$500 idea · Pattern break · China · Edition 007
China caps unregistered online selling at ¥100,000 a year and exempts eight services entirely.
网络交易监督管理办法 第八条, 国家市场监督管理总局令第37号, in force 1 May 2021 and amended by 令第101号 on 18 March 2025, names them: "保洁、洗涤、缝纫、理发、搬家、配制钥匙、管道疏通、家电家具修理修配" [cleaning, laundry, sewing, hairdressing, removals, key-cutting, drain-clearing, appliance and furniture repair]. Goods sellers in the same article are capped at "年交易额累计不超过10万元". The eight carry no cap at all — and yet the tax code makes the registration you are excused from worth having above ¥294,500 a year, which is the arithmetic below.
Almost everyone who sells anything in China is supposed to register a business first, even a one-person stall, and that registration is what brings tax filings, platform paperwork and an inspector's attention with it. The state has carved out a short list of exceptions for people too small to be worth the formality, and the usual assumption is that the exceptions are a gift: stay under the line, stay invisible, keep the money. This edition takes that list seriously and prices it — what the exemption actually covers, where it has no ceiling at all, and at what income the free lane quietly becomes the expensive one.
The money first. Starting capital is ¥3,358.25 [$500 USD] and the target is ¥33,582.50 a month [about $5,000 USD], ¥402,990 a year, struck at the China Foreign Exchange Trade System's central parity of 6.7165 published 28 October 2026. The stake is exactly 10.0% of one target month, which is the first clue that this week's constraint is not capital.
Start with the law the exemption hangs on. 电子商务法 第十条, passed 31 August 2018 and in force 1 January 2019, says "电子商务经营者应当依法办理市场主体登记。但是，个人销售自产农副产品、家庭手工业产品，个人利用自己的技能从事依法无须取得许可的便民劳务活动和零星小额交易活动，以及依照法律、行政法规不需要进行登记的除外" [E-commerce operators shall register as market entities. Excepted are: an individual selling their own farm produce or household handicrafts; an individual using their own skills to carry on convenience-labour services that require no permit; petty small-value transactions; and anything law or administrative regulation says need not register].
That is four exceptions in one sentence, and the market regulator's own rule splits them apart. 令第37号 第八条 gives the skill limb a list of eight named trades and gives the trading limb a number — ¥100,000 of cumulative annual turnover, with "同一经营者在同一平台或者不同平台开设多家网店的，各网店交易额合并计算" [where one operator runs several shops on one platform or across platforms, the shops' turnover is added together] to stop the obvious workaround. No equivalent sentence exists for the eight trades. Clean a flat, unblock a drain, cut a key: the statute asks how, not how much.
Offline, the older instrument says the same thing from the other direction. 无证无照经营查处办法, signed by 李克强 as 国务院令第684号 on 6 August 2017 and in force 1 October 2017, provides at 第三条 that "在县级以上地方人民政府指定的场所和时间，销售农副产品、日常生活用品，或者个人利用自己的技能从事依法无须取得许可的便民劳务活动" is not unlicensed trading at all. 第十三条 is what sits on the other side of that line: confiscation of the illegal proceeds and a fine to ¥10,000 where no other law sets the penalty. Shanghai supplies the designation the first limb needs — 沪绿容规〔2025〕1号, issued by 上海市绿化和市容管理局 with the municipal government's agreement and in force from 5 August 2025, lets districts mark out public areas for trading and sorts them into 疏导点、管控点、特色点 [relief points, controlled points, feature points].
So the entry gate is open and free. The non-consensus part is what happens next, because the tax code does not follow the registration code. An unregistered person doing this work is paid 劳务报酬, which lands in 综合所得 and carries a statutory cost deduction of 20% that nobody has to document. A registered 个体工商户 is taxed on 经营所得, deducts only costs it can prove, and then halves the result: 国家税务总局公告2023年第12号 第一条 says "对个体工商户年应纳税所得额不超过200万元的部分，减半征收个人所得税", running 1 January 2023 to 31 December 2027.
Set the two tables against each other and they cross exactly once. Using 个人所得税法 第三条's own schedules and the ¥60,000 standard deduction on each side, the unregistered bill is 0.16A − 28,920 and the registered bill is 0.1A − 11,250 over the stretch that matters, so they meet at ¥294,500 a year — ¥24,541.67 a month, $3,653.94. Below that line the exemption is worth money; above it the halving wins. That crossing belongs to an operator who can prove no costs at all; prove 5% of revenue and it falls to ¥146,769.23. At the ¥402,990 target, registering saves ¥4,359.90 a year, and value-added tax is nil either way because ¥33,582.50 of monthly sales sits under the ¥100,000 起征点 that 财政部 税务总局公告2026年第10号 holds to 31 December 2027.
Who is on the other side? The 国家统计局's 2025 wage release, published 15 May 2026, prices exactly these trades. 居民服务、修理和其他服务业 — the industry heading that contains cleaning, repair, laundry and hairdressing — paid an average of ¥70,226 in urban non-private units and ¥52,059 in private ones, and the private figure fell 0.2% on the year while the national private average rose 3.0%. The target is 7.741× that private average. The statute removes the ceiling on paper and the labour market puts one back, because the exemption is written around 自己的技能 — your own skill, your own hands. The moment you hire a second pair, you are outside 第十条 and inside the registration regime you were excused from. That is the finding: the free lane is uncapped in law and capped at about ¥52,059 in practice.
The evidence
12 findingsFour exemptions in one sentence, and only one of them is about skill
第十条: "电子商务经营者应当依法办理市场主体登记。但是，个人销售自产农副产品、家庭手工业产品，个人利用自己的技能从事依法无须取得许可的便民劳务活动和零星小额交易活动，以及依照法律、行政法规不需要进行登记的除外。" [E-commerce operators shall register as market entities, except: individuals selling their own farm produce or household handicrafts; individuals using their own skills in convenience-labour services requiring no permit; petty small-value transactions; and cases where law or administrative regulation requires no registration.] The operative words for this edition are 个人利用自己的技能 — the exemption attaches to a person's own skill, not to a business. 国家税务总局 法规库.
The regulator names the eight trades, and gives only the other lane a number
第八条: "个人通过网络从事保洁、洗涤、缝纫、理发、搬家、配制钥匙、管道疏通、家电家具修理修配等依法无须取得许可的便民劳务活动，依照《中华人民共和国电子商务法》第十条的规定不需要进行登记。" [An individual carrying on, through a network, cleaning, laundry, sewing, hairdressing, removals, key-cutting, drain-clearing, appliance and furniture repair and other convenience-labour services requiring no permit need not register under article 10.] The next paragraph: "个人从事网络交易活动，年交易额累计不超过10万元的…不需要进行登记。" and then "同一经营者在同一平台或者不同平台开设多家网店的，各网店交易额合并计算。" One lane gets a ceiling and an anti-splitting rule; the other gets a list. 浙江省人民政府 规章全文.
Offline, the same skill limb — and the fine if you fall outside it
第三条: "下列经营活动，不属于无证无照经营：（一）在县级以上地方人民政府指定的场所和时间，销售农副产品、日常生活用品，或者个人利用自己的技能从事依法无须取得许可的便民劳务活动；（二）依照法律、行政法规、国务院决定的规定，从事无须取得许可或者办理注册登记的经营活动。" 第二条 states the prohibition it carves out of, and 第十三条 sets the residual penalty: "责令停止违法行为，没收违法所得，并处1万元以下的罚款" [order the conduct stopped, confiscate the illegal proceeds, and fine up to ¥10,000]. 中国政府网 国务院公报.
Shanghai supplies the designation the offline limb requires
The guidance lets districts "划定一定的公共区域用于从事经营活动" [mark out defined public areas for trading] and sorts the designated places into 疏导点、管控点、特色点, each with a scheme fixing area, hours, trade mix and management requirements. It is the municipal instrument that turns 国务院令第684号 第三条's phrase "县级以上地方人民政府指定的场所和时间" into an actual address and an actual time window. The document is silent on licences: it neither requires nor excuses a 营业执照, which is why the question is answered by 第三条 and not here. 上海市人民政府门户网站.
Two schedules, two deduction rules, and that is the whole trade
第三条: "（一）综合所得，适用百分之三至百分之四十五的超额累进税率；（二）经营所得，适用百分之五至百分之三十五的超额累进税率". 第六条第一款第（三）项: "经营所得，以每一纳税年度的收入总额减除成本、费用以及损失后的余额，为应纳税所得额" [business income: gross receipts for the year less costs, expenses and losses]. The 综合所得 schedule runs 3% to ¥36,000, 10% to ¥144,000, 20% to ¥300,000, 25% to ¥420,000, 30% to ¥660,000; the 经营所得 schedule runs 5% to ¥30,000, 10% to ¥90,000, 20% to ¥300,000, 30% to ¥500,000, 35% above. 国家税务总局上海市税务局 税率表 · 国家税务总局广东省税务局 税率表汇编.
The 20% the unregistered lane never has to prove — and the withholding that follows it
第八条: "减除费用：预扣预缴税款时，劳务报酬所得…每次收入不超过四千元的，减除费用按八百元计算；每次收入四千元以上的，减除费用按收入的百分之二十计算。" [Deduction: where a single payment is ¥4,000 or less, deduct ¥800; above ¥4,000, deduct 20% of the payment.] The same article routes the result to 预扣率表二 — 20% to ¥20,000, 30% to ¥50,000 with a ¥2,000 quick deduction, 40% above with ¥7,000. The deduction is automatic and needs no invoice; the withholding is monthly and the balance comes back only at the annual reconciliation. 国家税务总局 法规库.
The halving that only a registered 个体工商户 can reach
第一条: "对个体工商户年应纳税所得额不超过200万元的部分，减半征收个人所得税。" 第七条 fixes the window at 1 January 2023 to 31 December 2027. The relief is drafted to a status, not to an activity: the identical work done by an unregistered individual cannot claim it, which is what makes the registration decision an arithmetic question rather than a compliance one. 国家税务总局 法规库.
Value-added tax is not the question at this size
"自2026年1月1日至2027年12月31日，小规模纳税人发生应税交易，起征点标准如下…以一个月为一个计税期间的，起征点为月销售额10万元。" and "依照3%征收率减按1%征收率征收增值税". The target month, ¥33,582.50, is a third of the threshold, so the whole route is outside VAT on either status and the comparison reduces cleanly to income tax. 中华人民共和国财政部.
The one industry whose private-sector wage fell is the one the statute frees
"2025年全国城镇非私营单位和私营单位就业人员年平均工资分别为129441元和71590元", up 4.3% and 3.0%. Within that, 居民服务、修理和其他服务业 — the heading that holds cleaning, repair, laundry and hairdressing — paid ¥70,226 in non-private units, up 3.0%, and ¥52,059 in private ones, down 0.2% against a +3.0% private average. The exemption is generous precisely where the pay is not. 国家统计局.
16.194 million new 个体工商户 in one year, and 184,000 that the regulator calls premium
The release reports 1,619.4万 newly registered 个体工商户 in 2025; 8,419.8万 that have traded for three years or more, 65.8% of all of them and 9.7 points higher than at the end of 2020; businesses trading on online platforms up 14.7% year on year; and 18.4万 rated 名特优新, with a median operating life of 8.4 years. The 65.8% is a share of the standing stock, not a cohort survival rate, and no deregistration count is published. 新华网.
The two lanes cross exactly once, at ¥294,500 a year
Unregistered: base = 0.8A − 60,000; for A between ¥255,000 and ¥450,000 that base sits in the 20% band, so tax = 0.2(0.8A − 60,000) − 16,920 = 0.16A − 28,920. Registered: base = A − 60,000; for A between ¥150,000 and ¥360,000 that base sits in the 20% business band, so tax = 0.2(A − 60,000) − 10,500 = 0.2A − 22,500, halved to 0.1A − 11,250. Equate: 0.06A = 17,670, A = ¥294,500, ¥24,541.67 a month, $3,653.94 at 6.7165, each paying ¥18,200. At the ¥402,990 target: unregistered ¥35,558.40, registered ¥31,198.50, a saving of ¥4,359.90. At the ¥52,059 industry average both are ¥0, because 0.8 × 52,059 = ¥41,647.20 and 52,059 − 60,000 are both under the deduction. The ¥294,500 assumes the registered lane can prove no costs at all: at 5% of revenue proved the crossing falls to ¥146,769.23, at 15% to ¥127,200, and at 20% to ¥75,000, where income tax begins.
¥37,159.20 lent to the state for up to fourteen months, against a ¥4,359.90 saving
One payer paying ¥33,582.50 a month withholds on 33,582.50 × 0.8 = ¥26,866.00, which falls in 预扣率表二's second band: 26,866 × 30% − 2,000 = ¥6,059.80 a month, ¥72,717.60 a year. The liability is ¥35,558.40, so ¥37,159.20 — 104.5% of the tax actually owed — is held until the annual reconciliation, which opens the following 1 March. Against that, the registration saves ¥4,359.90 a year, so the float is 8.52× the headline saving. Separately, the target of ¥402,990 is 7.741× the ¥52,059 private-sector average for these trades, and the ¥3,358.25 stake is 10.0% of one target month.
The ladder
From $500 to $5,000 a month · ¥3,326 → ¥33,265电子商务法 第十条 carries four exemptions and 令第37号 第八条 separates them. Selling goods is capped at ¥100,000 of annual turnover, added across every shop you open. Using your own skill on the eight named trades is capped at nothing. If what you do is sell things, this edition's arithmetic does not apply to you past ¥100,000; if what you do is work, it applies all the way up.
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Check which limb you are standing on, because only one of them has no ceiling
电子商务法 第十条 carries four exemptions and 令第37号 第八条 separates them. Selling goods is capped at ¥100,000 of annual turnover, added across every shop you open. Using your own skill on the eight named trades is capped at nothing. If what you do is sell things, this edition's arithmetic does not apply to you past ¥100,000; if what you do is work, it applies all the way up.
goods ¥100,000/yr · skill: no number in the text -
Pick a trade from the regulator's own list rather than arguing about the category
保洁、洗涤、缝纫、理发、搬家、配制钥匙、管道疏通、家电家具修理修配. The list ends in 等, so it is open, but a trade named in the text needs no argument with an inspector and a trade outside it needs one. Drain-clearing and appliance repair are the two with the highest ticket per visit and the lowest competition from platforms, which matters at rung four.
第八条 · eight named, list open with 等 -
Spend the ¥3,358.25 on tools, not on formation, because formation is free either way
The stake is 10.0% of one target month, which is not enough to buy a position and is exactly enough to buy a trade's starting kit. There is no licence to buy: 第三条 of 国务院令第684号 says the activity is not unlicensed trading, and 第十条 says it need not register. If you work a pitch rather than a van, Shanghai's 沪绿容规〔2025〕1号 tells you which public areas the district has designated and in what hours.
3,358.25 ÷ 33,582.50 = 10.0% of a target month -
Solve for the hour, because the statute protects skill and skill is sold by time
国家统计局 puts the 2025 private-sector average for exactly these trades at ¥52,059 and the non-private average at ¥70,226, and the private figure fell 0.2% in a year when the private average rose 3.0%. The target is 7.741× the first. Everything that moves you up this ladder moves price per visit or visits per day: the exemption gives you nothing on either.
402,990 ÷ 52,059 = 7.741× -
Register at ¥294,500 a year, and not before
Below the crossing, the automatic 20% cost deduction on 劳务报酬 beats the 50% halving on 经营所得, because the halving applies to a bigger base. Above it, the halving wins. The crossing is ¥294,500 a year, ¥24,541.67 a month, and that figure belongs to an operator who can prove no costs at all. Prove 5% of revenue in deductible costs and the crossing collapses to ¥146,769.23; prove 20% and it falls to ¥75,000, where income tax begins. ¥294,500 is the ceiling on the decision, not the target.
0.16A − 28,920 = 0.1A − 11,250 → A = 294,500 -
Price the withholding float, because it is larger than the saving it hides behind
A single payer paying monthly withholds ¥6,059.80 against a monthly liability nearer ¥2,963, so ¥37,159.20 a year sits with the state until the reconciliation window opens on 1 March. That is 8.52× the ¥4,359.90 that registering saves. Registered, 经营所得 is filed quarterly on what you actually earned, and the float largely disappears — which is the real reason to register, not the headline relief.
72,717.60 − 35,558.40 = 37,159.20 held -
Know where the exemption ends, because it ends at your own hands
第十条 exempts 个人利用自己的技能. Hire a second person and the work is no longer your own skill, the exemption lapses, and registration becomes compulsory rather than optional. That is also the only route from ¥52,059 to ¥402,990, since one pair of hands has a day in it. The ladder therefore does not end in a bigger exemption; it ends in the registration regime, and the question is only whether you walk there deliberately.
自己的技能 · personal, non-delegable
Sources
12 primary documents- 《中华人民共和国电子商务法》第十条 — adopted 31 Aug 2018, in force 1 Jan 2019. Read 1 Nov 2026.
- 《网络交易监督管理办法》第八条 — 国家市场监督管理总局令第37号, 15 Mar 2021, amended 令第101号 18 Mar 2025, in force 1 May 2021. Read 1 Nov 2026.
- 《无证无照经营查处办法》第三条、第十三条 — 国务院令第684号, signed 李克强 6 Aug 2017, in force 1 Oct 2017. Read 1 Nov 2026.
- 《关于进一步规范设摊经营活动的指导意见（试行）》 — 沪绿容规〔2025〕1号, 上海市绿化和市容管理局, in force 5 Aug 2025. Read 1 Nov 2026.
- 《中华人民共和国个人所得税法》第三条、第六条 — 国家税务总局. Read 1 Nov 2026.
- 个人所得税税率表（经营所得适用）及预扣率表二 — 国家税务总局广东省税务局, 9 Oct 2025. Read 1 Nov 2026.
- 《个人所得税扣缴申报管理办法（试行）》第八条 — 国家税务总局公告2018年第61号, 21 Dec 2018. Read 1 Nov 2026.
- 国家税务总局公告2023年第12号 第一条、第七条 — 2 Aug 2023, applies 1 Jan 2023 – 31 Dec 2027. Read 1 Nov 2026.
- 财政部 税务总局公告2026年第10号 — 30 Jan 2026, ¥100,000 monthly 起征点. Read 1 Nov 2026.
- 《2025年城镇单位就业人员年平均工资情况》 — 国家统计局, 15 May 2026. Read 1 Nov 2026.
- 国家市场监督管理总局 个体工商户 figures — 新华社, 记者戴小河, 26 Mar 2026. Read 1 Nov 2026.
- 人民币对美元汇率中间价 — 中国外汇交易中心 via 新华社, 28 Oct 2026: 1 USD = 6.7165 CNY. Read 1 Nov 2026.
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