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WFOE Organization (Part II)
发起人:wangjinmeng  回复数:1  浏览数:8062  最后更新:2022/9/27 12:37:59 by nihaosb

发表新帖  帖子排序:
2019/3/26 17:33:29
wangjinmeng





角  色:管理员
发 帖 数:30
注册时间:2019/3/25
WFOE Organization (Part II)
5. Registered and Paid up Capital[size=13.6px]Registered Capital: USD$140,000 is a good idea for all kinds of WFOE, with USD$ 140,000 investment it's easy to get approved. Initial Paid-up would be 20% of the registered capital, the balance should be remitted within 2 years.

[size=13.6px]Registered capital is the amount that it's required to run the business until it can break even - the 'registered capital' is a guideline only. If you do looking for a minimum registered capital, for instance RMB 30,000 (which is impossible to establish a WFOE in China) this means you will run out of money pretty soon, which leads to increased costs in reapplying for permission to increase capital, additional licensing fees and renewals of business licenses and so on. The WFOE needs funding via it's registered capital until it's about to support itself from it's own cash flow.

[size=13.6px]However the amount of registered capital is dependent upon factors like Scope of Business and Location. In reality local authorities will review the feasibility study report (and check the lease contract) approve the investment on a case-by-case basis; reduced registered capital could be negotiated in some cases.

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6. Office address of WFOE [Very important][size=13.6px]Before submit the application forms of forming a WFOE in China, the foreign investor must rent a plant(manufacturing WFOE) or an office in advance(ridiculous? ), the office of WFOE can't be in a residence building nor residence and commerce (R&C) combined building. **Virtual address is not allowed to be registered a WFOE there although it's widely existing for local companies. Anyway, a normal office building in China will be OK for register a WFOE.

[size=9.52px]**Beijing will be special on this regulation, it's OK for investor to register a WFOE in R&C building if all landlords of this building agreed to allow the registration there and landlord committees register the building with local State Administration of Industrial and Commerce. Check with our Beijing Contacts on the right side before you doing so.

[size=13.6px]Make sure that investor put a note in the lease contract that the office will be OK for registere a WFOE and landlord should refund all deposit and rental in case it failed to register the WFOE which caused by documents of address.


[size=13.6px]In China, one office room could only register one business. An already taken office can't been registered again. There is no public resources to find out if an address been registered or not although local SAIC has the internal database to access it. How to solve it and reduce the risks? To have the landlord check with local SAIC and put terms in a lease contract.

[size=13.6px]Registered address and operation location can't be different, although it's widely existing in China that a company registered in one address operate in another.

[size=13.6px]Office relocation will bring lots headaches since all the licenses with business address on it should be updated to the new office address and Tax Clearance Declaration Report may be involved if the office relocate to another district.

[size=13.6px]For instance:

[size=13.6px]In Shanghai Municipality. Since most applications would be approved through District Government level, If you rent an office in Jing'an District of Shanghai and operate the business there, after 1 year you want to relocate the office to another office building of Jing'an District, you will apply for change all the licenses to another building of Jing'an.

[size=13.6px]If you rent an office in Jing'an District of Shanghai and operate the business there, after 1 year you want to relocate the office to Pudong district, the CPA firm should provide Tax Clearance Declaration Report, which is just as complicated as an audit report. You could then apply for change all the licenses to Pudong district.

7. Choosing WFOE Company Name[size=13.6px]Choosing the business name The official company name of a WFOE in China should be in Chinese. The Chinese name should be formatted as: first word -company name/product(For instance: MCK; second word: activity (For instance: business consulting); third word: location/name of city (For instance: Shanghai, Beijing); fourth word - company structure. (For instance: Co., Ltd.) With that a company called MCK register in Beijing engage Business Consulting Service LLC will be called: MCK business consulting (Beijing) Co., Ltd. The name then has to be registered with the local Administrative Bureau for Industry and Commerce (SAIC). The use of the word 'China' or 'International' in their Chinese name, have to have a minimum capital of US$10,000,000 instead of US$ 100,000. These words will have to be avoided therefore , although they are permitted in the non-Chinese name. Prior to any of the following applications, the investor(s) should reserve a name for its prospective WFOE with the local SAIC. This is called "Name Pre-registration" in China. SAIC requires that a proposed name and FIVE-EIGHT alternative names be provided. The State Administration of Industry and Commerce (SAIC) has the final say in whether a name is allowed or not.

8. Business License[size=13.6px]Business license is the key offical document of the WFOE (like Certificate of Incorporation in Other countries).

[size=13.6px]Once your business licence is approved by State State Administration of Industry and Commerce (SAIC) (SAIC). Having obtained certificate from the tax authority, you are now legally entitled to open foreign exchange and RMB accounts and can start to hire staff, sign contracts, apply for work permit and residence permit and the WFOE is now in business in China.

9. General Tax Information[size=13.6px]Since Jan. 1, 2008, China's new corporate income tax rates begins with 25% although some industries still enjoy a lower rate which is15%, the rate depends on the places where the company is registered and the industry that a company engaged. Please check the latest Corporate Income Tax Law of China above. All enterprises are required to report to the Tax Administration Department monthly, quarterly, annually.

10. Annual Audit Report[size=13.6px]Any limited companies in China should summit annual audit reports to the relevant authorities. The audit reports are including: balance sheets and income statements for their annual Chinese audit. The annual audit and licenses renewal cost is about RMB 6,000. Any company will be subject be to a fine if the Annual Audit Report is not submitted in a timely manner. (June 30th is the deadline of an annual audit report submission and licenses renewal in China)

11. Profit Repatriation[size=13.6px]China Government allows Foreign Invested Enterprises remit their profits out of the country and such remittances do not require the prior approval of the State Administration of Foreign Exchange (SAFE). Dividends cannot be distributed and repatriated to oversea if the losses of previous years have not been covered while dividends not distributed in previous years may be distributed together with those of the current year. Repatriating the Registered Capital to home countries is forbidden during the term of business operation.

12. Terms and Termination[size=13.6px]In China, terms of 15 to 30 years are typical for a manufacturing WFOE (although some may have a longer term). It is also possible to obtain extensions of the WFOE's duration. For projects in which the amount of investment is large, or the construction period is long and the return on investment low, projects producing sophisticated products using advanced or key technology provided by the foreign partner, or for projects producing internationally competitive products, the term of WFOE may be extended to 50 years. With special approval from the State Council, the term may be even longer than 50 years.

[size=13.6px]The WFOE may be terminated under certain conditions. For example, the inability of the WFOE to operate due to heavy losses, or in the occurrence of an event of force majeure, etc.


For more information, please feel free to contact us.

info@31012333.com

www.31012333.com

2022/9/27 12:38:01
nihaosb





角  色:普通会员
发 帖 数:474
注册时间:2020/11/22

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