PathToChina.com

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:

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:

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:

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

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:

Children(less than 18 years old):

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.

The Law of the People’s Republic of China on Enterprise Income Tax

Order of the President [2007] No.63

16 March, 2007

(Adopted at the 5th Session of the 10th National People’s Congress on 16 March 2007,

promulgated by Order No. 63 of the President of the People’s Republic of China and effective as of 1 January 2008)　

Table of Content

Chapter One: General Provisions
Chapter Two: Taxable Income
Chapter Three: Payable Tax
Chapter Four: Preferential Tax Treatment
Chapter Five: Tax Withheld at Source
Chapter Six: Special Tax Payment Adjustment
Chapter Seven: Administration of Tax Levying and Collection
Chapter Eight: Supplementary Provisions

Chapter One: General Provisions

Article 1: Taxpayers of enterprise income tax shall be enterprises and other organizations that obtain income within the People’s Republic of China (hereinafter referred to as “Enterprises”) and shall pay enterprise income tax in accordance with the provisions of this Law.
This Law shall not apply to wholly individually-owned enterprises and partnership enterprises.

Article 2: Enterprises are divided into resident enterprises and non-resident enterprises.
For the purposes of this Law, the term “resident enterprises” shall refer to Enterprises that are set up in China in accordance with the law, or that are set up in accordance with the law of the foreign country (region) whose actual administration institution is in China. For the purposes of this Law, the term “non-resident enterprises” shall refer to Enterprises that are set up in accordance with the law of the foreign country (region) whose actual administration institution is outside China, but they have set up institutions or establishments in China or they have income originating from China without setting up institutions or establishments in China.

Article 3: Resident enterprises shall pay enterprise income tax originating both within and outside China. Non-resident enterprises that have set up institutions or premises in China shall pay enterprise income tax in relation to the income originating from China obtained by their institutions or establishments, and the income incurred outside China but there is an actual relationship with the institutions or establishments set up by such enterprises.

Where non-resident enterprises that have not set up institutions or establishments in China, or where institutions or establishments are set up but there is no actual relationship with the income obtained by the institutions or establishments set up by such enterprises, they shall pay enterprise income tax in relation to the income originating from China.

Article 4: The rate of enterprise income tax shall be 25%.
Non-resident enterprises that have obtained income in accordance with the provisions of Paragraph Three of Article 3 hereof, the applicable tax rate shall be 20%.

Chapter Two: Taxable Income

Article 5: The balance derived from the total income in each taxable year of Enterprises, after deduction of the non-taxable income, tax exempted income, other deductions and the making up of losses of previous years shall be the taxable income.

Article 6: Income obtained by Enterprises from various sources in monetary and non-monetary terms shall be the total income, including:
1.income from sale of goods;
2.income from provision of labour services;
3.income from transfer of property;
4.income from equity investment such as dividend and bonus;
5.interest income;
6.rental income;
7.income from royalties;
8.income from donations; and
9.other income.

Article 7: The following income from the total income shall not be taxable:
1.financial funding;
2.administrative fees and government funds obtained and included in financial management in accordance with the law; and
3.other non-taxable income prescribed by the State Council.

Article 8: Reasonable expenses that are relevant to the income actually incurred and obtained by Enterprises, including costs, fees, tax payments, losses and other fees may be deducted from the taxable income.

Article 9: In relation to the expenses from charitable donations incurred by Enterprises, the portion within 12% of the total annual profit may be deducted from the taxable income.

Article 10: The following expenses may not be deducted from the taxable income:
1.income from equity investment paid to investors such as dividend and bonus;
2.payment of enterprise income tax;
3.late payment fines;
4.penalties; fines and losses from confiscated property;
5.expenses from donations other than those prescribed in Article 9 hereof;
6.sponsorship fees;
7.expenses for non-verified provisions; and
8.other expenses irrelevant to the income obtained.

Article 11: Where Enterprises compute the taxable income, the depreciation of fixed assets calculated in accordance with provisions may be deducted.
No depreciation may be deducted for the following fixed assets:
1.fixed assets other than premises and buildings that have not yet been used;
2.fixed assets leased from other parties by means of business lease;
3.fixed assets leased to other parties by means of lease financing;
4.fixed assets that have been depreciated in full but are still in use;
5.fixed assets that are irrelevant to business activities;
6.land credited as fixed assets after independent price valuation;
7.other fixed assets whose depreciation may not be calculated.

Article 12: In Enterprises compute the taxable income, the amortization of intangible assets calculated in accordance with provisions may be deducted.
The amortization of the following intangible assets may not be deducted:
1.the fees for self development of intangible assets that have been deducted from the taxable income;
2.self-created goodwill;
3.intangible assets that are irrelevant to business activities; and
4.other intangible assets whose amortization fee may not be calculated.

Article 13: Where Enterprises calculate taxable income, the following expenses incurred by Enterprises as long-term fees to be amortized and that are amortized in accordance with provisions may be deducted:
1.reconstruction expenses for fixed assets that have been depreciated in full;
2.reconstruction expenses for fixed assets leased from other parties;
3.heavy repair expenses of fixed assets; and
4.other expenses that shall be treated as long-term amortization fees.

Article 14: During the period when Enterprises invest outside the territory, the cost of investment in assets may not be deducted from the taxable income.

Article 15: The inventory used or sold by Enterprises whose cost is calculated in accordance with provisions may be deducted from the taxable income.

Article 16: Where Enterprises transfer assets, the net value thereof may be deducted from the taxable income.

Article 17: Where Enterprises compute the consolidated enterprise income tax, the losses of business institutions outside the territory may not be offset by the profits of business institutions inside the territory.

Article 18: Where there is a loss in a taxable year of Enterprises, it may be brought forward to the succeeding years and made up by the income of succeeding years, but the limit of bringing forward may not exceed five years.

Article 19: Where non-resident enterprises obtain income provided in Paragraph Three of Article 3 hereof, the taxable income shall be calculated in accordance with the following methods:
1.income from equity investment such as dividend and bonus and interest income, rental income and royalties, the total income shall be the taxable income;
2.income from property transfer, the balance derived from the deduction of net asset value from the total income shall be the taxable income;
3.other income whose taxable income shall be calculated with reference to the previous two methods.

Article 20: The income, specific scope and standard of deduction and the specific method of taxation treatment of assets prescribed in this Chapter shall be provided by the departments in charge of finance and taxation under the State Council.

Article 21: In computing the taxable income, where financial and accounting treatment methods of Enterprises are inconsistent with tax laws and administrative regulations, such taxable income shall be computed in accordance with tax laws and administrative regulations.

Chapter Three: Payable Tax

Article 22: The taxable income of Enterprises shall be the balance derived from the taxable income of Enterprises multiplies the applicable rate and minus the tax amount of tax reduction and exemption pursuant to the preferential tax treatment hereof.

Article 23: The income tax that has been paid outside the territory for the following income obtained by Enterprises may be offset from the payable tax of the current period. The offset limit is the payable tax calculated in accordance with provisions hereof in respect of the income of such item, the portion in excess of the offset limit may be made up by the balance of the offset amount of the current year out of the annual offset limit within the next five years:
1.The taxable income originating outside China by resident enterprises;
2.The taxable income incurred outside China that is obtained by institutions or establishments of non-resident enterprises set up in China with an actual relationship with such institution or establishment.

Article 24: Where income from equity investment such as dividend and bonus originating outside the territory of China is shared by foreign enterprises directly or indirectly controlled by resident enterprises, the portion undertaken by foreign enterprises in the actual income tax actually paid outside the territory by foreign enterprises may be offset in the offset limit prescribed in Article 23 hereof as the income tax that may be offset outside the territory by such resident enterprises.

Chapter Four: Preferential Tax Treatment

Article 25: The industries and projects with key support and under encouraged development by the State may be given preferential enterprise income tax treatment.

Article 26: The following income of Enterprises shall be tax-exempted income:
1.income from interests on government bonds;
2.income from equity investment income such as dividend and bonus between qualified resident enterprises;
3.income from equity investment such as dividend and bonus obtained from resident enterprises by non-resident enterprises that have set up institutions or establishments in China with an actual relationship with such institutions or establishments;
4.income of qualified non-profit organizations.

Article 27: The following income may be subject to exempted or reduced enterprise income tax:
1.income from engaging in projects of agriculture, forestry, animal husbandry and fisheries by Enterprises;
2.income from investment and operation of infrastructure projects with key state support such as habour, pier, airport, railway, highway, electricity and hydroelectricity by Enterprises;
3.income from engaging in qualified projects of environmental protection and energy and water conservation;
4.income from qualified transfer of technology by Enterprises; and
5.income prescribed by Paragraph Three of Article 3 hereof.

Article 28: Small-scale Enterprises with minimal profits that are qualified are subject to the applicable enterprise income tax rate with a reduction of 20%.
High and new technology Enterprises that require key state support are subject to the applicable enterprise income tax rate with a reduction of 15%.

Article 29: The autonomous authority of ethnic autonomous locality may decide on the reduction or exemption of the portion of enterprise income tax shared by the locality that shall be paid by Enterprises of the ethnic autonomous locality. Where an autonomous prefecture or autonomous county decides on the reduction or exemption, they must report to the people’s government of province, autonomous region or municipality directly under the central government for approval.

Article 30: Weighted deduction may be computed in taxable income for the following expenses of Enterprises:
1.research and development fees incurred by Enterprises in the development of new technology, new products and new skills; and
2.the wages paid by Enterprises for job placement of the disabled and of other personnel encouraged by the State.

Article 31: Venture investment enterprises that engage in venture investment requiring key state support and encouragement may offset the taxable income at a certain ratio of the investment amount.

Article 32: Where the fixed assets of Enterprises actually require accelerated depreciation due to technology advancement, the years of depreciation may be shortened or the accelerated depreciation method may be adopted.

Article 33: The income obtained by Enterprises from the production of products in line with state industrial policies through comprehensive use of resources may be deducted from the taxable income.

Article 34: The investment by Enterprises on procurement of special facilities for environmental protection, energy and water conservation and safe production may be subject to an offset tax amount at a certain ratio.

Article 35: The specific measures of preferential tax treatment prescribed by this Law shall be formulated by the State Council.

Article 36: Where there is a significant impact on the business activities of Enterprises pursuant to the needs of national economy and social development, or due to unexpected public incidents, the State Council may formulate the special preferential policy of enterprise income tax and report to the Standing Committee of the National People’s Congress for the record.

Chapter Five: Tax Withheld at Source

Article 37: The payable income tax from income obtained by non-resident enterprises in accordance with Paragraph Three of Article 3 hereof shall be subject to tax withheld at source, with the payer as the withholding agent. The tax payment shall be withheld from the amount paid or the payable amount due from each tax payment and payable amount of the withholding agent.

Article 38: In respect of the payable income tax from income obtained by non-resident enterprises from project works and labour services in China, the tax authority may designate the payer of project price or labour fee as withholding agent.

Article 39: In respect of the income tax that shall be withheld in accordance with Articles 37 and 38 hereof, where the withholding agent has not withheld or fails to perform the withholding obligation in accordance with the law, the taxpayer shall pay in the place where the tax is incurred. Where the taxpayer does not pay in accordance with the law, the tax authority may pursue the payable tax amount of such taxpayer from the amount payable by the payer of other income projects in China of such taxpayer.

Article 40: The withholding agent shall turn the tax payment withheld to the treasury within 7 days from the day of withholding, and submit a statement of withholding enterprise income tax to the tax authority of the place where it is located.

Chapter Six: Special Tax Payment Adjustment

Article 41: The business transactions between Enterprises and their affiliates that reduce the taxable income or income of such Enterprises and their affiliates not in compliance with independent transaction principle, the taxation authority has the right to make an adjustment in accordance with reasonable methods.
The cost incurred in joint development and transfer of intangible assets, or joint provision and acceptance of labour services by Enterprises and their affiliates shall be shared under the independent transaction principle in computing the taxable income.

Article 42: Enterprises may report to the tax authority the pricing principle and calculation method of the transactions between their affiliates. Upon negotiation and confirmation with the Enterprises, the tax authority may reach the advance pricing arrangement.

Article 43: Where Enterprises submit to the tax authority the annual enterprise income tax return, they shall enclose a statement of the annual business transactions between affiliates in respect of the business transactions of the Enterprises and their affiliates.
Where the tax authority conducts affiliated business investigation, Enterprises and their affiliates, and other enterprises relevant to the affiliated business investigation shall provide the relevant information in accordance with provisions.

Article 44: Where Enterprises fail to provide the information of business transactions of affiliates, or provide false and incomplete information that cannot faithfully reflect the actual affiliated business transaction, the tax authority has the right to verify its taxable income.

Article 45: Where Enterprises controlled by resident enterprises or resident enterprises and Chinese residents in the country (region) where the actual tax burden is obviously lower than the tax rate prescribed by Paragraph One of Article 4 hereof, and profits are not distributed or distributed at a reduced rate due to reasons other than reasonable business needs, the portion of the above profits belonged to such resident enterprises shall be included in the income of such resident enterprises of the current period.

Article 46: The interest fee incurred in excess of the prescribed standard obtained by Enterprises from the loan investment and equity investment of their affiliates may not be deducted from the taxable income.

Article 47: Where Enterprises implement other arrangement without reasonable business objectives to reduce the payable income or income, the tax authority has the right to adjust in accordance with reasonable methods.

Article 48: Where tax payment requires to be levied additionally by tax authority in respect of the tax payment adjustment made in accordance with the provisions of this Chapter, such tax payment shall be levied additionally and interest shall be levied in accordance with the provisions of the State Council.

Chapter Seven: Administration of Tax Levying and Collection

Article 49: The administration of levy and collection of enterprise income tax shall follow the provisions hereof in addition to the Law of the People’s Republic of China on the Administration of Levying and Collection of Tax.

Article 50: Unless otherwise specified by tax laws and administrative regulations, resident enterprises whose place of tax payment is the place of registration of the Enterprise but the place of registration is outside the territory, the place of tax payment shall be the place where the actual administration institution is located.
Where resident enterprises establish business institutions in China without legal person qualification, it shall consolidate the calculation and payment of enterprise income tax.

Article 51: In respect of non-resident enterprises that obtain the income prescribed in Paragraph Two of Article 3 hereof, the place of tax payment shall be the place where the institution or the establishment is located. Non-resident enterprises that set up two or more institutions or establishments in China may, upon the examination and approval of the tax authority, select its main institution or establishment to pay the consolidated enterprise income tax.
Where non-resident enterprises obtain the income prescribed in Paragraph Three of Article 3 hereof, the place of tax payment shall be the place where the withholding agent is located.

Article 52: Enterprises may not pay consolidated enterprise income tax unless otherwise prescribed by the State Council.

Article 53: Enterprise income tax shall be calculated in accordance with the taxable year which starts from 1 January to 31 December of a calendar year.
If an Enterprise commences business or terminates its business activities during the taxable year and the actual business period of such taxable year is less than 12 months, the actual business period shall be treated as a taxable year.
Where the Enterprise is liquidated in accordance with the law, the liquidation period shall be a taxable year.

Article 54: Enterprise income tax shall be prepaid on a monthly or quarterly basis.
Enterprises shall submit a prepaid enterprise income tax return to the tax authority within 15 days of the completion of the month or the quarter to make tax prepayment.
Enterprises shall submit an annual enterprise income tax return to the tax authority within five months of the completion of the year and make the settlement of the payable and refundable tax payment.
Enterprises that submit the enterprise income tax return shall enclose a financial report and other relevant information in accordance with provisions.

Article 55: Where Enterprises terminate business activities in the interim of the year, they shall handle with the tax authority the settlement and payment of enterprise income tax of the current period within 60 days from the actual termination of business.
Enterprises shall, prior to handling registration cancellation, file a return of the income settled and pay enterprise income tax in accordance with the law.

Article 56: Enterprise income tax paid in accordance with this Law shall be calculated in Renminbi. Where the income is calculated in a currency other than Renminbi, it shall be converted into Renminbi for tax payment.

Chapter Eight: Supplementary Provisions

Article 57: Enterprises set up with approval prior to the promulgation of this Law that enjoy low preferential tax rate in accordance with the tax laws and administrative regulations at the current period may, pursuant to the provisions of the State Council, gradually transit to the tax rate provided herein within five years of the implementation of this Law. Where such enterprises enjoy regular tax exemption and reduction, the treatment continues to apply until expiry after the implementation of this Law. However, those that fail to be entitled to this treatment by reason of not making any profits, the preferential period shall be calculated from the year this Law is implemented. High and new technology enterprises that are set up in a specific zone in accordance with the law for the purpose of external economic cooperation and technology exchange and that are newly set up and require key state support in the region of special policy of such region specified by the State Council may eligible for transitional treatment and the specific measures shall be provided by the State Council. Other enterprises under the encouraged category confirmed by the state may eligible for tax exemption and reduction in accordance with the provisions of the State Council.

Article 58: Where agreements on taxation concluded by the People’s Republic of China and foreign governments contain different provisions, such agreements shall prevail.

Article 59: The implementing regulations shall be formulated by the State Council on the basis of this Law.

Article 60: This Law shall come into effect as of 1 January 2008. The Law of the People’s Republic of China on the Enterprise Income Tax of Foreign-invested Enterprises and Foreign Enterprises adopted at the 4th session of the 7th National People’s Congress on 9 April 1991 and the Tentative Regulations of the People’s Republic of China on Enterprise Income Tax promulgated by the State Council on 13 December 1993 shall be repealed simultaneously.

Brought you by http://www.pathtochina.com/

— 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.

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

　　(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

　　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

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.

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

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