Article 1 In order to adapt to new situation upon

Article 3 The foreign investor to establish a foreign holding agency shall be eligible for the following conditions: (1) Being a travel agency or an enterprise mainly undertaking tourism; (2) With total annual amount of tourism more than USD40m; (3) Being a member of the national (regional) association of tourism; (4) Being in good international credit with advanced management experience of travel agency; (5) Abiding by Chinese laws and the relevant Chinese regulations of tourism. Article 4 For the foreign investor of wholly foreign-owned travel agency, besides meeting the conditions prescribed in Article 3 (1), (3), (4) and (5) of the Provision, the annual total amount of tourism prescribed in (2) should be more than USD500m.

Article 5 The Chinese investor of a foreign holding agency shall meet the conditions prescribed in Article 29 of the Regulation of Travel Agency Management.

Article 6 The foreign holding and wholly foreign-owned travel agency to be established shall meet the following conditions: (1) In compliance with development planning of tourism; (2) In compliance with the requirements of tourist market; (3) With investors meeting the conditions prescribed in Articles 3, 4 and 5 of the Provision; and (4) With registered capital no less than RMB4m.

Article 7 The eligible foreign investor can establish a foreign holding and wholly foreign-owned travel agency in the national tourist and holiday area approved by the State Council and 5 cities, including Beijing, Shanghai, Guangzhou, Shenzhen and Xi’an.

Article 8 In general, for an investor applying for establishing foreign holding and wholly foreign-owned travel agencies, only one agency will be approved.

Article 9 The Application for establishing foreign holding and wholly foreign-owned travel agencies shall be processed by reference with the procedure for examining and approving of foreign-invested travel agencies as specified in the Regulation of Travel Agency Management.

Article 10 The foreign holding and wholly foreign-owned travel agencies may not directly or in disguise engage in tourism businesses relating to going abroad of Chinese citizen or Chinese people in other regions going to Hong Kong, Macao, and Taiwan regions.

Article 11 The responsibility for interpretation of the Provision shall be vested with the State Administration of Tourism and the Ministry of Commerce.

Article 12 The Provision shall come into force 30 days after their promulgation. 

Chapter I General Provisions
Chapter II Basic Systems
Chapter III Examination, Approval and Register
Chapter IV Equity-payment-based Takeover of Domestic Companies by Foreign Investors (more…)

By Vincent Cheung from www.pathtochina.com  

Hotel, seal engraving, printing, secondhand goods, audio-visual products, Dance club, karaoke(with boxes), video game house, pool club, swimming pool，Cinema, theatre, venues where audio-visual products are played, Café house, tea house, restaurant where sells alcohol，Stadium rink, commercial shooting range.

 By Vincent Cheung From www.pathtochina.com

What Are the Requirements for the establishment of a Beauty Salon?

To Get the Certificate of Approval

To set up a beauty salon, You need to rent a place first. It has to be a store for commercial use and is allowed to be used as beauty salon, so you cannot have your beauty salon built in an office block or in a residential building. Besides, you are required to invest at least 140,000 USD, or there is little possibility of your application being approved by SMERT( Shanghai Municipal Economic Relation & Trade).  

To Get the “Public hygiene License” and Approval from Fire Department  

Upon the issue of the certificate of approval by SMERT, you can start to apply for “Public hygiene License” to Shanghai Municipal Health Bureau. The authority is a bit strict with this procedure. Required hygiene facilities, such as disinfectant cabinet and disinfectant pool, should be installed when the officials from the health bureau are carrying out inspection. Your firefighting facilities will be examined by the fire department of the public security bureau, a “Firefighting Safety Inspection (more…)

By Vincent Cheung from www.pathtochina.com

To those who are about to do trading business in China, the major advantage and purpose of setting up a Hong Kong company as the parent company and operating in the subsidiary trading company in mainland is tax avoidance. In Shanghai, there are a few company formation consulting conamies  that can help you establish a Hong Kong limited company and open Hong Kong bank account without having you fly to Hong Kong. It only takes three weeks and around 10,000 RMB to set up a Hong Kong company. It’s a very popular way for foreign investors to do trading business in Shanghai  and avoid tax by setting up a Parent Hong Kong company at the same time. Below is a detailed and practical introction about tax avoidance by employing formula.

Hong Kong adopts a territorial source principle of taxation. Only profits made in Hong Kong are taxable. Profits generated elsewhere are not subject to taxation. Different countries and areas follows different principles of taxation. For instance, in China, all of the profits, including those made overseas, are taxed by China government. In order to substantially lower the taxation burden, we can take advantage of the difference in taxation systems and policies in different places by using

Hong Kong companies to do entrepot Trade. The advantages of doing Import/export trade are as follows:

1)      Lower the cost of tax and accelerate the enterprises’ capital accumulation

2)      Avoid the loss incurred in the settlement of foreign exchange and lower the risk of exchange.

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By Vincent Cheung from www.pathtochina.com

Suppose that your trading WFOE is now established in Shanghai. You might will need to apply for the “General VAT Payer Status” (一般纳税人) in order to issue VAT invoice. Whether you should apply for general Vat payer status depends on your gross profit rate. VAT invoice is only use at the wholesale chain, between manufacturers and the wholesalers, or between manufacturers. Retailers selling goods directly to the final consumers don’t issue  VAT special invoices. Instead, state ordinary invoices inclusive of taxes at 4% to 6% are used. The benefit of issuing VAT license is that you can deduct input VAT from purchases when it pays the out VAT for sales, and get a VAT refund.  In order to be qualified to be a general VAT payer. You can start applying for it if your company meet any of following two requirements. 

 1.      You registered capital is over than 5 Million and the number of staff you hire is over  50.

2.      Your company ‘s annual turnover is more than 1.8 Million. You application will be approved If you can provide the sales contract or letter of intent proving that you will reach that target in a year. (more…)

By Vincent Cheung from www.pathtochina.com  

 1. From November 20005, freight forwarding WFOE are allowed to be established in Shanghai
2. A minimum registered of 5 Million RMB is required for the establishment in Shanghai
3. You need to hire at least five licensed custom brokers

4. Permanent office premises and the necessary facilities are necessary

5. You are only allowed to set up branches after at least one year’s operation in Shanghai and all required registered capital has been contributed

6.20% of your registered capital should be contributed immediately, and the rest should be contributed within two years after the issue of business license. 7.Usually, the set up timing a longer than normal WFOE formation

8.Scope of business of a freight forwarding WFOE is clarified below:(Some of them require approvals)   　

1) Booking cargo space （chartering ship, plane and cargo space）, forwarding, storing and packing;　　

2) Supervision of goods loading and unloading, container assembling and deconsolidation, allocating, transferring and other related short distance transportation service;

3) Declaring at customs, reporting for examination, (more…)

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Contents Provided by Shanghai Daily  

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