FAQs of China Company Incorporation

Q：In what forms is a foreign investment enterprise incorporated?

A：A foreign investment enterprise can be incorporated in the form of wholly foreign-owned enterprise, sino-foreign equity joint venture, or sino-foreign co-operative joint venture.

Q：What are the requirements for the time limit of capital subscription of foreign investment enterprise?

A： According to the following two ways:

• • The capital to be subscribed in lump sum as contemplated in the articles of association shall be paid up within six months from the date of issue of business license; or
• • The capital to be subscribed by installment as contemplated in the articles of association shall be paid up within three months from the date of issue of business license, with the first installment not to be less than 20% of the amount of capital subscription.

Q： In what forms is a foreign investment enterprise subscribing capital?

A：The subscribing capital can be in the form of cash, or property, plant, machinery equipment or other materials, industrial property right, know-how, right to the use of a site and others.

Q：Does a foreign investment enterprise need a separate application for the import/export rights?

A：No, it needs only filing and registration with relevant authority before conducting import/export business.

Q：Can a newly incorporated foreign investment enterprise whose scope of business includes both production and trade, be entitled to tax incentive?

A： If its productive operating income exceeds 50% of total business income, the enterprise can file an application, after examination and approval by competent tax authority, to be entitled to treatment of exemption and abatement of taxes of this year.

Q： Can foreign investment enterprises incorporated in bonded area apply for distributorship? Can it set up a branch beyond the said area?

A：Foreign investment enterprise incorporated in bonded area can apply for distributorship, and after obtaining approval, the enterprise can process customs formalities and foreign exchange verification and writing-off and other formalities, and can also sell the goods inside or outside the said area. After obtaining approval of competent department, it can also set up an operative branches outside the said area.

Q： Can foreign investment enterprise incorporated inside bonded area alter its registered address to operate outside the said area?

A：Foreign investment enterprise incorporated in bonded area shall adjust the original scope of business accordingly in order to apply for change of registered address to the original organ for approval. After the original organ for approval, asks for opinions and obtains consent of the chief of commercial department outside the said area, which intends to alter registered address, the enterprise can move out of the said area.

Q：What is the minimum amount of registered capital for foreign investment enterprise incorporation?

A：The minimum amount of registered capital for wholesaling and retailing is RMB500,000; and just for retailing is RMB300,000.

Q： What does the Joint Annual License Renewal of Foreign Investment Enterprise refer to?

A：Annual License Renewal refers to legal inspection carried out lawfully by governmental department to all foreign investment enterprises, where foreign investment enterprise should complete the report on Joint Annual License Renewal, balance sheet, profit and loss statement, and other related information.

Q： What departments are involved in the Joint Annual License Renewal of Foreign Investment Enterprise?

A： Annual License Renewal involves Administration for Industry and Commerce, National Tax Bureau, Local Tax Bureau, Customs, Administration of Foreign Exchange, Financial Bureau and Bureau of Foreign Trade & Economic Cooperation and etc.

Q：When will the Joint Annual License Renewal of Foreign Investment Enterprise take place?

A：It take place from 1 Mar to 30 June every year.

Q：What is the requirement for office premises of foreign representative office?

A：The office of foreign representative office is generally located in office buildings, residential and commercial buildings, business centers and etc. It is not required to rent space in foreign office building designated by the Public Security Bureau.

Q：What information shall be submitted for setting up foreign representative office?

A： The following information shall be submitted:

• • Application Form for the Establishment of Resident Representative Office of Foreign Investment Enterprises executed by the corporate representative of parent company
• • Registration certificate of Foreign Enterprise
• • Credit certificate issued by bank
• • Copy of ID card of the chief representative/resident representative
• • Lease agreement or certificate of title to house property
• • Documents certified by local Chinese consulate or embassy

Q： Can foreign employees with foreign investment enterprise process multiple entry-exit visa?

A： Yes. Foreign employees can process employment permit with labor bureau first and apply for conduct to entry and exit administration under public security bureau.

Q：What insurance should enterprise purchase for its employees?

A：Enterprise should purchase for its employees with a total of five kinds of insurances, including: Endowment Insurance, Medical Insurance, Unemployment Insurance, Industrial Injury Insurance, and Maternity Insurance. Foreign and Hong Kong or Macau employees need not be insured for that.