Archive for the ‘Establishing Business’ Category

Law of the People’s Republic of China on Wholly Foreign- Owned Enterprises

Friday, July 18th, 2008
(Adopted by the Fourth Session of the Sixth National People’s Congress on April 12, 1986,and amended by by the 18th Session of the Standing Committee of the 9th National People’s Congress on October 31, 2000)

Article 1. In order to expand international economic cooperation and technological exchange and to promote the development of China’s national economy, the People’s Republic of China permits foreign enterprises and other economic entities or individuals (hereinafter referred to as foreign investors) to establish wholly foreign-owned enterprises within the territory of China and will protect the lawful rights and interests of such enterprises.

Article 2. Wholly foreign-owned enterprises referred to in this Law mean enterprises established within the territory of China in accordance with the relevant laws of China, the entire capital of which is invested by foreign investors. Such enterprises do not include branch offices established by foreign enterprises and other economic entities within the territory of China.

Article 3. The establishment of wholly foreign-owned enterprises must be beneficial to the development of China’s national economy. The state encourages to establish such enterprises as shall export all or most of their products or adopt advanced technology.

Industries in which the establishment of wholly foreign-owned enterprises is forbidden or restricted by the state shall be stipulated by the State Council.

Article 4. The investment of, the profits obtained by and other lawful rights and interests of foreign investors within the territory of China shall be protected by the laws of China.

Wholly foreign-owned enterprises must observe China’s laws and regulations and shall not harm the social and public interests of China.

Article 5. The state will not nationalize or expropriate wholly foreign-owned enterprises. Under special circumstances, the state, based on the need of social and public interests, may expropriate wholly foreign-owned enterprises pursuant to legal procedures and give commensurate compensation.

Article 6. Applications for the establishment of wholly foreign-owned enterprises shall be examined and approved by the department under the State Council in charge of foreign economic relations and trade or the authorities authorized by the State Council. The examination and approval authorities shall decide to approve or disapprove within ninety days from the date of receiving the application.

Article 7. After the application for establishing a wholly foreign-owned enterprise has been approved, the foreign investor shall, within thirty days from the date of receiving the approval certificate, apply for registration with the administrative authorities for industry and commerce and obtain a business license. The date on which the business license of a wholly foreign-owned enterprise is issued shall be the date such enterprise is established.

Article 8. A wholly foreign-owned enterprise that meets the requirements regarding legal persons as stipulated by the laws of China shall obtain the status of a Chinese legal person according to law.

Article 9. A wholly foreign-owned enterprise shall make the investment within the territory of China within the period approved by the examination and approval authorities. If no investment has been made at the end of the period, the administrative authorities for industry and commerce shall have the right to revoke its business license.

The administrative authorities for industry and commerce shall examine and supervise the investments of wholly foreign-owned enterprises.

Article 10. Reorganization, merger or other important changes of a wholly foreign-owned enterprise shall be submitted to the examination and approval authorities for approval and shall go through the procedures of the administrative authorities for industry and commerce for changes in the registration.

Article 11. No interference shall be allowed in the operation and management activities of a wholly foreign-owned enterprise conducted according to its approved articles of association.

Article 12. A wholly foreign-owned enterprise employing Chinese staff and workers shall enter into contracts according to law and shall specify in the contracts provisions relating to matters of employment, dismissal, remuneration, benefits, labour protection and labour insurance.

Article 13. The staff and workers of a wholly foreign-owned enterprise shall establish a trade union according to law, carry on trade union activities and protect the lawful rights and interests of the staff and workers.

A wholly foreign-owned enterprise shall provide the necessary facilities for the activities of its trade union.

Article 14. A wholly foreign-owned enterprise must keep account books within the territory of China, carry out independent accounting, submit accounting statements according to regulations and accept supervision by the finance and tax authorities.

If a wholly foreign-owned enterprise refuses to keep account books within the territory of China, the finance and tax authorities may impose a fine on the enterprise and the administrative authorities for industry and commerce may order it to stop its business operations or revoke its business license.

Article 15. Supplies such as raw materials and fuel needed by a wholly foreign-owned enterprise within the approved scope of business may be purchased in China or on the international market.

Article 16. All items of insurance of a wholly foreign-owned enterprise shall be insured with insurance companies within the territory of China.

Article 17. A wholly foreign-owned enterprise shall pay taxes in accordance with the relevant tax regulations of the state and may enjoy preferential treatment in tax reductions and exemptions.

If a wholly foreign-owned enterprise reinvests its after-tax profits within the territory of China, it may apply for a refund of part of the income tax already paid on the reinvested amount in accordance with the regulations of the state.

Article 18. The foreign exchange matters of wholly foreign-owned enterprises shall be handled in accordance with the foreign exchange control regulations of the state.

A wholly foreign-owned enterprise shall open an account with the Bank of China or another bank designated by state foreign exchange control authorities. A wholly foreign-owned enterprise shall resolve the balance between its foreign exchange income and expenditure by itself.

Article 19. The lawful profits and other lawful income obtained by foreign investors from wholly foreign-owned enterprises and the funds they receive after liquidation may be remitted abroad.

Salaries and other lawful income of foreign staff and workers of wholly foreign-owned enterprises may be remitted abroad after payment of individual income tax according to law.

Article 20. The term of operation of a wholly foreign-owned enterprise shall be submitted by the foreign investors and approved by the examination and approval authorities. If an extension is needed upon the expiration of the term, an application shall be filed 180 days prior to the expiration of the term with the examination and approval authorities, which shall decide to approve or disapprove within 30 days from the date of receiving the application.

Article 21. When a wholly foreign-owned enterprise terminates, a prompt public announcement shall be made and liquidation shall be conducted in accordance with legal procedures.

Prior to the completion of the liquidation, the foreign investors shall not dispose of the assets of the enterprise except for carrying out the liquidation.

Article 22. When a wholly foreign-owned enterprise terminates, it shall go through the procedures for cancelling its registration with the administrative authorities for industry and commerce and return its business license.

Article 23. The department under the State Council in charge of foreign economic relations and trade shall, on the basis of this Law, formulate detailed rules for implementation which shall come into force after being submitted to and approved by the State Council.

Article 24. This Law shall come into force on the date of promulgation.

Procedures of apply for work permit in China

Sunday, May 25th, 2008

Dear Clients,

Below are the procedures of apply for work permit. As the health report will be expired in 6 months, please prepare the health report ASAP before we obtained your company’s business license.

a. Work permit for Legal Representative or Chief Representative:

[Update: May 20, 2008] For Chief Representative and Representative of a Rep. Office: all representatives of a Rep. Office (including Chief Rep.) need to leave China to apply for their working visa. That means after we submit the application of Rep. Office setting up, you get the properly work permit, you will need return back to home country to apply for working visa there.

For work permit of the legal representative, you will have to do follow steps, if you have any questions about VISA, Please contact with Magic at magic@pathtochina.com :

1. Register in the Police Station to get a registration form of temporary residence [Registration Form Of Temporary Residence [ Click here to see the Example ]

2. Do the Medical checkup and get the health report(appointment tel. 6268-8851 6268-6171)
See this page for details: http://www.sithc.com/english/tijian/index.asp

They will ask you show a business license, and bring photos etc, please print out the attached business license, and check other documents that they required.

After you finish above process, you need to prepare following document, and handle them to us as soon as your company’s business license or Rep. Office’s registration certificate is ready:

  • Passport
  • 5 pictures [2 inch size]
  • Health report
  • Registration form of temporary residence

VERY IMPORTANT: LANDLINE NUMBER.

After you handle the above documents to us, please give us a landline number that could be reach with. Local Visa Authority will call the number that you provide to confirm that you are working for this company. Please make sure that this number will have people to pick up the phone and could answer the phone in Chinese.

Cost: Free service fee+government fee(according the the gov. receipt, around 800RMB)

b. Work permit for other staff of a WFOE:

For WFOE, If the company investment captial less than 3 million USD$. Then only legal representative can apply the working visa here in Shanghai without leaveing. All the other staff has to follow the following procedure:

You have to prepare:

  • Passport copy( give me the original after Step 3)
  • Resume or C.V. Written by yourself
  • Registration Form Of Temporary Residence[ Click here to see the Example ] (give us after Step 3)
  • Qualification Document ( Diploma of bachelor’s or Reference letters from your former company )
  • Working Contract( give us after Step 3)
  • Business License and Organization Code License of the company who employ you
  • Health Certificate ( Appointment number: 021-62688851 or 62686171)( give me after Step 3)
  • 5 Passport Photographs (2 inches size)

If your position reachs GM or Vice GM of the company, you have to provide following 2 extra documents:

  • Company’s Articles of Association (Obtain from Administration of Industry and Commerce)
  • Company shareholder list (Obtain from Administration of Industry and Commerce)

Procedure below:

Step1. Document collect and applicaiton preparation(5 working days)

Step2. We apply a working license(5 working days)

Step3. We apply a visa notice for staff(3 working day)

Step4. With above 2 doc. staff has to goto HK once to get a 30 days Z visa(depend on the schedule)

Step5. After come back with the Z visa, we will apply the work permit for your staff(3 working days)

Step6. We will apply the 1 year working residence permit for your staff (5 working days)

Cost below:

Total 1800RMB(service fee)+government fee(according the the gov. receipt, around 800RMB)

c. Family Member Visa:

Husband/Wife:

  • marrange certificate copy
  • Passport
  • 2 pictures [2 inch size]
  • Registration form of temporary residence
  • Health report

Children(less than 18 years old):

  • Birth certificate copy.
  • Passport
  • 2 pictures [2 inch size]
  • Registration form of temporary residence.

No Health Report required.

Note: Even where all work permit and residence permit requirements are met, clients should not assume that they can gain it automatic. The Chinese immigration authorities, local Labor Bureau have the right to refuse any person permission to work and residence in China.

How to start your business in China and living here legally

Thursday, April 24th, 2008

— A brief Introduction to Types Of business entities in China

You are reading this because you want to find your business solutions in China. If you business is expanding to China, Set up your new business in China, you are looking in the right Place. In this article we will discuss the types of business which you could setting up in China:

as for detailed procedures and fee etc: http://www.pathtochina.com/regcompany.htm

Types of Business setting up in China:

Registration of Representative Office (Rep. Office)
Wholly Foreign Owned Enterprise (WFOE) Registration
Joint Venture
Hong Kong company formation

Before anything, companies should always carry out thorough research of the market. The habitual question amongst would-be investors is the type of business they should seek: a Representative Office, Joint venture or wholly foreign-owned enterprise etc. There is no right answer. Experience suggests a widespread preference for a WFOE amongst Foreign investors in China in recent years.

If you do need decide that a presence is necessary in the market, one easy and cost-effective option is the www.PathToChina.com site, and some other Consultancy companies in China, which allows you to get more information before committing yourself. Following are the brief introduction for types of business.

1. Representative Office in China:
If, having decided, you do need to have a permanent presence, one option is to set up a representative office. Representative Offices are established by foreign companies to engage in business liaison, product promotion, market research, exchange of technology and other permitted activities in China.

Representative Offices could not engage in direct operational activities. It’s prohibit for Rep. Office exporting goods to overseas alone, pay suppliers through Rep. Office’s bank account etc.

If you are thinking about manufacturing or trading in China through a legal entity, the choice is generally between setting up your own wholly owned enterprise or setting up a joint venture or even do Mergers and Acquisition in China.

2. Wholly Foreign Owned Enterprise [manufacturing]:
When looking at the attractions of manufacturing in China weigh up the benefits of subcontracting, or outsourcing, in China. If your company’s manufacturing requirements can be met through an outsourcing operation, this may be the better option. It may be possible to outsource using local manufacturers in China. Much of the myriad of goods on sale in the West bearing a ‘Made in China’ label is manufactured under contract.

In many cases it will not be possible to deal direct with a small Chinese manufacturer; such entities do not possess the all-important license to export the finished goods.

3. trading Wholly Foreign Owned Enterprise in China:
Normally to have a trading WFOE is the better option:
Getting an export/import license has become much easier since March, 2006. It can be organized, and sometimes smaller manufacturers offer low-cost production in conjunction with your Trading WFOE equipped with such a license.

What are the disadvantages of setting up a WFOE?
A disadvantage for an inexperienced investor setting up a WFOE in China is that much of the knowledge, administrative processes and contacts a partner would bring has to be gained the hard way. Strong relationships are a key factor for successful business in China, whether with the local authorities where the enterprise is located or along the supply chain.

4. Consulting and Service WFOE in China:

You could set-up a Consulting WFOE or service WFOE in China if you are looking for provide business services to your clients in China and abroad.
You may find details here: http://www.pathtochina.com/reg_wfoe.htm

5. JOINT VENTURE IN China:
Why chooses a joint venture? What should you look for?

An ideal partner who is honest, entrepreneurial, straightforward in its dealings
committed to the protection of the joint venture company’s IPR
with good market access and local contacts
and bringing with them a first-class workforce and facilities.
What are the problems with going the joint venture route?
(i) Lack of information about the prospective Chinese partner. A foreign company that locates a likely-looking company in China may have little knowledge of the company’s background. In the past it has been hard to gain data about the commercial situation of Chinese companies or to substantiate their descriptions of themselves and their business relationships. This difficulty in carrying out checks to a rigour that would be usual in the West has sometimes meant foreign investors enter into JVs reluctantly, accepting the attendant risks.

However an increasing amount of advice is available nowadays, with Path To China able to make checks on prospective partners and some consultancies that specialize in this area offer comprehensive investigative services, such investigations can provide sufficient information to warn.

(ii) The need to retain comprehensive control. A frequently-cited reason why foreign investors are not attracted to the JV option is a wish to retain comprehensive control over their China production - something a WFOE can offer but not a JV. ]

6. Hong Kong company formation:

Hong Kong, officially the Hong Kong Special Administrative Region is one special administrative regions of China. The territory lies on the eastern side of the Pearl River Delta.

Hong Kong was a dependent territory of the United Kingdom from 1842 until July 1, 1997. Under the policy of “one country, two systems”, the Central Government is responsible for the territory’s defence and foreign affairs, while the Government of Hong Kong is responsible for its own legal system, police force, monetary system, customs policy, immigration policy etc.

Hong Kong remains one of the top twenty trading economies, the world’s third largest financial center.

Hong Kong’s corporate law is strongly based on the British Legal System, the setting up of a Hong Kong is a str. Local businesses are regulated and Hong Kong regards itself as a low tax centre rather than a tax haven. Taxes are levied on proits which is 16.5% since Financial Year 2008/2009. Under special circumstances, a Hong Kong company may even declare business transactions as offshore which are subject o 0% tax in Hong Kong.

As Hong Kong’s role as a major trading and gateway to China mainland and Asia, some companies formed in Hong Kong are for trading purposes generally, while some use it as HQ of it’s operations in China mainland.

Doesn’t like other China cities, Hong Kong has no restrictions on capital transfer in/out of Hong Kong (No Currency Control)

Register a Hong Kong company within 3 weeks and operate it offshore.

http://www.pathtochina.com/hong_kong_company_formation_introduction.htm

Since Beijing hosts 2008 Olympic games, Chinese Government tightened the visa policy. A foreign citizen continue staying and working in China legally means you will need apply for a proper visa while working and invest here.

First, you should know how you apply for a proper visa, you could check www.visainchina.com for more information about types of visa to China.
Currently, F visa is not a good option anymore since government has already make it very difficult to be approved. L visa and Z visa will be the only option, Here is suggestion:

For people who are going to working in Shanghai, Beijing: Apply the 1 year working permit and 1 year residence permit.

You are allowed to apply for work permit and residence as a Legal Representative of a Company or Chief Representative of a Foreign Representative office.

For service in Beijing, Shanghai :WFOE registration, Representative Office setting up, Joint Venture formation could apply work permit and residence as a Legal Representative of a Company or Chief Representative of a Foreign Representative office.

Note:
Even where all work permit and residence permit requirements are met, clients should not assume that they can gain it automatic. The Chinese immigration authorities, local Labour Bureau of foreign affairs have the right to refuse any person permission to work and residence in China.

Catalogue for the Guidance of Foreign Investment Industries (Amended in 2007)

Friday, December 7th, 2007

Click here for the newest Catalogue for the Guidance of Foreign Investment Industries (Amended in 2007)

The Establishment of Foreign R & D Institutions in Shanghai

Thursday, December 6th, 2007

There are three types of foreign-invested R & D institutions:
1. Independent enterprise (company) legal person, including, WFOE, EJV, CJV,
2.FIE’s internal R & D Branch
3. FIE’s internal R & D Department

The Licensing Authorities
Shanghai Foreign Municipal Economic & Trade Commission is responsible for the approval , and Shanghai Science & Technology Commission is responsible for the qualification examination and management.

Encouraged areas for Foreign R & D Institutions
Zhangjiang High-tech Park, Caohejing New Technology Development Zone.

Requirements:
1. The direction of research and development should be in line with China’s technology policy and industrial policy;
2. The investment on research and development of the R & D center should not be less than 2 million US dollars;
3. Have Necessary funds for scientific research, laboratory equipment and other
4. Staff directly engaged in R & D activities should account for not less than 80% of the total number of the R & D centers
5.Fixed premises and organizational
6. other requirements imposed by Licensing authorities’

Item 6 is not applicable to FIEs’ internal R & D department.

Permissible projects :
1. Research and development of the technology and products related to the enterprise

2. Technology transfer of the institution’s own research and development results
3. Technology consultation, technology services related to the institution’s technology transfer of the research and development results.
4. Cooperation with domestic science & research institutes in the in the form of commission or joint development
5. The pilot production of some research and development projects related the enterprise

Detailed Rules of the Implementation of the Examination-Approval and Administration of the Resident Representative offices of Foreign Enterprises in China

Thursday, December 6th, 2007

  (Promulgated on February 13, 1995)
  Whole document
  Detailed Rules of the Ministry of Foreign Trade and Economic Cooperation
  for the Implementation of the Examination-Approval and Administration
  of the Resident Representative offices of Foreign Enterprises in China
  (Promulgated on February 13, 1995)
  Chapter 1 General Principles
  Article 1
  With a view to developing China’s foreign trade, promoting international economic cooperation and fortifying the administration of the resident representative offices of foreign companies, enterprises and other economic entitles in the People’s Republic of China, the present Detailed Rules are formulated in accordance with the Interim Provisions Concerning the Administration of the Resident Representative Offices in China of Foreign Enterprises, which were promulgated by the State Council of the People’s Republic of China on October 30, 1980.
  Article 2
  These Detailed Rules shall apply to the resident representative offices set up within the territory of the People’s Republic of China by foreign traders, manufacturers, shipping agents, contractors, consultant companies, advertising agencies, investment companies, leasing companies and other economic entities (hereinafter called “foreign enterprises”).
  Article 3
  A foreign enterprise which applies for the establishment of its resident representative office in the territory of the People’s Republic of China shall, upon approval by the Ministry of Foreign Trade and Economic Cooperation or its authorized commissions for foreign trade and economic relations (hereinafter called the “examination-approval authorities”) of the provinces, autonomous regions, municipalities directly under the Central Government and of cities with separate listing in the state plan, register with the State Administration for Industry and Commerce or its authorized administrations for industry and commerce (hereinafter called the “registration authorities”) of the provinces, autonomous regions, municipalities directly under the Central Government and of the cities with separate listing in the state plan.
  Article 4
  The resident representative office of a foreign enterprise may, on its behalf and within its business scope, be engaged in such indirect business activities as business liaison, products recommendation, market research, technological exchange, etc. in the territory of the People’s Republic of China.
  Article 5
  Without prior approval and registration, no foreign enterprise shall have its resident representative office or be engaged in any of the business activities set forth in these Rules in the territory of the People’s Republic of China.
  Article 6
  The resident representative office and its staff members of a foreign enterprise shall abide by the laws and regulations of, and shall not injure the national security and social public interests of the People’s Republic of China.
  Article 7
  The business activities conducted by the resident representative office and its staff members of a foreign enterprise pursuant to these Rules shall be protected by law of the People’s Republic of China.
  Article 8
  The essential conditions and requirements for a foreign enterprise to apply for the establishment of a resident representative office are as follows:
  (1) the enterprise must be legally registered in the country where it is located;
  (2) the enterprise must enjoy a good commercial reputation;
  (3) the enterprise must provide the authentic and reliable materials and documents required by these Rules; and
  (4) the enterprise must go through the registration and application procedures as provided for in these Rules.
  Chapter 2 Establishment, Extension, Alteration and Termination
  Article 9
  A foreign enterprise which applies for the establishment of a resident representative office in the territory of the People’s Republic of China shall submit to the examination and approval authorities a written application. The examination and approval authorities shall, within thirty (30) working days, decide whether to approve or disapprove it, and inform the foreign enterprise in due course.
  Article 10
  A foreign enterprise which applies for the establishment of a resident representative office shall commission as its undertaking agency a company which is approved by the competent authorities of the People’s Republic of China and enjoys the right of foreign trade operation, or a foreign economic relations and trade entity or a service unit for foreigners recognized by the examination and approval authorities to submit, on its behalf, to the examination and approval authorities all the documents and materials and go through the application and registration procedures.
  Article 11
  Applications for the establishment of resident representative offices undertaken by the companies, foreign economic relations and trade entities, services units for foreigners directly under the ministries and commissions of the State Council shall be submitted to the Ministry of Foreign Trade and Economic Cooperation for examination and approval; those undertaken by the companies, foreign economic relations and trade entities, service units for foreigners of the provinces, autonomous regions, municipalities directly under the Central Government and cities with separate listing in the state plan shall be submitted to the local commissions (offices) for foreign economic relations and trade at the same level for examination and approval.
  Article 12
  A foreign enterprise which applies for the establishment of a resident representative office shall submit to the examination and approval authorities the following documents:
  (1) an application signed by chairman of the board of directors or general manager of the enterprise with the inclusion of: a brief introduction of the enterprise, purpose of such establishment, and the name, personnel accredited (chief representative and representatives), scope of business, residence period, office location, etc. of the resident representative office;
  (2) a certificate of legal operation (transcript) issued by the competent authority of the country where the enterprise is located;
  (3) a certificate of credit (original) issued by a bank which has business relations with the enterprise;
  (4) letters of authorization signed by the chairman of the board of directors or general manager of the enterprise for commissioning the chief representative and representative(s) of the resident representative office, and resumes of the chief representative and representatives and their identity cards (duplicate). If the chairman of the board of directors is appointed as the chief representative or representative, the letter of authorization shall be signed by no less than two members of the board of directors of the enterprise. In case there is no board of directors in the enterprise, relevant papers shall be signed by the executive director;
  (5) a completed Application Form for the Establishment of Resident Representative Office of Foreign Enterprises and a completed Application Form for the Staff Members of Resident Representative Offices of Foreign Enterprises; and
  (6) other application materials which the examination and approval authorities deem necessary.
  Article 13
  The resident representative office of a foreign enterprise shall be named in the form of Name of Origin Country + Name of Enterprise + Name of City + Representative Office.
  Article 14
  After the enterprise acquires the approval for establishment of a resident representative office, the chief representative of the office shall, within thirty days from the date of receipt of the approval, register with the registration authorities by producing the certificate of approval. In case of failure to go through the registration formalities within the time limit, the certificate of approval shall be invalid automatically and shall be revoked by the examination and approval authorities.
  Article 15
  The resident representative office of a foreign enterprise shall, within thirty days after it has acquired the approval of its application and conducted its registration, go through the formalities with the public security organs, tax authorities, customs administration and banking units by presenting the certificate of approval, registration certificate and certificate of representative.
  Article 16
  The maximum residence period of the resident representative office of a foreign enterprise by one approval shall be not longer than three years. The residence period shall begin on the day of the issuance of the certificate of approval. Where the foreign enterprise intends to extend the period, it shall, sixty days before the expiration of the period, submit an application to the examination and approval authorities through the original undertaking agency and go through formalities for the extension.
  Article 17
  The resident representative office of a foreign enterprise which applies for extension shall provide the examination and approval authorities with the following documents;
  (1) an application for extension signed by the chairman or general manager of the enterprise;
  (2) a business report of the resident representative office during the last residence period;
  (3) a certificate of credit (original) issued by a bank which has business relations with the enterprise;
  (4) a certificate of legal operation (transcript) issued by the competent authority of the country where the enterprise is located;
  (5) a duplicate certificate of approval and a certificate of registration of the resident representative office; and
  (6) an Application Form for Extension of Resident Representative Offices of Foreign Enterprises.
  Article 18
  The resident representative office of a foreign enterprise which had its application for extension approved and obtained a certificate of approval for extension issued by the examination and approval authorities shall, within thirty days after receipt of the approval and by presenting such certificate, go through the formalities with the registration authorities for extension and the formalities with the public security organs, tax authorities, customs administration, banking units, etc.
  Article 19
  Where a foreign enterprise requests for an alteration of its name, a replacement or an addition of the chief representative or representative (s), or an alteration of the business scope, residence period or office location of its resident representative office, it shall, through the original undertaking agency, provide the original examination and approval authorities with an application for alteration signed by the chairman or general manager of the enterprise together with materials relevant to such alterations, and shall fill in the Application Form for Alteration of Resident Representative Offices of Foreign Enterprises. Upon the approval, the resident representative office shall, within thirty days and by presenting the certificate of approval for alteration, go through the formalities with the registration authorities for alteration and the formalities with the public security organs, tax authorities, customs administration, banking units, etc.
  Article 20
  Where a foreign enterprise applies for a revocation of its resident representative office due to the expiration of the residence period or for a termination of the business operation before such expiration, an application for cancellation signed by the chairman of the board of directors or general manager of the enterprise shall, thirty days before the expiration, be submitted by the original undertaking agency to the original examination and approval authorities for record, and the formalities of cancellation pertaining to registration of industry and commerce, permanent residence and record at customs shall be gone through after the clear-ups of debts and taxes and other issues.
  Article 21
  The applications concerning the establishment, extension, alteration and revocation as well as the letters of authorization for the chief representative and representative (s) of the resident representative office of a foreign enterprise shall be written in the Chinese language; if done in other languages, a translation in the Chinese language shall be attached hereto. Should languages other than the Chinese language be used in other materials for application, a translation in the Chinese language shall be attached hereto.
  Article 22
  The examination and approval authorities shall be entitled to, when it deems necessary, require the foreign enterprise which applies for the establishment of a resident representative office to have all or part of the materials for application notarized by the notary organ of the country where the enterprise is located, and to have them certified by the Chinese embassy or consulate in the country where the enterprise is located.
  Chapter 3 Administration
  Article 23
  The Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China and its authorized commissions (offices) for foreign economic relations and trade of the provinces, autonomous regions, municipalities directly under the Central Government and cities with separate listing in the state plan shall, in accordance with the Interim Provisions Concerning the Administration of the Resident Representative Offices of Foreign Enterprises in China promulgated by the State Council of the People’s Republic of China on October 30, 1980 and the present Rules as well as relevant laws and regulations and jointly with other departments concerned, conduct administration, supervision and inspection of (over) the business activities of the resident representative offices of foreign enterprises.
  Article 24
  Resident representative offices of foreign enterprises and their staff members shall comply with the laws and regulations of the People’s Republic of China in respect of entry and exit, residence, industry and commerce, taxation, customs, foreign exchange control, employment of staff members, house-renting and other matters and be subject to the administration, supervision and inspection from the competent departments of the Chinese Government.
  Article 25
  Resident representative offices of foreign enterprises which import exhibits for display on their business premises shall submit to the original examination and approval authorities an application attached with a list of import exhibits, and, upon approval, report to the Customs of the cities where the offices are located for varied and quantitative verification by presenting the approval documents. The Customs shall, in accordance with the Measures of the Customs of the People’s Republic of China on Control over Imports for Temporary Purpose and the Regulations of the Customs of the People’s Republic of China on the Application for Guarantees for Import and Export Goods, give check and clearance of the exhibits after collecting guaranty money equivalent to the duties.
  Exhibits in the guaranty period shall be subject to the Customs control, and shall not be sold, transferred or granted. The exhibits shall, within six months from the day on which they were imported, be re-exported; failure to do that within the period specified, they shall be dealt with in accordance with related provisions.
  Article 26
  A foreign enterprise shall be responsible legally for all the business activities conducted by its resident representative office within the territory of the People’s Republic of China.
  Article 27
  The commissions (offices) for foreign economic relations and trade of the provinces, autonomous regions, municipalities directly under the Central Government and cities with separate listing in the state plan shall, in every January and July, present data concerning all the resident representative offices they approved in the year to the Ministry of Foreign Trade and Economic Cooperation for record.
  Article 28
  The Ministry of Foreign Trade and Economic Cooperation and its authorized commissions (offices) for foreign economic relations and trade of the provinces, autonomous regions, municipalities directly under the Central Government and cities with separate listing in the state plan shall, depending on the seriousness of the case, impose such sanctions as disciplinary warning, suspension of business upon instruction and revocation of the approval on the resident representative offices of foreign enterprises which violate laws and regulations of the People’s Republic of China and the present Rules.
  Chapter 4 Qualifications for Chief Representative and Repre- sentative(s)
  Article 29
  The chief representative and representative (s) of the resident offices of foreign enterprises shall meet one of the following qualifications:
  (1) a foreign citizen with a legitimate passport (excluding foreign students studying in China);
  (2) a Chinese citizen who has the right of permanent residence in a foreign country;
  (3) compatriots from Hong Kong, Macao or Taiwan with valid credentials; or
  (4) where a Chinese citizen (excluding Chinese citizens mentioned in Item 2 of this Article) is employed as the chief representative or representative of its resident representative office, a foreign enterprise shall entrust a local service unit for foreigners or other entity designated by the Government of the People’s Republic of China to process the application and report in accordance with relevant laws and regulations of the People’s Republic of China.
  Chapter 5 Supplementary Provisions
  Article 30
  The present Rules shall apply, mutatis mutandis, to foreign enterprises which apply for the commission of their permanent representatives in China.
  Article 31
  Affairs not covered in these Rules shall be dealt with in accordance with related laws and regulations of the People’s Republic of China.
  Article 32
  The present Rules shall apply, mutatis mutandis, to enterprises in Hong Kong, Macao and Taiwan which apply for the establishment of their resident representative offices in the mainland areas of China.
  Article 33
  The authorities of interpretation of the present Rules resides in the Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China.
  Article 34
  The present Rules shall enter into force as of the date of their promulgation, and the provisions pertaining to Issues for the Examination and Approval of Resident Representative Offices of Foreign Enterprises and of Enterprises in Hong Kong and Macao (No. 272 by Wai Jing Mao Guan) shall be abrogated on the same day.

Measures for the Registration of Resident Lawyers of the Chinese Representative Offices of Foreign Law Firms

Thursday, December 6th, 2007

Measures for the Registration of Resident Lawyers of the Chinese Representative Offices of Foreign Law Firms

  Adopted by the Fourth Standing Executive Council of the Fourth All-China Lawyers’ Association on September 18, 1999

  Article 1 These measures are formulated in light of strengthening the administration of the resident lawyers of the Chinese representative offices of foreign law firms in accordance with the relevant spirit of the Law of the People’s Republic of China on Lawyers and the Statute of All-China Lawyers’ Association.

  Article 2 These measures shall apply to the resident lawyers of the Chinese offices of the foreign law firms that have obtained approval of the Ministry of Justice of the People’s Republic of China for establishment.

   The resident lawyers of the law firms of Hong Kong and Macao that have obtained approval for establishing representative offices in the mainland shall refer to these measures for application.

  Article 3 The resident lawyers of the Chinese offices of the foreign law firms shall be the chief representatives, representatives and foreign lawyers who stay in China for more than 90 days consecutively handling the work of the Chinese representative offices of the foreign law firms that have obtained approval of the Ministry of Justice and have been registered with the State Administration for Industry and Commerce.

  Article 4 The resident lawyers of the Chinese offices of the foreign law firms shall be registered.

  Article 5 The All-China Lawyers’ Association shall be responsible for the registration of the resident lawyers of the Chinese offices of the foreign law firms.

  Article 6 The resident lawyers of the Chinese offices of foreign law firms shall apply to the All-China Lawyers’ Association for registration for the next year from November 20 to December 20 of each year, subject to submitting the following materials:

   1. registration form (in Chinese, duplicate);

  2. credentials made by a chief partner of the foreign law firms attesting the good qualities of the applicant (original in both Chinese and English);

   3. written pledge of the applicant to observe the laws and pertinent regulations of People’s Republic of China.

  Article 7 The foreign law firms that have obtained approval of the Ministry of Justice of the People’s Republic of China for the establishment of representative offices in China shall, within 30 days after the registration with the State Administration for Industry and Commerce, apply to the All-China Lawyers’ Association for the registration of resident lawyers, subject to submitting the following materials:

   1. certificate of approval for establishment of representative office (replica in duplicate);

   2. credential of representative;

   3. credentials made by a chief partner of the foreign law firms attesting the good qualities of the applicant (original in both Chinese and English);

  4. resume of the resident representative;

   5. written pledge of the resident representative to observe the laws and pertinent regulations of the People’s Republic of China (original in Chinese).

  Article 8 In case of any change or addition of resident representatives, the Chinese offices of the foreign law firms shall, within 30 days after obtaining the aforesaid approval and registration, apply to the All-China Lawyers Association for registration, subject to submitting the certificate of representative.

  Article 9 The resident lawyers of the Chinese offices of the foreign law firms shall, when apply to the All-China Lawyers’ Association for registration, pay a registration fee in accordance with the relevant provisions of China.

  Article 10 In case the resident lawyers violating Articles 4 and 9 of these measures, the All-China Lawyers’ Association shall apply to the Ministry of Justice for disqualification or punishment in accordance with the relevant provisions of the Regulations for the Administration of the Chinese Branches of Foreign Law Firms.

  Article 11 These measures shall enter into force as of December 1, 1999.

  Article 12 The right of interpretation of these measures shall remain with the Ministry of Justice of the People’s Republic of China

Foreign Investment favors Shanghai Industrial Real Estate

Thursday, December 6th, 2007

Contents Provided by SMERT

A study report of Shanghai Industrial Real Estate shows that foreign capital frequently increased investment in Shanghai industrial real estate under the background of a sharp rise of industrial land price and warehouse property rent. During June to Oct. this year, Shanghai Industrial Zone expanded new industrial facilities to 339,000㎡. Shanghai has planned to regard logistic industry as a priority for development in the further, thus a number of industrial real estate developers have increased input in logistic facility.

A Few Important Facts about China’s New Corporate Income Tax

Thursday, December 6th, 2007

By Vincent Cheung from www.pathtochina.com

1. The Tax Rate for both Chinese-owned and Foreign-owned companies are unified to 25%
2. Pudong and Five Special Economic Areas are entitled to five years’ transitional period, with the tax rate rising from 15% to 25% within 5 years( 18% 20% 22% 24% 25%).
3. The encouraged high-tech companies can enjoy a preferential 15% tax rate. For those new high-tech companies in special economic areas and Pudong, the “two exemption, three half” policy will be applied.
4. Small enterprises with thin profit can enjoy a preferential 20% tax rate.

Provided by www.pathtochina.com

“Path To China “ is an International Business Consulting Firm that provides foreign investors with business registration service in China. For business registration service , please contact Vincent by vincent@pathtochina.com

Shanghai:
Tel: (8621) 5102.5279
Email: sales@PathToChina.com
Suite 9B, 485 North HeNan Road (N.) Shanghai
200071 USA:
Tel: (303) 8006616
Email: sales@PathToChina.com
3801E, Florida Ave., Suite 412,
Denver, Co. 80210

[PTC_FAQ 7 ] What Documentation Involved When Applying For the Foreign Companies’ Adjustment of Registered Capital and Scope of Business in Shanghai

Thursday, November 29th, 2007

By Vincent Cheung from www.pathtochina.com

1.The application covering the amendment of relevant contracts and Articles of Association’s clauses regarding
the company’s increase/decrease of registered capital, or alteration of scope of business (Original)
2.The Board of Directors resolution to the increase/decrease of registered or alteration of scope of business,
amendments to relevant contracts and Articles of Association.( Original)
3. Amendments to Contracts and articles of association’s of the legal representatives. (Original)
4. Capital Verification Report regarding the injection of capital (Issued by CPA)
5. In case the application for the decrease of registered capital is approved by the licensing authority, a bulletin
regarding that should be posted on the major local newspaper for three times.
6. Certificate of Approval, Business License
7. Audit Report
8. Other necessary documents

Provided by www.pathtochina.com

“Path To China “ is an International Business Consulting Firm that provides foreign investors with business registration service in China. For business registration service , please contact Vincent by vincent@pathtochina.com.

Shanghai:
Tel: (8621) 5102.5279
Email: sales@PathToChina.com
Suite 9B, 485 North HeNan Road (N.) Shanghai
200071 USA:
Tel: (303) 8006616
Email: sales@PathToChina.com
3801E, Florida Ave., Suite 412,
Denver, Co. 80210