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Shenzhen WFOE Company Setup

Update Date:2020-5-21 11:07:20     Views:37

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Shenzhen  WFOE Company Setup –The Concept of WFOE
WFOE stands for wholly foreign owned enterprise, which is a limited liability company wholly owned by either a foreign legal entity or a foreign natural person. The foreign investors may be foreign enterprises or individuals from Hong Kong, Macau, Taiwan or overseas.


Shenzhen WFOE Company Setup –Company Name of Shenyang Company Setup
In Shenzhen China, only Chinese company names are officially used, while English company names are for reference only. Not every name will be accepted by the ICAB (Company Registry). For some sectors such as education, logistics, medicine and food industries, a special pre-approved license is needed. It is important that you know the wording of a company name should conform to the registered capital and business activities. Your company name must be distinguished from the other registered names. If the word “China” is within the company name, it is required to be pre-approved by ICAB at national level in Beijing.

Shenzhen WFOE Company Setup –Shareholder, Director, Monitor & Legal Representative
Shareholders, directors, monitor and legal representative should be considered and arranged before the business setup.
1. A shareholder could be a legal person (foreign company) or a natural person (individual).
2. A director could be acted by a foreign person or a Chinese person.
3. A monitor should be appointed to supervise the company’s operation and management. A monitor could be acted by a foreign person or a Chinese person.
4. A legal representative is a person in charge of corporate operation, management and development, responsible for all the legal affairs arising from the running of the business. The position could also be held by non-shareholder or non-director.

Shenzhen WFOE Company Setup –Business Scope of Shenzhen Company Setup
The WFOE can conduct business within its approved business activities described on the business license. ATAHK will help you for more business activities during the application. Amending the business scope requires further application and approval. Generally speaking, different business activities are confined according to different business sectors.

Shenzhen WFOE Company Setup –Registered and Paid-up Capitals
In Shenzhen China, the registered capital could be as low as RMB 30,000 yuan. Different business sectors are subject to different requirements. In Shenzhen, the registered capital is equal to the paid-up capital.For the trading enterprise, the registered capital is usually required RMB 500,000 or above. For the manufacturing enterprise, the registered capital is usually required RMB 1 million or above. For the service sector, such as consultancy, technology, market research and development, the registered capital is usually required RMB100, 000 or above.

All of the registered capital can be paid in one time (within 6 months after the date of the issuance of the Company's business license) or be paid for many times within two years (In the first 3 months, 20% of the registered capital is mandatory). The terms of payment is determined by the volume of registered capital. If the registered capital is paid in one time, the fee of paid-up capital verification can be reduced.

Shenzhen WFOE Company Setup – Working Procedure of Shenzhen Company Setup
Step 1: Fill out the application form (sign the agreement);
Step 2: Company name search & confirmation;
Step 3: Pay for the services;
Step 4: Submit the needed documents;
Step 5: Check the documents;
Step 6: Prepare for the statutory documents; Let the investors sign the documents personally, and then submit all the documents to the government
Step 7: Keep clients informed of the processing.
Step 8: Finish processing in 30-50 working days; (it depends on the registered address and business scope)
Step 9: Hand over all the company kit to clients;
Step 10: Sign the receipt.

Shenzhen WFOE Company Setup –Government Processing of Shenzhen Company Setup
Step 1: Check the company name with local ICAB
Step 2: Achieving an approval from the Fire and Environment Bureau for manufacturing sector
Step 3: Pre-approval for some special sectors
Step 4: Go to Bureau of Trade and Industry  for certificate of approval
Step 5: Apply for the business license from ICAB
Step 6: Apply for stamps from the Public Security Bureau
Step 7: Apply for the Organization Code License from Bureau of Quality and Technical Supervision(国家质检局);
Step 8: Apply for the registration licenses from National & Local Tax Bureau
Step 9: Apply for the Certificate of Statistics from State Statistical Bureau
Step 10: Apply for the permits for the bank account opening from bank authorities;
Step11: Apply for Foreign exchange IC card & registration license from National Administration of Foreign Exchange
Step12: Open the saving account with the bank (current account could be opened later);
Step13: Apply for the Import & Export registration license from local Customs (if needed);
Step14: Apply for Financial Registration for enterprises with Foreign Investment from Financial Department

Shenzhen WFOE Company Setup –Documents Required for the Trading Enterprises
1. Minutes or resolution from investors or board of directors
2. One proposed name (in Chinese), and provide two or more alternative names in case the first name is not available.
3. Detailed information about the business scope and intended registered capital;
4. Feasibility study report;
5. Four original articles of association signed by members of the Board and with company stamp;
6. Copy of the business license or certificate of incorporation of parent company;
7. The original and copy of identification documents (ID card, passport) of legal representative, and two color photos;
8. Two original bank reference letters (from investor's bank) indicating foreign investors' creditability, issued within 6 months in both English and Chinese version;
9. Lawyer's legalization or notarization which should be endorsed by local China Embassy or Consulate
10. The lease of commercial office between leaser and lessee needed to be endorsed by the Housing Management Authority. The lessee should be acted by shareholders, directors, legal representative, monitors or manager. The area is required no less than 30 m2 and for commercial use only with more than one year’s rent.

Shenzhen WFOE Company Setup –Documents Required for Manufacturing Enterprises
Step 1 - Step 9 the same as above
Step 10: Manufacturing address: house property certificate or the lease of industrial workshop (two original copies of lease with signature and endorsed by Housing Management Authority. The area is required no less than 200 m2 and for manufacturing use only with more than one year’s rent.)
Step 11: Project reports are necessary for the approval by the relevant government department, such as, business service, environmental and fire departments. The safety standard of manufacturing area should reach the required standard set out by the Fire Department and Environmental Protection Department.

Shenzhen WFOE Company Setup –Documents Required for Foreign Individual’s Investment
Step 1: Original document & copy of identification documents (ID card, passport) of Chinese company's legal representative, directors, monitors and managers.
Step 2: Local lawyer's legalization or notarization endorsed by the Chinese embassy or consulate in the investor’s country.
Step 3: Two color photos of the legal representative;
Step 4: Feasibility study report; (possible to seek to ATAHK’s assistance)
Step 5: Two original bank reference letters (from investor's bank) indicating foreign investors' creditability, issued within 6 months in both English and Chinese version.

Shenzhen WFOE Company Setup –ATAHK Service, Fee& Terms of Payment
1: ATAHK package services for WFOE setup include:
Seven copies of Approval document; 2 copies of original articles of association signed by members of the Board and with company chop; 2 copies of certificate of approval; Both original and duplicate copy of business license; 4 stamps for different use; Stamp carving registration card; Bank account documents; Both original and duplicate copy of Organization Code License & card; Registration license and form of National &Local Administration of Taxation; Foreign exchange registration license and approval certificate; Customs declaration registration certification; Financial Registration For Enterprises With Foreign Investment.
2: Service charge: RMB18,000. Including the government service charge, except for the registered capital duty.
3: Terms of Payment: The applicant can pay by cash, check or T/T to ATAHK’s bank account before the service begins.

Shenzhen WFOE Company Setup – Taxation on WFOE
1. Overview of Taxation in China
The Tax System in China has undergone tremendous changes in recent years. Currently, there are 24 different types of tax imposed on a wide range of incomes and transactions. Taxpayers can be individuals, entities or economic organizations. To fulfill its WTO commitments, the Chinese government is currently preparing for another round of tax reform, which is expected to take place in 2010. Keeping place with compliance obligations in such a rapidly changing regulatory environment can be a major challenge. You are advised to seek professional advice from ATAHK regarding your particular circumstances.

2.  Business and Taxation in China
Any investors, who want to succeed in their business-doing in China, are strongly advised to better understand tax departments, tax categories, tax rate and official invoices in China.
As far as China tax department is concerned, China has two functional tax departments: national tax department (NTD) and local tax department (LTD), the former is for national use while the later is for local use. In every city or town there are national and local departments. Any person can contact these departments for information. Taxpayer should know which tax department to go to and the tax rate before tax return, here are some guidelines for you:  Value Added Tax should be paid to NTD at rate of 0-17% monthly, Business Tax to LTD at rate of 3-20% monthly, Individual Income Tax to LTD at rate of 5-45% monthly, Enterprise Income Tax (EIT) is 25% to NTD at basis of quarterly return and annual renew.

3. China Tax Category and rate
The China tax could be classified as follows: Value Added Tax (VAT) at rate of 0-17%, Business Tax (BT) at rate of 3-20%, Enterprise Income Tax (EIT) at rate of 25%, Individual Income Tax (IIT) at rate of 5-45%, Consumption Tax by customs (CT) at rate of 3-5%, Resource Tax (RT), City Maintenance and Construction Tax (CMCT) at rate of 1%, House Property Tax (HPT), Stamp Duty (ST) at rate of 0.5-1%, Urban and Township Land Use Tax (UTLU)

4. Tax Return
Tax Return should be done monthly, quarterly and annually, Tax is collected on the basis of invoice volume, in China the invoices are granted from the NTD or LTD.

5. Tax Rebate
China government is stimulating its economy by encouraging export-orientated businesses; Any exporters can enjoy the export tax rebate as high as 17% according to their categories.

Shenzhen WFOE Company Setup –Business Follow-up of Shenzhen Company Registration
ATAHK can provide a series of business follow-up services such as monthly bookkeeping and tax return, annual return services, internal auditing, financial planning and tax layout, China policy & market study. Other services include domain name registration, webpage design, website promotion, China trademark registration, Work Permit, Residence Permit, etc. in order to pave a smoother and wider way for your China business success.

Shenzhen WFOE Company Setup –Processing Period for WFOE
For manufacturing enterprise: it takes 30-40 working days to finish the processing before we get the required documents ready, especially the approval papers from the fire & environmental protection bureaus.

For the trading and service enterprise: it takes 40-50 working days to finish the processing before we get required documents ready.

It takes longer time for the application of the import and export license or VAT qualification license.
Shenzhen WFOE Company Setup -Foreign Company’s Tax Declaration and Annual Audit Issues
In accordance with China fiscally regulations, the foreign company must make bookkeeping and tax declaration after tax registration certificate released. In China, whether foreign company or domestic local company, monthly bookkeeping and tax declaration must be handled in time.

Contact Us
If you have further enquire, please do not hesitate to contact ATAHK at anytime, anywhere by simply visiting ATAHK’s website: , or calling HK hotline at 852-2783 7818 or Shenzhen TEL:86-755 82143410.

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