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China Trading Company Registration

How to expand your business to China by setting up China Trading Company.

No Real Office Needed

No Registered Capital Required

Set-up in 30 working days

EXCLUSIVE TO CORPORATION CHINA

China Trading Company Registration

Over the past few decades, China has seen a robust growth in its economy, with steady growth on a yearly basis. Helping to fuel this massive economic success is China’s role as the world’s largest exporter of manufactured goods, creating new opportunities for import-export companies to prosper as well. If registering a Chinese trading company is the next step for your company, contact Corporation China today to see if this move is right for your business.

A China Trading Import – Export Company, abbreviated Trading WFOE, is a commonly used investment vehicle for mainland China-based businesses. A Limited-Liability type company is also called Wholly Foreign Owned Enterprise. It is a great option for businesses dealing with wholesale and retail. You have to obtain Import-Export License, which is necessary to establish a Trading WFOE. The registration of a China Company takes about 30 working days to be done.

The unique feature of a WFOE is that the entity is 100% owned, capitalized, and operated by foreign investors without the help of a local partner. A WFOE allows you to maintain greater control over your business operations, and revenue targets. In addition, it allows you to conduct business in China on your own without the need of a local partner. A WFOE is a favorable choice for an overseas company that wants to permanently incorporate into mainland China.

A Trading WOFE is 100% owned and capitalized by foreign investors and is operated without a local partner.This allows for greater control over your businesses operations, and revenue targets.

The Chinese market is vast, expanding but also relatively complicated for newcomers. Consequently, many companies rely on consulting firms to help them efficiently operate in the Chinese market. The vast majority of Consulting companies entering China focus on overseas property, education consulting, brand consulting, technical services and HR to mention just a few. They are highly regarded and often extremely successful in China.

The cost of establishing a Trading company in China typically varies depending on any additional requirements the types of business activity may require, such as extra licenses, permits. There are two basic costs involved in setting up are:

  1. Setup costs – which differ only in setup location and not according to the size or scope, and China Free Trade zones are recommended.
  2. Registered capital – Money that needs to be injected into the Chinese trading company WFOE’s is not required.

What can China Trading Company be used for?

A Trading Company designed for Expanding your sourcing platform, direct control of logistics and quality control, and, finally yet importantly, purchase for reselling products overseas. Import of goods to sell directly, either in wholesale or retail in China. Bringing your Brand to China and establishing Chinese Online and offline shops.

Bring your Brand to China

The Chinese market is vast and is still in expansion. For that reason, many companies rely on IT consulting firms to help them operate efficiently in the Chinese market.

Open a Shop

Our team has helped to develop strategies for entrepreneurs, regional managers, and large multinational corporations. So our studies are aimed at empowering our clients to run a robust business plan in China.

Import & Export

Free-trade Zones are perfect for Trading Companies. It’s one of the best zones in China for Export and Import. The biggest feature of Free Trade Zones is the special custom supervision system, meaning your goods can stay in the zone and only pay tax when entering in China..

eCommerce Online Store

A Trading company is a perfect quick start for everything you need to conduct your business in China. From incorporating your company, registering your trademarks to setting up a virtual office.

Let’s get started!

Focus on growing your business while we handle everything else.
Corporation China is the partner you need!

China Trading Company Registration

Tax Invoice

Chinese companies put a lot of trust in the government and the Chinese legal system. Hence, they are very likely to inquire whether your company is registered in China. This is a way for them to establish the legitimacy of your business and to ensure that you can provide them with a tax invoice locally referred to as a Fapiao.

China Trademark

The Chinese trademark registration system is based on a “first come first serve basis”. Hence, it is important to register your brand’s trademark and logo in China as early as possible. Having an international trademark is not helpful as foreign trademark is not enforced in China.

Marketing

You should also consider localizing your marketing by using colors and slogans that appeal to Chinese consumers. Having a slogan in Chinese will also help Chinese customers get a better understanding of the strength and appeal of your brand. Above all, Corporation China is in partnership with Brand Asia, offering proven solutions to help you tailor your marketing plan to the Chinese market.

Setting up a China Trading Company

When setting up a trading company in China, there are numerous things to consider and hence it is important to seek appropriate legal help. Corporation China has developed unparalleled expertise in this area and can provide you with everything necessary to set up your Trading company.  Corporation China offers first-class solutions to all of the following requirements.

Corporation China is the Largest Foreign Direct investment firm in Asia Pacific.  [wikipedia]

Location

In China, prospective clients and business partners will often ask you where is your company located in China. Hence, a good location is an asset. At Corporation China, we offer excellent solutions for this through our Virtual Office System China Presence™ or our China Virtual Entity™ system.

With offices in 70 locations across China, our closest office is never far away.

Remote Bank Account

Corporation China can Guarantee a remote Bank Account for all our clients without coming to China.

Setting up a China Trading Company

How to register a trading company in China in 30 Working Days

Company name Registration

5 Working Days

The company name pre-approval application form requires five Chinese company name options. At the same time, the Passport /Business Certificate’s photocopies of the Legal representative and the shareholders are required, which must be notarized by the lawyer then attested by the Chinese Embassy.

Application for Business License 3 in 1

10 Working Days

After obtaining the name approval, we draft an article of association for your company. We need an Incorporation application report, Certificate of incorporation of overseas investors certified by the Chinese Embassy, Standards forms, etc.

Company Stamps

3 Working Days

After filing by the Public Security Bureau, we proceed to prepare the company’s stamps, including the Company stamp, the Financial stamp, the Fapiao stamp, and the Legal representative’s stamp.

Basic RMB Bank account opening

5-20 Working Days

Enterprises with foreign capital shall open an account with the Bank of China. We need to arrange a appointment with the local Bank.

Tax account verification

3 Working Days

The enterprise needs let its accountant visit the local tax bureau to verify the taxation account and declare the VAT tax type ; Blank or electronic fapiao voucher will be purchased in the taxation system.

How to start a trading company in cChina

WHAT DO YOU GET AFTER COMPANY REGISTRATION

Stamps

Company stamp, Financial stamp, Invoice (Fapiao) seal and Legal Representative stamp

Articles of association

Company’s articles of association (Basic Version in Chinese)

Business License

Obtaining a Business License from Government

Business Scope

Draft the approved business activity in the Business License

ADDITIONAL  SERVICES PACKAGE AFTER COMPANY REGISTRATION

Social Security Account

Pension, Medical Insurance, Unemployment Insurance, Maternity Insurance, Work Injury Insurance and Housing Provident Fund for Chinese employees.

TAX Bureau Disk

Golden Tax Bureau Disk (OfficialTax USB disk to issue invoices and the tax)/ Fapiao printing machine / Blank fapiao notes

Visa & Working Permit

A working visa is required for entrepreneurs who set up a company in China. After obtaining a work permit and residence permit, a work visa will express to you.

Bank Account

RMB Company Bank Account / Company Capital Account / Foreign Exchange Account

Basic documents required

DOCUMENTS REQUIRED TO SET UP A TRADING COMPANY IN CHINA

Passport

The legal representative, supervisor, and shareholders’ passport or identification certificate must be provided if they are foreign citizens. Furthermore, the Lawyer and Chinese Embassy should notarize and attest all passports and then authenticate the documents by the local, state, or national registration office.

Registration Proof

 The Certificate of Registration/Business Certificates for the company investor should be notarized by a local, state, or national registration office or authentication department, then authenticated and attested by the Lawyers and Chinese Embassy. Similarly, Hong Kong, Macau and Taiwan companies should be notarized by the local registration office or authentication department only.

Office Address

Normally, the Government requires office address lease agreements for one year as a requirement set out in Chinese Company Law. That means you need to provide the Office Lease Contract and the Property Certificate. We can certainly assist you in locating the company registration address in the Development Zone if you do not have a Chinese company office.

China trading company FAQ

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What is a Trading WFOE?

A WFOE is short for Wholly Foreign-Owned Enterprise. A WFOE is a 100% foreign-owned (individual or corporate) limited liability company able to generate profit, invoice clients, and hire local/foreign employees in China.

Can a WFOE in China send funds overseas?

Any operating profit made in China can be converted to foreign currency for transfer to an overseas parent company.

Is there a minimum registered capital required to set up a WFOE in China?

Although there is now (since changes in 2016) no fixed minimum requirement, in practice most WFOEs will still require capital injection. The planned amount is reviewed by local authorities during application and it makes business/tax sense to get the level right from the start.

The amount will vary greatly for different types of business – naturally, a small consulting company requires much less than a complex manufacturer. As a guide, sufficient funding is needed to cover the WFOE’s financial obligations before the company is self-supporting (often set as 1 year). Note that there is now much more flexibility than in the past regarding the time period over which capital should be injected.

It is important to set the capital level appropriately during formation. If it is set too low, any additional funding must be taxed as income (further capital injection is possible but there is a very time-consuming approval process). Set it too high, and of course, funds may be tied up that could be used elsewhere (and these will be hard to release).

What are the advantages of registering a WFOE in China?

A WFOE registration is the most complete and flexible option for opening a company in China. It has many advantages over a Representative Office or a Joint Venture operation. Here are some of the key advantages we see in WFOE formation.

Can be formed without a Chinese partner

A WFOE is independent, able to manage its own operations, funding, and business development. Without a parent, it does not need to share profits, strategies, or Intellectual Property.

Can make profits in China

A WFOE can fully carry out business in China, in line with its agreed business scope. It can issue local currency invoices to domestic customers and make profits from its activities.

Able to send funds overseas

Any operating profit made in China can be converted to foreign currency for transfer to an overseas parent company.

Able to hire staff directly

A WFOE can manage its own human resources (without using an agency), and hire staff both locally and from overseas.

The best option to protect IPR in China

The WFOE structure provides some level of protection under Chinese law.

Do I need to do tax and accounting if I register a representative office in China?

Yes, even though representative offices are not permitted to generate profit, they are required to submit monthly tax and accounting reports with salaries and expenses.

What is the procedure of setting up a WFOE in China?
  1. Apply for name approval and registration

The first step in registering a WFOE in China is to choose a company name and get it approved.

The name choice must follow rules set up in Chinese company registration laws. The company name must include the company industry or brand, operating region of the business, and a suffix of “Company Limited.”

The following will be checked during name approval:

  • Availability of the requested name. Corporation China has the ability to check out for you.
  • Inclusion of restricted words, such as “China”, “State” or “National”
  • Inclusion of foreign characters or symbols
  • Whether the name is confusing or misleading

Don’t forget the importance of naming strategy and branding. Just as overseas, your company’s name is the first impression of your company. It should clearly reflect the company’s role and image. Consideration should also be made of the characteristics of the Chinese characters. Many words or characters have similar meanings or sounds which can strongly influence the impact of the chosen name (both positively and negatively!)

Note that the name registration can be done early whilst you prepare further, and to aid trademark registration. It is not necessary to immediately submit company filing to MOFCOM after the name is approved. Note also that it is common to submit more than one name for consideration.

  1. Registered Address as necessary

Before submission for WFOE incorporation, it is necessary to have a lease for company space in the city of registration. The contract for this needs to be valid for a year from the registration date. It is advisable to include a condition in the leasing contract to cancel the lease in case of registration refusal or difficulties. As with any contract in China, steps should be taken to minimize future problems – such as checking the owner’s details and land rights certificate for the property being leased. Corporation China offers Virtual Addresses that could be used for Company Registration in China.

  1. Carry out environmental impact assessment – Only for a manufacturing WFOE

If registering a manufacturing WFOE, an environmental impact assessment will need to be carried out by a registered agency. This is done in order to obtain an approval certificate from the local environmental protection authority.

The procedure and required approval varies with the scale of the manufacturing operation and its potential impact and will include consideration of material used, produced, and disposed of, machinery to be used, as well as any existing plans for environmental protection.

  1. Online registration via MOFCOM

The registration process has been significantly simplified in recent years, and now makes use of an online filing submission. This is much faster than the previous methods, but still requires a lot of documentation! It should be noted that there is a somewhat greater burden with online submissions to have all details correct and finalized. The process of “blind submission” does not allow for discussion with authorities during submission.  If rejected, the application will need to be revised and resubmitted.

  1. Apply for a “5 in 1” business license from local AIC

Following approval from MOFCOM, the application for a business license with the local Administration of Industry and Commerce (AIC) needs to be made. This is another process that has been greatly simplified and quickened in the past couple of years. An application is now made for a so-called “5 in 1” business license, which covers all the major licenses required for a new company. Previously each of these required separate applications and naturally, this was much more time-consuming.

Again, this is now an electronic submission, accompanied by significant documentation (see the section on documents required). Once submitted the AIC will share documentation with other relevant authorities to issue licenses – a major time improvement!

The 5 licenses issued by the AIC are:

  • The business license
  • Tax registration certificate
  • Organization code certificate
  • Social security registration certificate
  • Statistical registration certificate

The company now exists and is licensed to do business in China, and the remaining set-up steps can be considered “post-licensing” tasks. We would expect to reach this point in 2-3 months.

  1. Carving chops for the new company

To Chinese business newcomers, the importance of chops is often a surprise! Every company requires a set of chops, or seals, to be used as a representation for signing official documents.  These hold the final say, above individual signatures.

Chops can be applied for through the Public Security Bureau (PSB) following company set up. Several additional chops are needed for different business areas (e.g. financial, invoice sealing, and customs if appropriate). Each will have the company name in Chinese and English if required.

  1. Opening bank accounts

Once chops are obtained, they can be used to open the WFOE’s Chinese bank accounts. A WFOE should have at least two accounts, preferably with the same institution (Chinese or foreign banking institutions are equally acceptable depending on company preference).

  • A local currency RMB standard company account. This can be used for payments and receipts in RMB, as well as for company tax payments and day-to-day operating costs.
  • A separate capital contribution account, designated in foreign currency. This is the official account through which capital can be injected from overseas.
  1. VAT registration

WFOEs must be registered for VAT payments with the local tax bureau. There are two different categories for VAT registration for all companies – “general” and “small scale” (with low sales volume).  A new WFOE which qualifies for small scale may choose to register under either category.

In general, a lower VAT rate is paid for companies that qualify as small scale, but there are some potential advantages in registration for general status (such as the ability to deduct input VAT). Discussion of the individual situations with a tax expert is advisable here.

  1. Customs and import-exit registration – for trading WFOEs only

For trading WFOEs involved in import-export, there are several additional registrations required, which are not automatic under the AIC business license application. These must be made separately following company incorporation and the exact requirements depend on the company operation area, but will likely include the following:

  • Import-export license
  • Customs registration certificate
  • Registration with Entry-Exit Inspection and Quarantine Bureau (for quality inspection)
  1. Issue contracts and complete necessary registration for employees

Whilst this is not formally necessary before the company starts trading, it is best at this stage to ensure everything is set up correctly. Formal contracts need to be issued from the new WFOE for all local employees. Also, registration will need to be made for employee tax and social benefits accounts.

Companies may well already have local employees working for them, often through a previous representative office structure or employed on their behalf by a Chinese agency. The new WFOE can now employ them directly.

Can a WFOE hire staff directly in China?

A WFOE can manage its own human resources (without using an agency), and hire staff both locally and from overseas.

Which party is legally responsible for employees when using payroll services?

Corporation China can either administer the payroll and taxes on behalf of a Chinese registered company (but the company remains the employer and is legally responsible for employees) or we can combine with our employer of record services and fully manage the recruitment and employment of staff as well as their payroll and tax.

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Can a WFOE generate profit in China?

Yes, a WFOE can fully carry out business in China in line with its agreed business scope. It can issue local currency invoices to domestic customers and make profits from its activities.

How many work visas can a WFOE issue?

The government will take into account a few factors for work visa issuance such as: how long has the company been registered, how much tax history does the company have and how many local employees does the company have. This does not apply to shareholders of a new company, as these individuals (local or foreign) will always receive a work visa. 

How much does it cost to set up a foreign-owned company in China?

The Company registration cost depends on the company type, the business scale, and the business industries. Therefore, if you want to set up a company in China, justcontact us directly. We’ll analyze your company situation and then provide the most cost-saving proposal.

Can I file corporate taxes in China by myself?

No! Only an accredited Chinese accountant is eligible to file corporate tax and accounting reports in China.

Do I need to do tax and accouuntinng if my company (WFOE) is not generating any profit?

Yes, even if the company is new and has no transactions, the tax and accounting report must be submitted to the government.

Is a WFOE protected against copyright infringement & IPR in China?

A WFOE is the best option to protect your IP rights in China. There is no need to share business information with a partner, and the WFOE structure provides some level of protection under Chinese law.

Can a WFOE be registered without a Chinese partner?

A WFOE is independent, able to manage its own operations, funding, and business development. Without a parent, it does not need to share profits, strategies, or Intellectual Property.

What the advantages of outsourcing payroll and tax?

There are many advantages to using Corporation China’s payroll and tax solutions:

  • We will manage all payroll and employee tax on your behalf, leaving you free to focus on other businesses.
  • Save yourself the cost and complexity of establishing an internal HR payroll team.
  • We are fully up to date with the latest laws and regulations. The fiscal and taxation environment in China changes often and it is vital to stay current.
  • Corporation China has strong relations with local tax authorities and can assist with inquiries where necessary.
  • Flexibility to tailor services to any size of business and payroll, and to include employer of record services.
  • We can help you plan and structure salary packages for both locals and overseas.
  • Corporation China has a mature system to proceed and protect your payroll data.

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Ava's expertise is in Brands entering China and strategy. She has a legal and Marketing background  

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