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China Investment Overview

Updated:2018-2-28 17:49:16    Source:TannetViews:601

China is the world’s most populous country, with 1.3bn people living on9.6msq km of land. China is one of the world's largest trading countries and one of the fastest growing economies in the world. China's infrastructure is well established and its legal system is sound, creating a good business environment for investors. In 2015, China’s Premier Li Keqiang put forward the "Public entrepreneurship, Innovation" in the government report. Meanwhile, the State Administration for Industry and Commerce cancelled the requirement about the minimum registered capital. These preferential policies attract and encourage more and more domestic and foreign investors to start their own business in China.

I. China Investment Environment
The nation comprises 5 autonomous regions, 23 provinces, 4 municipalities and 2 special administrative regions. The huge land is rich in natural resources and cultural deposits, due to its size, the climate, culture, as well as economic diverse. And since the implementation of the reform and open-up policy,Chinahas been seen a booming economic, which brought not only numerous business opportunities, but also investors all over the world. In recent years,China's infrastructure has also been greatly improved, providing foreign investors with good conditions in production and operation.

II. China Legal Environment
Chinese government has accelerated the legislative work of various laws. With the improvement ofChina's foreign-related economic laws and regulations, the market access to trade in goods has been improved. EnteringChinamarket for foreign investors has become much easier than before.

III. China Company Forms
1. China company forms: WFOE, CJV, EJV, Domestic company;
2. Documents required forChinacompany registration:
*Confirm the company name, business scope, registered capital and company shares;
*Passport or ID card copies of Legal representative, Executive director, General manager and Supervisor;
*Two original Lawyer’s legalization or notarization which should be endorsed by local China Embassy or Consulate within 6 months (for foreign invested company);
*Chinacompany’s business license, company stamp and article of association (for JV);
*Online banking USB of Shareholders, Legal representative, Executive director, General manager and Supervisor (forChinadomestic company).

VI. China company registration and China regulations
1. China company format: China government has a name format for anyone who wants to setup a company in China, the format is: City name + trade name + business scope+ limited. If using the province name or even using “China” instead of the city name, the name should be applied in the province authority or Beijing. And only Chinese company names are officially used, while English names are for reference only. Any names are subject to the approval of relevant authority.

2. China company members: The positions of Legal Representative, Executive Director, General manager and Supervisor can be taken by either Chinese or foreigners. The Legal Representative should be acted by Executive Director or General manager.

3. China company registered capital: In China, the registered capital is different from varied situations and sectors. Since 2014, the requirement about the minimum capital is cancelled. Investors can decide the amount of registered capital by themselves. And the capital could be paid up within 30 years from the date of issue of Business License.

4. China company business scope: One of the most important issues is to define the business activities of the company. Business scope is narrowly defined based on many factors, such as trade names, registered capital and business scope. AChinacompany can only conduct business within its approved business scope on the business license. Amending the business scope will need further application and approval. For some sectors such as education, logistics, medicine and food industries, pre-approval license is needed before we enter into normal processes. 

V. China company account opening and company changes
1. China company account opening: The four China major national banks are preferred by many investors. To apply for the company basic account opening, all company documents including business license are needed as well as the lease certificate of the registered address. The presence of the legal representative is required in the bank. After the basic account opened, investors may open capital account and foreign currency accounts according to their own needs.

2. China company changes: During the operation of the company, changes of shares, company members, business scope, company name and registered address may be involved. Any changes should be applied in local authorities.

VI. China company registration procedures
Step1: Let clients fill out the application form (sign the agreement);
Step2: Confirm the company name, business scope, registered capital and company shares;
Step3: Check the required documents for the clients;
Step4: Pay the services;
Step5: Prepare for the statutory documents for the investors to sign personally;
Step6: Forward documents to related government departments;
Step7: Keep clients informed of processing;
Step8: Finish processing in 15-35 working days;
Step9: Collect the documents and items and settle the balance if any.

VII. Follow-up services for China company
1. China company annual filings: A China company should file the annual report within the period between January 1 and June 30 every year.
2. China company payroll services: After the company registered, Tannet is able to provide with the services of employing staff, buying social securities for employees, labor contract draft, foreign employees work permits application.
3. China company special licenses application: For some industries, special permit is needed before the company is allowed to conduct the related business. Tannet helps clients to apply for Import/Export permit, Food circulation license, Medical equipment business license, Non-vessel operating common carrier certificate (NVOCC), ICP, etc.
4. China company shares agreement draft: With the development of the company, shares transfer or changes are common needs. Tannet is concentrating on drafting agreements, contracts and plans for clients, such as shares transfer agreement, equity investment agreement, the establishment of ownership structure, stock incentive plan, etc.

VIII. China company accounting, bookkeeping and tax filing
1. A Chinese company is required to file taxes after registration. If not filing taxes in time, penalties from tax bureau will be caused. Moreover, it will bring negative records to the credit of the clients.
2. China company tax filing hints: The company should file taxes monthly, quarterly and yearly according to different type of taxes. The main types of taxes for a China company include Business income tax  (25%), VAT (3%-17%),  Sales tax (3%-20%).
3. Fapiao and Fapiao stamp: In China, official invoices are made by tax bureau, which is called Fapiao. The company should apply for Fapiaos from tax bureau and have a Fapiao stamp on it when issuing the Fapiao.

IX. Tannet Services
TANNET package services of company registration include:
1. One copy of original Approval Record Receipt for Foreign Invested Enterprise (for foreign invested type of company);  
2. One copy of original Articles of Association signed & sealed by investors;
3. Both original and duplicate copy of business license;
4. Three stamps for different use; Bank account documents; Customs declaration registration certification;
5. Verification report (if needed);
6. Company basic account opening (if needed);
7. Import/Export license and General tax payer application (if needed).

X. China company transfer and deregistration
1. Equity transfer: The form of equity transfer of aChina company mainly includes two kinds, namely, inner shares transfer among shareholders of the company and transferring shares to new shareholders. Witness and notary are needed for share transfer and the share transfer agreement is the most important part of the whole procedures. Tannet will help draft the agreement by professional lawyers.

2. Company deregistration: According to the provisions of the Company Law, the company shall, within 30 days after the liquidation report, go through the deregistration procedures of the company in the related authorities. The deregistration procedures include the cancellation of the national and local tax, business license, company stamps, company accounts, and the company's approval certificate. In the process of cancellation of the company, a liquidation report would be required by related government departments. It takes around 6-8 months to finish the deregistration procedures.

XI. Advantages of Registering China Company
1. China is the hugest market in the world. The fast economic growth and well developed infrastructure provide investors with a good commercial and legal environment.
2. China government has put forward the "four" strategic approach: innovation and entrepreneurship, the Internet +, the Belt and Road Initiative, the credit system. The preferential polices are aimed to attract investors and provide a better platform for them.
3. China provides different levels of government subsidies to hi-tech industries, greatly reducing the cost of business start-ups and investments.
4. China has set up free trade zones in Shanghai, Shenzhen, Guangzhou, Xiamen, Tianjin and other cities. In the free trade zones, both Chinese and foreign individuals are able to open free trade accounts, which brings great convenience for transactions. And China free trade zones carry out preferential tax policies for companies registered inside the zones.
5. China has signed bilateral free trade agreements with more than 20 other countries and regions, reducing import and export tariffs and providing a great convenience in terms of product circulation and foreign trade.

XII. Tannet Advantages
1. TANNET has established a global service system with 38 branches and 3000 cooperators worldwide, as well as in excess of 60,000 reliant clients globally. You can find one TANNET always beside you.
2. TANNET is staffed with a strong professional team of lawyers, accountants, engineers, designers and consultants providing tailor-made and all-in-one service.
3. There is a B2B business platform available for the international buyers and sellers of SMEs, www.ono-bbb.com.
4. TANNET is the best partner with international banks, financial institutes. TANNET also provide PIPO service.
5. TANNET is in conformity of the standard of ISO9001/2008. That means the service quality is guaranteed.

XIII. Contact Us
If you have further enquire, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling  Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com.

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