[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”full_width_background” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_color=”#f7f5f3″ scene_position=”center” top_padding=”100″ constrain_group_1=”yes” bottom_padding=”100″ top_padding_tablet=”30″ constrain_group_3=”yes” bottom_padding_tablet=”30″ top_padding_phone=”30″ constrain_group_5=”yes” bottom_padding_phone=”30″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” advanced_gradient_angle=”0″ overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_row_inner column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” text_align=”left” row_position=”default” row_position_tablet=”inherit” row_position_phone=”inherit” overflow=”visible” pointer_events=”all”][vc_column_inner column_padding=”padding-8-percent” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” advanced_gradient_angle=”0″ gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/2″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid” gradient_type=”default”][split_line_heading animation_type=”line-reveal-by-space” font_style=”h3″ text_color=”#212d84″ line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Wholly Foreign-Owned Enterprise (WFOE)”][\/split_line_heading][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Definition”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]Limited liability company incorporated in China owned by foreign investor(s).[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Choice of Company Name”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]The incorporation procedures normally start with name pre-approval. The name must be in Chinese, and generally ends with \u201cLimited\u201d. Company name is usually comprised of \u201cadministrative area + company name + business nature + Limited\u201d. The company name generally is a combination of two or more Chinese characters, and the word \u201cChina\u201d cannot be used.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Registered Capital”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]The government laid specific requirement to register capital of a WFOE in accordance with the scope of business and place of incorporation:<\/p>\n
- \n
- Register capital of a WFOE requires actual payment.<\/li>\n
- Initial capital injection can be done within the valid period of WFOE which is generally 20 years.<\/li>\n
- After each injection, a capital verification report by a Certified Public Accountant in China shall be prepared.<\/li>\n<\/ul>\n[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Business Scope”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]WFOE must operate within its approved scope of business. The scope of business must be determined at time of incorporating the WFOE and approved by the relevant Industrial and Commercial Administration Bureau.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Registered Address”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]All WFOE in China must have a physical office. Note that only a portion of the commercial building are eligible to register a WFOE. A proper rental agreement, duly filed with the local Housing Administrative Bureau, is required.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Shareholder”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]Shareholder can be at least one foreign individual over 18 years old or a foreign Company. Shareholder is the legal owner of the WFOE. For choice of shareholder, generally we recommend using a corporation for the purpose of mitigating risk exposure of the beneficial owner. The choice of country for incorporating this holding company would generally be companies incorporating in countries that offer more efficient tax incentive, such as Hong Kong or Singapore whereas Double Tax Treaty with China exist.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Legal Representative”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]Legal representative can be an individual of any nationality who is over 18 years old. Legal representative can concurrently be the director. The chief representative is responsible to represent the WFOE in all legal aspects.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Supervisor”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]At least one supervisor is needed, and the supervisor can be individual of any nationality over 18 years old. A WFOE should set up a board of supervisors including at least three individuals. Note that supervisor and legal representative cannot act concurrently. The role of supervisor \/ board of supervisor is to monitor the action of the director(s) and report to the shareholder for any misconduct of the director(s).[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Director”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]At least one director is needed, and the director can be individual of any nationality over 18 years old. Director can be the same individual as the legal representative and shareholder. Director shall be responsible for the day-to-day operations of the WFOE.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Bank Account”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]Basic account: receiving income and paying expenses such as employee salary in CNY. Capital account: injecting capital fund from shareholder(s) and paying expenses such as goods payment in a foreign currency.[\/vc_column_text][\/vc_column_inner][vc_column_inner column_padding=”padding-8-percent” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” advanced_gradient_angle=”0″ gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/2″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid” gradient_type=”default”][split_line_heading animation_type=”line-reveal-by-space” font_style=”h3″ text_color=”#212d84″ line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Foreign Enterprises Representative Office(RO)”][\/split_line_heading][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Definition”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]Legal extension (in China) of a limited company incorporated outside China.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Choice of Name”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]The name of a RO shall follow the name of the holding company and must be in Chinese. Pre-approval procedure for name is not necessary.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Registered Capital”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]Registered capital is not necessary.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Business Scope”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]Representative office can only engage in business liaison and shall not engage in any other business activity.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Registered Address”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]All RO must have a physical office. A proper rental agreement, duly filed with the local Housing Administrative Bureau, is required. Note that only a portion of the commercial building are eligible to register a foreign RO.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Parent Company”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]The Parent Company of a RO can be a company incorporated in any country except sensitive country such as Iran, Iraq, etc.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Chief Representative”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]Each RO should have one chief representative, and he or she can be of any nationality over 18 years of age. A secondary representative is optional. The chief representative is responsible to represent the RO in all legal aspects.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Bank Account”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]RO can open and operate a bank account in China for the purpose of receiving funding from the parent company and payment of local expenses.[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]\n\r\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”full_width_background” full_screen_row_position=”middle” column_margin=”none” equal_height=”yes” content_placement=”middle” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_color=”#ffffff” scene_position=”center” top_padding=”100″ constrain_group_1=”yes” bottom_padding=”100″ top_padding_tablet=”30″ constrain_group_3=”yes” bottom_padding_tablet=”30″ top_padding_phone=”30″ constrain_group_5=”yes” bottom_padding_phone=”30″ bottom_margin=”80″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” id=”home” advanced_gradient_angle=”0″ overlay_strength=”0.5″ gradient_direction=”top_to_bottom” shape_divider_position=”bottom” bg_image_animation=”none” shape_type=”straight_section” gradient_type=”default”][vc_column column_padding=”padding-4-percent” column_padding_tablet=”no-extra-padding” column_padding_phone=”no-extra-padding” column_padding_position=”right” column_element_spacing=”20px” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” zindex=”100″ advanced_gradient_angle=”0″ gradient_direction=”left_t_to_right_b” overlay_strength=”0.3″ width=”1\/2″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid” offset=”vc_col-xs-12″ gradient_type=”default”][split_line_heading animation_type=”line-reveal-by-space” font_style=”h3″ text_color=”#212d84″ line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Part II: Accounting and Record Retention”][\/split_line_heading][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Accounting”][\/split_line_heading][vc_column_text]Every company in China should maintain sufficient accounting records regarding their income and expenditure to enable its taxable profits to be readily determined. In practice, all documents related to business operations of the company including bank statements, sales and purchase invoices, receipts and invoices for expenses and all contracts signed by the company should be properly kept. Proper management account including balance sheet,profits and loss account and general ledger should be prepared on a monthly basis in accordance with \u201cAccounting Law of the People\u2019s Republic of China\u201d, \u201cEnterprise Accounting Standards\u201d and \u201cEnterprise Accounting Principles\u201d.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Audit Requirement”][\/split_line_heading][vc_column_text]FIEs are required to compile audited financial statements at the end of each fiscal year in accordance with relevant laws, regulations and administrative requirements. The audited financial statements should be prepared by a Certified Public Accountant in China. The State Tax Bureau requires all enterprises to provide a verification report of the annual enterprise income tax on a yearly basis.[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Record Retention”][\/split_line_heading][vc_column_text]The accounting records of a company required to be retained for at least 15 years.[\/vc_column_text][\/vc_column][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.5″ width=”1\/2″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid” offset=”vc_col-xs-12″][vc_row_inner column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” text_align=”left” row_position=”default” row_position_tablet=”inherit” row_position_phone=”inherit” overflow=”visible” pointer_events=”all”][vc_column_inner column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ background_image=”2195″ background_image_position=”center center” background_image_loading=”default” font_color=”#ffffff” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” advanced_gradient_angle=”0″ gradient_direction=”left_to_right” overlay_strength=”0.5″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” parallax_bg=”true” parallax_bg_speed=”minimum” border_type=”simple” column_border_width=”none” column_border_style=”solid” gradient_type=”default”][divider line_type=”No Line” custom_height=”28vw” custom_height_tablet=”40vh” custom_height_phone=”300px”][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]\r\n\r\n
[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”full_width_background” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_color=”#f7f5f3″ scene_position=”center” top_padding=”100″ constrain_group_1=”yes” bottom_padding=”100″ top_padding_tablet=”30″ constrain_group_3=”yes” bottom_padding_tablet=”30″ top_padding_phone=”30″ constrain_group_5=”yes” bottom_padding_phone=”30″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” advanced_gradient_angle=”0″ overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/4″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][\/vc_column][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_blank” column_position=”default” advanced_gradient_angle=”0″ gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/2″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid” gradient_type=”default”][vc_column_text]\n
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