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China has drafted executive regulations for a new corporate income tax law that will harmonize the domestic and foreign rates, and the final draft has been submitted to the State Council for approval, the China Securities Journal reported on Wednesday, citing an expert close to the issue.The income tax rate for foreign companies in special bonded zones, which previously enjoyed a preferential rate of 15 percent, will rise in stages to 18 percent, 20 percent, 22 percent, 24 percent and finally 25 percent, the same as domestic companies, over five years, according to the draft.The arrangement would apply to such bonded zones as Shenzhen Special Economic Zone, economic development zones set up in coastal cities like Hongqiao Economic and Technological Development Zone in Shanghai, and high- and new-tech development zones including Zhongguancun Science Park in

Beijing.

The unidentified expert also said the 24-percent rate for foreign companies established in coastal regionaldevelopment zones, such as the Yangtze River Delta and the Pearl River Delta, would rise directly to 25 percent in 2008.

However, foreign companies that have tax holidays, which provide for five tax-free years and another five years of up to 50 percent reduction, will retain those concessions for the full 10 years before facilitate new higher rates. 

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By Vincent Cheung from www.pathtochina.com  

It depends on the nature of your consultancy company. As a general rule, any companies or individuals from any countries and regions can set up consultancy companies in

China, however, according to the latest “Catalogue for the Guidance of Foreign Investment Industries”, there are still some prohibitions and restrictions on some types of consultancy company like education consultancy company, tour consultancy company, legal consultancy company, market research company(equity joint ventures or contractual joint ventures only).

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 “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.

By Vincent Cheung from www.pathtochina.com

According to the law on foreign invested enterprises’ corporate income tax, foreign investors  who increase the registered capital by directly investing their companies’ profits in their companies, or set up other foreign invested companies with the profits,  can apply to the tax bureau for tax refund of 40% of the part of corporate income tax they’ve paid equal to the reinvested capital. A total tax refund will be offered to those foreign investors which are reinvesting their profits in extending their goods export enterprises or high-tech enterprises. Starting from the re-injection of the registered capital, their companies should at least be on operation for more than 5 years, or the tax bureau will ask you to return all of the tax refund. If the profits reinvested have been repatriated out of china , deposited in foreign banks, or used as trading capital, this tax refund policy is not applicable.  

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 “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.

   

 Contents from  www.resourceinvestor.com 

By Ida Chen
12 Nov 2007 at 10:21 AM GMT-05:00

 SHANGHAI (Interfax-China) — The Chinese government is considering cancelling the current 5% value-added tax (VAT) export rebate and imposing a minimum 5% export tax on 0# refined zinc (>=99.995%) in January next year, in order to slow investment growth in zinc smelting projects and curb the country’s huge trade surplus, industry insiders told Interfax today. “The policy is still being discussed by relevant government departments and major smelters. However, as smelters, we hope the existing policy can be retained,” a senior official, surnamed Wang, from the trading department of Hunan Zhuzhou Smelter Group, China’s leading zinc smelter, said. 

Wang expressed concern that the policy may burden domestic zinc smelters with unprecedented difficulties. “The domestic zinc smelting sector will face the same problems as the lead smelting sector is currently facing,” he added.  The policy will result in a significant drop in China’s zinc exports and tight global supply, which will in turn dramatically increase both global zinc prices and zinc concentrate prices. Domestic zinc smelters will have no choice but to accept soaring imported concentrate prices, and will probably be forced to reduce production, Wang explained.   

Zhu Yiman, an analyst from Commodity Business Intelligence China, a Shanghai-based commodity market service provider told Interfax that “it is only a matter of time before the government cancels the VAT export rebate on 0# zinc, as other types of Read the rest of this entry »

By Vincent Cheung from www.pathtochina.com

For foreign companies and rep offices in Shanghai, there is one favorable policy on purchasing a car—they are entitled to getting free license plate. For example, a trading WFOE( Wholly Foreign Owned Enterprise) can get a free license plate as long as they’ve injected at least 140,000 registered capital. More free license plates will be offered as the registered capital goes higher. A representative office can get one after it’s officially established. Have any idea how much does a license plate cost in

Shanghai? It’s over 40,000 RMB! It means it’s even more expensive than the price of a small car like QQ.  

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 “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.

By Vincent Cheung from www.pathtochina.com

To open restaurants in Shanghai, y ou’ve got two options:

1. Establish a wholly foreign owned catering management company.

2. Simply open a restaurant   

If you want to franchise in Shanghai or intend to sell your restaurants in the future, option 1 would be fit for you, or you can simply open a restaurant.  You don’t have to rent a room in an office block to have the catering management company established. For setting up a catering management company, a suitable place for opening a restaurant is sufficient. As soon as it’s established, you can start to open restaurants, bars or coffee houses as its branch companies. Since the catering management company, which is licensed to engage in investment consultancy, business consultancy, corporate management consultantcy, catering ( food, dessert, beverage, alcohol)  already has most of the required licenses and permits for engaging in catering business, you don’t need to apply for them when you are opening branch companies.  

The most critical issue is the location of the restaurant. A few approvals and licenses are needed before you submit your application to SMERT (Shanghai Municipal Foreign Economic Relation & Trade Commission). Shanghai Environment Bureau imposes a demanding requirements for the restaurant. The discharge of smoke, sewage, solid waste, the possible influence on the neighboring residents, etc, are critical factors. Before you sign the lease agreement with the landlord, invite the officials

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 By Vincent Cheung from www.pathtochina.com

 The answer is negative.

Those expenses are not regarded as part of the registered capital, cause they are not withdrawn from 

your company’s RMB account. Say, your company’s registered capital would be 140,000 USD.  You might have spent 4,000 dollars on rental, office furniture, consulting services, HR companies, staff, and so on, but it doesn’t mean another injection of 100,000 USD . You are still required to inject 140,000. Those money spent can only be taken as expenses of you company, so you will be less taxed at the end of a financial year. Another method is to open a temporary RMB account, but it’s Read the rest of this entry »

 By Vincent Cheung from www.pathtochina.com

The government has restriction on the foreign investment in education industry, so, entities like wholly foreign owned early education center, language training school is not allowed to be established in China. You’ve got three options if you want to engage in those fields in China.   

Option 1: Start a Sino-foreign Cooperative Joint Venture with a Chinese Partner  

To engage in early education center or a language training school in China legally, you will have to set up a Sino-Foreign Cooperative Joint Venture.  Different authorities’ examinations and approvals might be involved according to different natures of the entities. Take the establishment of a early education center as an example,

Shanghai’s Education Evaluation Institute’s approval will be needed. They will arrange a meeting to examine and evaluate your feasibility study report, and reach a conclusion on the question whether you are qualified. Only after you get the approval from Shanghai Education Evaluation Institute, the SMERT ( Shanghai Foreign Municipal Economic Relation & Trade Commission) will accept your application. If you are about to start a English training school in

Shanghai, things are a bit different. Considering that language training is categorized into “Vocational Training”, Shanghai Labor & Social Security Bureau” will be responsible for the examination and approval. Note that, individuals are not allowed to engage in any kind of joint venture, which means you Chinese partner has to be a company or school in relevant field. Usually, it has to be licensed to offer Read the rest of this entry »

 By Vincent Cheung from www.pathtochina.com

That’s most common misunderstanding about the registered capital. It was originally in place to ensure FIEs (foreign-invested enterprises) indeed had enough capital to sustain a business. It’s not the capital taken by the government nor money you deposit in the bank, instead, it’s the money you can use for your company. It totally belongs to your Chinese company,. You can use it to make payment your suppliers. buy office rental, furniture, pay service fees, etc. Legally speaking, it’s against the law for you to withdraw the money for no good reasons. You see? Say, your registered capital is 140,000, then you withdraw the total amount of money all of a sudden, which equals to the fact that you haven’t really invested any capital. It’s just impossible.  

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 “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.

Article 1 In order to adapt to new situation upon

China’s accession to the WTO and further open tourism to the outside world and promote the development of travel agency industry, the Provision is formulated in accordance with the relevant laws and regulations ofChina on foreign-invested enterprises, the Regulation on Travel Agency Management and the relevant provisions.
Article 2 The Provision is applicable to the foreign holding and wholly foreign-owned travel agencies established in China during transition period prior to the scheduled term committed by

China upon its accession to the WTO.

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

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

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

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

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

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

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

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

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