Exclusively Foreign-owned Enterprise (set up companies in China)

To develop Chinese market in direct way, foreigners or overseas enterprises are allowed to set up company in China as shareholders, and for registering company, the matters involved are as follows:

1. Examination and approval of company name

Method: work out company name and submit for verification.

2. Registered address

Method: For registered address, both actual business address and virtual or incubator one will be accepted.

3. Scope of business

Method: map out the scope of business, describing it extensively and completely.

4. Registered capital

Method: implement subscription system with international mainstream currency such as U.S. dollar, euro, English pound and Japanese yen. There are generally not limits for the subscribed registration amount.

5. Legal representatives and other persons in charge

Method: staff like legal representatives, shareholders, supervisors and financial administrators should be designated.

6. Issuance of business license

Result: obtain business license in hard copy and electronic edition with the same legal force.

7. Seal engraving

Result: enterprises need to, by themselves, apply for the engraving of enterprise common seal, special seal for contractual uses, special financial seal and special seal for invoice.

8. Open bank account

Method: Generally, basic account for enterprises can be opened in any banking offices.

9. Tax Reporting

Method: enterprise information should be submitted according to business type.  The application can be completed by yourself as small-scale taxpayer or general taxpayer.  And with tax reporting, tax categories should be checked and ratified.

10. Apply for fiscal processor and invoice

Method: Apply for fiscal processor (tax disc or Ukey) according to the tax categories that have been checked and ratified, which is a must equipment for issuing invoice in future. Apply for paper invoice or electronic invoice with fiscal processor.

11. Account opening for social insurance and provident funds

Method: submit enterprise information to apply for opening account to pay social insurance and housing provident fund for employees; sign agreement of withholding and remitting so that relevant fees can be automatically deducted from the bank account of enterprises.

12. Monthly tax declaration and annual report.

Method: after the establishment of company, tax declaration should be made per mensem, and annual report of last year should be completed before June 30 of each year. This task can be completed by the financial staff of the company or by the financial staff from the third-party accounting service agency.

13. Business license (based on business needs)

Method: for the sale or wholesale of foods pesticides, veterinary drugs, publications, artworks, hazardous chemicals and medical apparatus and instruments, respective business license is needed for each. Surely, license of this type won’t be needed if there are not such products involved in the actual business.

Notes:    

1. For export and import practice, it is not necessary to fill in the record form for foreign trade operators, what is needed is only to make recording of foreign trade operators on line at the sole window in the customs. 

2. For sale of prepackaged food, only online operation record is needed, without the need of examining and approving of food business license.

3. Foreigners can act as legal representatives and heads of enterprise, who do not need to come to China in person to go through the company registration. Instead, it is only required to provide relevant identity documents and other information.

4. The specific operations like monthly tax declaration and invoice issuance can be completed by entrusting the third-party accounting service agencies.

Benefits for foreign businessmen:

1. Direct expansion on Chinese market, and establish your own supply chain and client base.

2. More convenience on making use of tax rebate of import and export and other trade preference according to Regional Trade Agreement.

3. More convenience on taking part in various market activities within China.

4. More convenience on laying out comparative advantages with production factors of China, bringing benefits to enterprises in their global business development.

5. Convenience on joining e-commerce platform

6. More benefits to the legal protection for one's own business, avoiding transnational lawsuit.