Beijing company incorporation (FIPE) becomes more and more popular among young entrepreneurs with their new start ups in China as it requires no registered capital. The term “FIPE” stands for Foreign Invested Partnership Enterprise, which is an unlimited liability business entity set up by more than 2 (including 2) foreign enterprises or individuals; or by foreign enterprises or individuals and Chinese individual, legal person and other organizations within the territory of China.
Advantages of A FIPE
The advantages of establishing a PE, compared with other types of enterprises, include, but not limited to:
1. No requirements on minimum registered capital.
2. Less procedures comparing with WFOE or JV.
3. No corporate income tax for partnership enterprise.
4. Foreign enterprise or individual is allowed to establish a Partnership Enterprise with Chinese individual (While Chinese individual is not allowed to have Joint Venture with foreign investor).
5. Capability of converting RMB profits to US dollars for remittance to its parent company outside of China.
6. The profit distribution of a PE could follow an informal negotiated agreement or abide by scheme adopted in the partnership agreement (while for LLC, profit distributions are according the percentage of investment of shareholders).
Conditions for Establishing A FIPE in China
A partnership enterprise must meet the following requirements:
1. At lease two or more partners;
2. A written partnership agreement;
3. Capital contribution subscribed to or actually paid by the partners;
4. A business name and an office in an office building for the partnership enterprise.
Accounting for FIPE
Once the FIPE is officially registered, it's required to maintain proper accounting records in accordance with accounting standards in China and report taxes in monthly (for business tax, individual income tax) basis. The late submissions will face penalty and surcharges.
A PE must register with the local tax authority for tax reporting method and applying for official invoice book which allow the PE to issue invoice to its clients within China and abroad.
Contact Us
If you have further inquiries, please do not hesitate to contact Tannet at any time.
Tel: 86-10-58694559
86-13717945838
Email: beijing.tannet@qq.com
Web: www.beijing-company.net
Add: Rm1902, Bldg 17, Jianwai SOHO West, No. 39 Dongsanhuan Rd M, Chaoyang Dist., Beijing
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