Here’s an interesting fact: Why do so many influencers who do brand deals register as sole proprietorships? The main reason can be summed up in two words: tax savings.

For example, suppose you make 5 million yuan a year from brand deals. In some places, sole proprietorships can get a 3% fixed tax rate, which is really attractive. After all, brands need invoices to make payments, and business-to-business transfers are unavoidable.

But how does this compare to other places?

In Hong Kong, the calculation is different: the first 2 million is taxed at 8.25%, and the remaining 3 million at 16.5%, which adds up to about 660,000 in taxes.

If you go through the standard process in mainland China, there's a minimum 6% VAT, plus a 25% corporate income tax. Roughly calculated, that’s nearly 1.5 million in taxes.

That’s why people in the know are always researching tax planning strategies—the same income, with different approaches, can leave you with several times more money in hand. Of course, optimization should always be done within legal and compliance boundaries.