy and ask.

    Tel (202) 328-2500 Email: chinaembassy_us@fmprc.gov.cn
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  • Profile picture of the author seasoned
    I wouldn't imagine China would care. OBVIOUSLY, working for a company THERE limits THEIR citizen's abilities, THEIR security, etc.... So I am sure THAT is why perhaps EVERY country has such a visa. The US even has such visas. Of course, as a resident, they very well might want you to pay taxes.

    Still, China is NOT the place you want to fool around, etc... Talk to the Chinese consulate! After all, that IS one of the reasons they are there. If you don't have a Chinese consulate in your country, you may want to reconsider going.

    Just out of curiousity, why are you going to China? are you fluent in Chinese? Most classes are probably going to be in chinese, they will want you to know chinese, and chinese is something you want to be FLUENT in if you intend to speak it.

    Steve
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  • Profile picture of the author NBaller
    Wow, thank you for the quick advice!

    I am staying far away from gambling and porn, so that shouldn't be an issue. Trust me, I don't want to go to jail out there...

    I will partially be going to learn Mandarin and will do so at a local university. I will be using internet marketing to (hopefully) support myself on my, otherwise, $0 income throughout the year.
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    • Profile picture of the author seasoned
      Originally Posted by NBaller View Post

      ...
      I will partially be going to learn Mandarin and will do so at a local university. I will be using internet marketing to (hopefully) support myself on my, otherwise, $0 income throughout the year.

      WOW, if it were ME, I would probably want to go to taiwan to learn that(because they are likely friendlier to americans, and not communist), but that IS one of the few places I would suggest going to if you want to learn mandarin QUICKLY. bear in mind quickly doesn't mean overnight. It might take you WEEKS, or longer, even to start to feel comfortable with detecting pitch.

      Good luck. Chinese has a distinctly different grammar, different and LARGE alphabet, and ,of course, the PITCH. Although one of the top four languages, by nearly ANY measure, it is the one I have not given ANY real time to, because it is SO different, etc... The other three, in the top 4, are often English, Spanish, and Hindi.
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      • Profile picture of the author NBaller
        Originally Posted by seasoned View Post

        WOW, if it were ME, I would probably want to go to taiwan to learn that(because they are likely friendlier to americans, and not communist), but that IS one of the few places I would suggest going to if you want to learn mandarin QUICKLY. bear in mind quickly doesn't mean overnight. It might take you WEEKS, or longer, even to start to feel comfortable with detecting pitch.

        Good luck. Chinese has a distinctly different grammar, different and LARGE alphabet, and ,of course, the PITCH. Although one of the top four languages, by nearly ANY measure, it is the one I have not given ANY real time to, because it is SO different, etc... The other three, in the top 4, are often English, Spanish, and Hindi.
        I definitely understand where you're coming from, and I agree that the best place to learn Mandarin is in Taiwan (or possibly Beijing). I will be living in Shanghai and have had experience living and working there. I love the city and have a network of friends and former co-workers there. My study will be a full year, full time intensive course in learning the mandarin language and I've seen the program work amazingly for friends. The best part is, a full year's tuition is a bit over $3,000 US and living expenses are much less than they would be in Taiwan. I currently know survival mandarin, but I'd like to turn that into a functional knowledge of business Mandarin. This will likely take multiple years.

        Out of curiosity, do you really feel that Hindi is an easier language for an english speaking person to learn than Mandarin?
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        • Profile picture of the author seasoned
          Originally Posted by NBaller View Post

          I definitely understand where you're coming from, and I agree that the best place to learn Mandarin is in Taiwan (or possibly Beijing). I will be living in Shanghai and have had experience living and working there. I love the city and have a network of friends and former co-workers there. My study will be a full year, full time intensive course in learning the mandarin language and I've seen the program work amazingly for friends. The best part is, a full year's tuition is a bit over $3,000 US and living expenses are much less than they would be in Taiwan. I currently know survival mandarin, but I'd like to turn that into a functional knowledge of business Mandarin. This will likely take multiple years.

          Out of curiosity, do you really feel that Hindi is an easier language for an english speaking person to learn than Mandarin?
          Hindi is MUCH easier! The alphabet is only about 150 characters. Some HINDI speakers might say there are fewer, but some of the compound letters are ridiculous, so I consider them as different characters. And there IS stylized devanagari, that is CRAZY, but I am sure they do the same with Chinese. Hindi grammar is probably closer to english than chinese is, and you don't have to worry about pitch.

          Of course, one CRAZY thing about hindi, that is ALSO the same with arabic, is that first person verbs declare sex(If you say I ran, for example, it is different if you are male or female). In CHINESE, by contrast, as I recall, they don't have a word meaning he or she(or is it his or hers, or either?). Apparently THAT is why so many chinese that speak english as a second language have trouble with those things.

          steve
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  • Profile picture of the author UBotBuddy
    I envy you! China. I would LOVE to live there. Enjoy it while you are there. I go every year and this summer will be my fifth year. I've been to Shanghai, Xian, Beijing and they are too hot for my taste and I hated the squatty potties. Xining is my place, 10,000 feet up on the Tibetan Plateau. Absolutely nice.

    Just make sure you bank car gets all of your paypal transfers or Google payments and you should be fine. They (the gov't) will be watching you but as long as you stay away from the bad stuff and it sounds like you are then you should be fine.

    As a student, MAKE SURE your passport & visa are current. Also, make sure you register at the proper places or the police will come and talk to you. Your university contact point will know where you need to go do that. I had a couple of friends in China last year and they were detain by the police for a while and hassled but there were some visa issues going on. It was very unusual in their case.

    Aside from the government stuff. The Chinese people are VERY gracious and giving. I love riding in the taxis there! Nothing like putting your life in a strangers hand. lol

    Enjoy the time and good luck!!!
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    • Profile picture of the author xiaophil
      Originally Posted by Rob Barbour View Post

      As long as you're fine with assuming that everything you do online is monitored
      Of course the same goes for the US or UK or just about anywhere else.

      What's more relevant may be whether the sites you intend to use are available here at all as many social and web 2.0 sites are blocked outright.

      Originally Posted by NBaller View Post

      I will be living in Shanghai and have had experience living and working there. I love the city and have a network of friends and former co-workers there. My study will be a full year, full time intensive course in learning the mandarin language and I've seen the program work amazingly for friends.
      I like Shanghai too. May I ask which school you will be studying at? Could you post a url or something? I've been keeping my eye out for a Mandarin school but so far have not had any good recommendations.

      Originally Posted by seasoned View Post

      In CHINESE, by contrast, as I recall, they don't have a word meaning he or she(or is it his or hers, or either?).
      Chinese has words for he ( 他 ) and she ( 她 ), they are different characters but both the same sound ( tā ), is that what you meant? Learning to read and write would certainly be a challenge but as far as the grammar goes I think it is actually quite terse. The tones are certainly a challenge, with a very subtle difference between talking about someones horse or their mother!

      Overall I have found the Chinese people to be very warm, friendly and hospitable. Many people who have not traveled here seem to harbor perceptions created mainly from the television and media about what it's really like.
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      • Profile picture of the author NBaller
        Originally Posted by xiaophil View Post


        I like Shanghai too. May I ask which school you will be studying at? Could you post a url or something? I've been keeping my eye out for a Mandarin school but so far have not had any good recommendations.
        You should be able to get this intensive mandarin training at any major university. Most have classes that begin either this month or in March. If you're in Beijing, Beijing University may be a good choice. In fact, your training will likely be better than mine since there is no Shanghainese in Beijing.

        Unfortunately, I can't send a PM back to you at this time since my post count is too low. Any other way I can reach you?
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  • Profile picture of the author talkingsmith
    NBaller...drop me PM if you need help .

    Regarding your question----
    1. I don;t think you need to setup LLC for IM , especially at early stage. The benefit of a LLC is to limit the risk only to your company, not your own money. So how much risk you think you have in article writing?

    2. Depnding on where is the persons you are going to pay for service, if they are outside china, paypal should works. but if they are chinese, many of them don't have paypal account.


    I have lived shanghai for 4 years, and will stay, maybe forever.. it is a nice place to live. The rent maybe expensive unless you live in dorm within your univ. Chinese girls are friendly, especially to foreigner, which upset me a bit (cuz I am chinese)

    Of course, lots of sites are blocked here, but there software help you get around the GREAT Firewall.
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    • Profile picture of the author NBaller
      Originally Posted by talkingsmith View Post

      NBaller...drop me PM if you need help .

      Regarding your question----
      1. I don;t think you need to setup LLC for IM , especially at early stage. The benefit of a LLC is to limit the risk only to your company, not your own money. So how much risk you think you have in article writing?

      2. Depnding on where is the persons you are going to pay for service, if they are outside china, paypal should works. but if they are chinese, many of them don't have paypal account.


      I have lived shanghai for 4 years, and will stay, maybe forever.. it is a nice place to live. The rent maybe expensive unless you live in dorm within your univ. Chinese girls are friendly, especially to foreigner, which upset me a bit (cuz I am chinese)

      Of course, lots of sites are blocked here, but there software help you get around the GREAT Firewall.
      Thanks for the advice.

      The risk won't be from article writing, rather it will be the promise to pay others for submitting articles to me -- and then me paying them. I'd like to give out a kickback of what google ads offer me. If someone disputes this and takes me to court, I wouldn't want it to get to my personal bank account.

      One question though -- if I start an LLC in the US, would that be proof to China that I am working while studying? Like everyone, I don't see this work being a problem with the student visa, just want to see if there's something I am overlooking.

      I'd like to meet up with you some day if you're free to discuss internet marketing in Shanghai. I'll buy you coffee / drinks / a meal for your advice .

      Do you have any advice on the best proxy to go after? Maybe a PM would be best?

      As an aside, I don't have the ability to return PMs now, so please let me know your e-mail.
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  • Profile picture of the author Bev Clement
    Having lived and have run an online business in China, you can do it, but you should remember a few things.

    Many sites are blocked, so you might want to consider a proxy before you leave for China.

    We recently went back in and found all our sites were blocked. They were hosted on hostgator, so remember that today you could access your website but then another day you can't.

    I had no problems using PayPal while there.

    Check your student visa to ensure you can work, because the government have kicked people out for working. It depends on what the PSB in Shanghai regards as work. We were in on a business visa, so no idea about the student visa and how they would react to it.
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  • Profile picture of the author ghoti
    I lived in China for a few years, as well. I highly doubt that they will care at all about your internet marketing activities, especially if you are getting paid into an account that is not in China. The US is the only major country in the world that cares what you earn when you reside in another country -and that is the bigger concern. The Chinese basically don't want you earning money to take it out of the Chinese economy.

    Like others have said, your biggest problem will be sites that get blocked by their filters. Sometimes they are completely innocuous sites, but maybe they just get caught up in the net. I would make sure you have someone state side who can access your accounts just in case you can't get logged in. I've heard of people who have lost domain names because they couldn't contact their registrar to renew.

    I would never ask the Chinese consulate for advice. They don't care, they probably don't know, and if it's not specifically allowed, it's forbidden in their mind. Get connected with the right people in Shanghai and you'll have no worries. A phone call to the right person will clear up a lot of problems there.

    It may be different now, but later on you can always change your visa (if need be) much more easily and quickly in Hong Kong, or even in Shanghai itself.
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    • Profile picture of the author NBaller
      Originally Posted by ghoti View Post

      I lived in China for a few years, as well. I highly doubt that they will care at all about your internet marketing activities, especially if you are getting paid into an account that is not in China. The US is the only major country in the world that cares what you earn when you reside in another country -and that is the bigger concern. The Chinese basically don't want you earning money to take it out of the Chinese economy.
      Do you think it will be an issue if I properly pay my taxes to the US on whatever earnings I make?
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      • Profile picture of the author seasoned
        Originally Posted by NBaller View Post

        Do you think it will be an issue if I properly pay my taxes to the US on whatever earnings I make?
        It COULD be argued that, if you are a SOLE proprietorship, and don't own a home, you owe NO taxes to the US, or state. So you should take it up with a person skilled in US taxes from US citizens who are foreign residents.(The IRS will NOT try to give you the right answer, and you can't trust it, and most tax people will NOT necessarily know the answer.) Of course, if it is a corporation, IT still "lives" in its state of incorporation, and subjects you to the appropriate taxes.

        So don't assume. SOMEBODY will probably want taxes, and it might not be the US.

        Steve
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    • Profile picture of the author seasoned
      Originally Posted by ProductCreator View Post

      If you're there for less than 180 days in the year then all the above is a moot point.
      Most places consider you a resident if you are there over 90 days. Most countries THEM start to ask for visas, and even states in the united states start deducting the non-resident tax for hotels, etc...

      Steve
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  • Profile picture of the author ghoti
    I just think you're making it overly complicated. The Chinese basically don't want you to take up employment in China - that's what "work" means in this context. The same would be true for most countries in this situation.

    Also, try not to get too hung up on the letter of the law in China. Just stay out of trouble mostly by using common sense. Assume that your emails are read (and that your phone conversations might be recorded, as the phone company blurted out mine were in a debate over the bill), but they are not looking for anything like what you are worried about.

    The only trouble I can imagine is if you are paying Chinese to write articles. I don't think that would be a problem either, unless a dispute arises over pay (and that's very likely if you deal with a number of people).

    Either way, I would think the potential of doing IM in China outweighs the difficulties. I wish I knew about it when I was living there. Good luck.
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  • Profile picture of the author Sean Kelly
    ...which dictates that I can't work while at school.
    There is your answer.

    You get caught, say bye bye to your Visa.
    Haven't you heard about the great firewall of China where they monitor practically all traffic?

    Best thing to do is NOT assume anything, ask your consulate specifically what you can and cannot do while being in the Visa program.

    Sean
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  • Profile picture of the author DrGUID
    My girlfriend is from China, and I love going to visit her, my prospective mother in law is an incredible cook.

    I don't know why people ask "is it alright if I do X, Y and Z..." - just do it and keep your mouth shut. My employer doesn't let us do outside work, so I keep my mouth shut about my side ventures.

    Anyway, there is internet access in China. However, sites are sometimes blocked although there are VPN workarounds. Internet access can be a bit flaky as well, especially away from the major cities.

    Obviously if you're in China you want to refrain from talking/blogging about controversial subjects. But I didn't find China that oppressive and the UK/US government is getting just as twitchy about cracking down on people it doesn't agree with - so much for the Western world's freedom of speech.

    I am learning Chinese - Mandarin is easier than I thought due to incredibly basic grammar. I am also learning to read the characters. I really cannot remember them to write on paper, but I can type them in pinyin.
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  • Profile picture of the author ghoti
    China does not expect income tax from somebody on a student visa.

    The US, on the other hand, requires that all US citizens report their earnings every year. It doesn't matter if you've been an overseas resident for 10 years, never visited the US once in that time and have zero property/assets in the US.

    There is, however, an exemption (if Obama doesn't take it way). Your earnings up to around $85,000 USD are exempt from US income taxes, assuming all that money was earned by employment overseas. If it was from a business, especially one that sells to Americans, that may not be the case.

    If you do not report your income to the US, and they want to be a**holes, they can deny you the exemption above. I haven't heard of it happening, but that doesn't mean it doesn't.

    My only advice is that you don't forget to file with the IRS, and that if you make some money you talk to a tax attorney who specializes in expats (or a CPA if you can't afford the attorney - but a CPA cannot protect your private conversations as an attorney can). There are plenty of such people right in Shanghai, and even more in Hong Kong.

    So, go get 'em. I hope you can be the first person to establish a successful drop-shipping program direct from China.
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  • Profile picture of the author GuerrillaIM
    Make sure you get tax advice. If you are in China for majority of year then you may have tax issues.
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