Q&A about setting up foreign-owned Limited Liability Company in China

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Drafted by Dale Chen 20230518 v1
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China Foreign-funded Limited Liability Company
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China – Organizational Structure of Foreign-funded Companies
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What are the types of Foreign-funded Companies in China?

Foreign-funded companies in China are typically classified into several different types based on their legal structure and the degree of foreign ownership.
The most common types of foreign-funded companies in China include:

1. Wholly Foreign-Owned Enterprises (WFOEs): These are companies that are 100% owned by foreign investors and are registered as limited liability companies under Chinese law. WFOEs are typically used for manufacturing and trading activities.
2. Joint Ventures (JVs): These are companies established through a partnership between foreign and Chinese investors. The partners share ownership, management, and profits of the joint venture. JVs are often used for manufacturing, technology transfer, and market entry.
3. Representative Offices (ROs): These are foreign companies that establish a presence in China without engaging in any profit-making activities. ROs are typically used for market research, business development, and liaison activities.
4. Foreign-Invested Partnership Enterprises (FIPEs): These are limited liability partnerships established by foreign investors and Chinese partners. FIPEs are typically used for service-oriented businesses, such as professional services.

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What are the procedures for setting up the Foreign-funded Limited Liability Company in China?

Setting up a foreign-funded limited liability company (LLC) in China involves several steps and procedures.
Here is a general overview of the process:

1. Determine the scope of business and the location of the company.
2. Confirm the company name and have it pre-approved by the Administration of Industry and Commerce (AIC).
3. Draft the articles of association of the company and have them reviewed and approved by the AIC.
4. Obtain a business license from the AIC.
5. Apply for the company’s official chop and have it made.
6. Open a basic bank account with a bank in China and deposit the registered capital into the account.
7. Obtain a capital verification report from a qualified accounting firm to verify the payment of the registered capital.（optional）
8. Register for tax.
9. Apply for other relevant permits and licenses depending on the industry and location of the company.

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What are the requirements for holding a position of director, manager/ supervisor, etc. in China’s foreign-funded companies?

To hold a position of director, manager/supervisor, company secretary, or other positions in China’s foreign-funded companies, there are certain requirements that must be met.
These requirements may vary depending on the type of company and the specific position, but some common requirements include:
The specific roles and requirements for each position are as follows:

1. Director /legal representative: Directors are responsible for the overall strategic direction of the company and for ensuring that the company is being managed effectively and in accordance with applicable laws and regulations. They must have high ethical standards and a deep understanding of corporate governance principles. Directors must also have effective communication and interpersonal skills and be able to work collaboratively with other board members and senior management. There are no specific nationality or age requirements, but they must have a valid work visa or residence permit if they want to stay in China for long time and get paid by local company.
2. Manager/Supervisor/: Manager/Supervisor are responsible for the day-to-day management of the company, including implementing the company’s strategies and policies, managing employees, and overseeing production and operations. They must have relevant education and work experience, as well as strong leadership, communication, and problem-solving skills. Depending on the industry, there may be specific technical or professional qualifications required. Managers and supervisors must also comply with all relevant laws and regulations and have a valid work permit or residence permit if they want to stay in China for long time and get paid by local company.
3. Person in charge of finance, They must have strong organizational, communication, and interpersonal skills. The financial manager should have relevant education and work experience in labor law, accounting, or business administration. Non-Chinese nationals must have a valid work permit or residence permit if they want to stay in China for long time and get paid by local company.

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How long the share capital of a China Foreign-funded Limited Liability Company must be hold before it can be sold?

In China, there is no specific time period that the share capital of a Foreign-funded Limited Liability Company (FLLC) must be held before it can be sold.
However, there are certain restrictions on the transfer of shares of FLLCs.
According to the Company Law of the People’s Republic of China, the transfer of shares of FLLCs is subject to the approval of the company’s board of directors or shareholders’ meeting, and the transfer must be registered with the company’s registration authority.
Additionally, the company’s articles of association may contain provisions that restrict the transfer of shares or require that shares be offered first to existing shareholders before they can be sold to third parties.
Furthermore, if the FLLC is involved in certain industries, such as telecommunications or finance, the transfer of shares may be subject to additional regulatory approvals or restrictions.

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Is a Resident Shareholders required for incorporation of Foreign-funded Limited Liability Company in China?

No, resident shareholder is not required mandatorily.

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Is a Resident Director required for incorporation of Foreign-funded Limited Liability Company in China?

No, a resident director is not explicitly required for the incorporation of a Foreign-funded Limited Liability Company (FLLC) in China.
However, it is recommended that at least one director be a resident of China in order to facilitate communication with regulatory authorities and to ensure compliance with relevant laws and regulations. It is also recommended that to appoint Evershine firm to be you local Company liaison in helping with communication with regulatory authorities and to ensure compliance with relevant laws and regulations.
According to the “Provisions on the Administration of Registration of Resident Representative Offices of Foreign Enterprises” and the “Implementation Measures for the Administrative Licensing Items for Foreign-Invested Enterprises”, which are two of the main regulations governing the incorporation of foreign-funded enterprises in China, there is no explicit requirement for a resident director.
However, these regulations do require that foreign-invested enterprises have a legal representative who is either a Chinese citizen or a foreigner.
The legal representative is responsible for the company’s daily operations and is the primary point of contact with regulatory authorities.

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Is there a company secretary required for incorporation of Foreign-funded Limited Liability Company in China?

No, a company secretary is not explicitly required for the incorporation of a Foreign-funded Limited Liability Company (FLLC) in China. But will need a AIC liaison who is responsible for communicating with regulatory authorities.
The AIC liaison can be either a resident or non-resident of China.

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What are the qualifications of a legal representative in China Foreign-funded Limited Liability?
Can a foreigner act as a legal representative?
If yes, he/she need a place of residence in China?

In China, the qualifications for a legal representative of a Foreign-funded Limited Liability Company (FLLC) are as follows:

1. Must be over 18 years of age.
2. Must have a clean criminal record and not be subject to any restrictions or prohibitions from serving as a legal representative.
3. Must have the capacity to independently assume civil liability.
   It is possible for a foreigner to act as a legal representative of an FLLC in China, as long as they meet the above qualifications and have a valid work permit or residence permit in China if they want to stay in China for long time and get paid by local company. However, it’s important to note that the process of obtaining a work permit or residence permit in China can be complex and may require significant documentation and time.
   The foreign legal representative may also need to have a good understanding of Chinese laws and regulations.

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Is it possible to establish a China foreign-owned company through an offshore company as holding company?

Yes, it is possible to establish a China foreign-owned company (WFOE) through an offshore company as the holding company.
This is a common practice for foreign investors who want to set up a WFOE in China.
The process involves first establishing an offshore company in a jurisdiction such as Hong Kong, Singapore, or the British Virgin Islands, and then using that company as the holding company for the WFOE in China.
This is typically done to take advantage of tax benefits and to simplify the administrative and regulatory procedures involved in setting up and operating a WFOE in China.
The offshore holding company will need to invest in the WFOE by contributing capital, such as cash or assets, in exchange for shares in the WFOE.
The WFOE will then be registered as a separate legal entity in China, with the offshore holding company as the majority shareholder.

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What are the special features of China wholly foreign-owned limited liability company (LLC)?

The wholly foreign-owned limited liability company (WFOE) is a popular form of foreign investment in China.
Some of the key special features of a WFOE in China are:

1. Ownership: A WFOE can be 100% foreign-owned and controlled, which means that the foreign investor has complete control over the company’s operations and decision-making.
2. Liability: The liability of the WFOE is limited to its registered capital, which means that the foreign investor’s personal assets are not at risk if the company faces financial difficulties.
3. Registered capital: A WFOE is required to have a minimum registered capital, which varies depending on the industry and the location of the company. The registered capital must be contributed in cash or other assets, and cannot be borrowed from a third party.
4. Business scope: The WFOE can engage in a wide range of business activities, subject to certain restrictions and regulations imposed by the Chinese government.
5. Taxation: A WFOE is subject to Chinese corporate income tax, which is currently set at a rate of 25%. However, the WFOE may be eligible for certain tax incentives and exemptions, depending on its industry and location.
6. Employment: A WFOE can hire both foreign and Chinese employees and is subject to Chinese labor laws and regulations.

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China Foreign investment: permitted industries, restricted industries (licensed industries) and prohibited industries.
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Are China foreign-investment industries and products be listed in a positive or negative list?
Or are there different approaches for foreign investment from different countries?

Yes, China has a foreign investment regulatory framework that includes a Negative List and a Catalogue of Encouraged Industries for Foreign Investment.
These lists outline the industries and sectors that are restricted or prohibited for foreign investment in China, as well as those that are encouraged and eligible for incentives.
The Negative List is a list of industries or sectors that are restricted or prohibited for foreign investment in China.
Foreign investors are not allowed to invest in businesses or industries that are listed on the Negative List, or that are not included on the Negative List but are subject to special restrictions or approvals.
The Catalogue of Encouraged Industries for Foreign Investment, on the other hand, is a list of industries and sectors that are encouraged for foreign investment in China.
Businesses or industries that are listed on the Catalogue may be eligible for various forms of incentives, such as tax breaks or expedited approval processes.
There are also different approaches to foreign investment from different countries in China.
For example, China has established free trade zones (FTZs) in several locations, such as Shanghai, Guangdong, and Fujian, which offer more liberal policies and incentives for foreign investment.
In addition, China has signed bilateral investment treaties (BITs) with many countries to promote and protect foreign investment.

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In the positive list, what are the industries that foreign investment is allowed to invest in, which are the industries that are restricted for foreign investment (licensed industries), and the industries that are prohibited to invest in by foreign investment?
Will the positive list be different for different countries?

The Positive List in China outlines the industries and sectors that are open to foreign investment and is periodically updated to reflect changes in government policy.
The Positive List is divided into two categories:

1. Industries where foreign investment is encouraged: These industries are open to foreign investment, and foreign investors are encouraged to invest in them.
   They may be eligible for various forms of incentives, such as tax breaks or expedited approval processes.
   Examples of encouraged industries include high-end manufacturing, advanced technology, and modern services.
2. Industries where foreign investment is permitted: These industries are open to foreign investment, but are subject to certain restrictions, such as caps on foreign ownership or requirements for special licenses or permits.
   Examples of permitted industries include transportation, telecommunications, and infrastructure.
   In addition, there are certain industries that are restricted or prohibited for foreign investment in China.
   These include industries that are considered sensitive from a national security or strategic perspective, such as defense, nuclear power, and media.
   The Positive List is generally the same for all foreign investors, regardless of their country of origin.
   However, the specific regulations and requirements for foreign investment may vary depending on the industry, location, and other factors.

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In the negative list, what are the industries that foreign investment is allowed to invest in, the industries that are restricted to foreign investment (licensed industries), and the industries that are not allowed to invest in foreign investment?
Will the negative list be different for different countries?

The Negative List in China outlines the industries and sectors that are restricted or prohibited for foreign investment.
The Negative List is periodically updated to reflect changes in government policy.
The Negative List is divided into three categories:

1. Industries and sectors that are prohibited for foreign investment: Foreign investors are not allowed to invest in these industries or sectors in China.
2. Industries and sectors that are restricted for foreign investment: These industries and sectors are open to foreign investment, but are subject to certain restrictions, such as caps on foreign ownership or requirements for special licenses or permits. Foreign investors may invest in these industries or sectors only after obtaining approval or meeting certain conditions.
3. Industries and sectors that are restricted for foreign investment and require a Chinese joint venture partner: In these industries and sectors, foreign investors are required to establish a joint venture with a Chinese partner. This means that the foreign investor may not own a controlling stake in the joint venture.
   The Negative List is generally the same for all foreign investors, regardless of their country of origin.
   However, the specific regulations and requirements for foreign investment may vary depending on the industry, location, and other factors.

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What are the restriction on foreign investment in China? For instance, what is the minimum share capital amount?
What are the rules for foreign shareholding ratio? Other?
Are they different for different countries?

Foreign investment in China is subject to various restrictions and regulations, including minimum share capital requirements, foreign shareholding ratio limits, and other rules.
The minimum registered capital required for a foreign-invested enterprise (FIE) in China depends on the type of company and the industry that is subject to corresponding regulation of relevent type.
Generally, there is no minimum registered capital for a Wholly Foreign-Owned Enterprise (WFOE). However, there are exceptions, and some industries may require higher amounts of registered capital.
Foreign shareholding ratios in Chinese companies are subject to certain restrictions, such as caps on foreign ownership or requirements for special licenses or permits.
The foreign shareholding ratio is determined by the industry and the type of business entity.
For example, some industries may require a Chinese joint venture partner, and in such cases, foreign investors may not own a controlling stake in the joint venture.
In addition to these requirements, foreign investors must also comply with various other regulations and requirements, such as obtaining government approvals and meeting certain legal and tax obligations.
The specific regulations and requirements for foreign investment in China may vary depending on the industry, location, and other factors.
While there are no specific regulations or requirements that vary based on the investor’s country of origin, the approval process and procedures for foreign investment may differ for investors from different countries.

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What are the licensed industries in China?
What is the difference between the industries that allow foreign investment, the industries that restrict foreign investment (licensed industries), and the industries that do not allow foreign investment?

In China, licensed industries are industries that require special permits or licenses to operate. These industries are also referred to as “restricted” industries or “special access” industries. Some of the licensed industries in China include finance, telecommunications, transportation, education, and healthcare.
The difference between industries that allow foreign investment, industries that restrict foreign investment (licensed industries), and industries that do not allow foreign investment is as follows:

1. Industries that allow foreign investment: These industries allow foreign investors to establish wholly foreign-owned enterprises (WFOEs), joint ventures with Chinese partners, or acquire shares in existing Chinese companies without any significant restrictions.
2. Industries that restrict foreign investment (licensed industries): These industries are open to foreign investment, but they require special permits or licenses from the Chinese government, and foreign investors may face restrictions on the percentage of ownership they can hold in the company.
3. Industries that do not allow foreign investment: These are industries that are closed to foreign investment, meaning foreign investors are not allowed to establish wholly foreign-owned enterprises or joint ventures, nor are they allowed to acquire shares in Chinese companies operating in these industries.
   It’s important to note that the regulations and requirements for different industries may vary based on location and other factors.
   Additionally, there may be different rules and regulations for different types of foreign investors, such as those from countries with which China has special trade agreements or partnerships.

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China-Foreign-funded Limited Liability Company document certification.
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What are the relevant investment documents required to establish a Foreign-funded Limited Liability Company in China?
Are there different documents for different countries?

The relevant investment documents required to establish a Foreign-funded Limited Liability Company (LLC) in China may vary depending on the industry and location of the proposed business.
However, some of the common documents required for the establishment of an LLC in China include:

1. Approval certificate from the relevant authorities: This certificate indicates that the proposed business has been approved by the relevant authorities in China.
2. Business license: This is a legal document that enables the LLC to operate in China.
3. Articles of association: This document outlines the management structure, internal policies, and other operational procedures of the LLC.
4. Capital verification report: This report confirms that the registered capital of the LLC has been paid in full.(optional)
5. Passport copies and other identification documents of the shareholders and legal representative(s).
6. Power of attorney or other documents authorizing a representative to act on behalf of the LLC during the establishment process.
   There may be additional documents required depending on the nature of the business and the location of the proposed LLC.
   The documentation requirements for different countries may vary depending on the specific regulations and requirements of that country.

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What are the procedures for the certification of documents related to the investment of Foreign-funded Limited Liability Company in China?
Are there different document authentication procedures for different countries?

Foreign investors need to follow specific procedures for document certification related to the investment of a Foreign-funded Limited Liability Company (LLC) in China.
These procedures are as follows:

1. Notarization of documents: Investors must have the relevant investment documents notarized by a competent authority in their home country. This includes the company’s articles of association, business license and other relevant documents.
2. Legalization of documents: After notarization, the relevant documents need to be legalized by the Chinese embassy or consulate in the investor’s home country. This is to verify that the notary public who signed the document is authorized to do so.
3. Translation of documents: All documents must be translated into Chinese by a qualified translator. The translation must be notarized by a local notary public or a Chinese embassy or consulate.
4. Submission of documents: The investor must submit the notarized and legalized documents to the relevant Chinese authorities during the company registration process.

R-cn-llc-4 China – Bank Account Opening of Foreign Subsidiaries
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What is the sequence steps of set up a Foreign-funded Limited Liability Company in China with share capital paid in place and opening a bank account? Which one should come first?

The sequence of steps for setting up a Foreign-funded Limited Liability Company (LLC) in China with share capital paid in place and opening a bank account can vary depending on the specific circumstances and location of the company.
Generally, the following sequence of steps may be followed:

1. Determine the scope of business and the location of the company.
2. Confirm the company name and have it pre-approved by the Administration of Industry and Commerce (AIC).
3. Draft the articles of association of the company and have them reviewed and approved by the AIC.
4. Obtain a business license from the AIC.
5. Apply for the company’s official chop and have it made.
6. Open a basic bank account with a bank in China and deposit the registered capital into the account.
7. Obtain a capital verification report from a qualified accounting firm to verify the payment of the registered capital.（optional）
8. Register for tax and obtain the tax registration certificate.
9. Apply for other relevant permits and licenses depending on the industry and location of the company.
   Generally, the payment of the registered capital into the company’s bank account should be completed before obtaining the capital verification report.

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What are the usual KYC regulations when opening a bank account with a Foreign-funded Limited Liability Company in China?

When opening a bank account for a Foreign-funded Limited Liability Company (LLC) in China, the usual Know Your Customer (KYC) regulations that need to be complied with include:

1. Providing identification documents: The legal representatives of the company are required to provide their identification documents, such as passport, identity card or driving license, as well as the company’s business license, articles of association, and other relevant documents.
2. Providing ownership and control information: The bank may also require information about the company’s ownership and control structure, including the names and details of its shareholders and directors.
3. Providing additional documentation: Depending on the bank’s policies and procedures, additional documentation may be required, such as information about the company’s beneficial owners or its source of funds.
4. In-person verification: The bank may require the legal representatives of the company to appear in person at the bank branch to complete the account opening process.

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Will the bank require a China local director when opening a bank account for a China wholly foreign-owned limited liability company (LLC)?

In general, the bank will not require a China local director when opening a bank account for a China wholly foreign-owned limited liability company (LLC).
However, it is possible that the bank may have specific requirements or preferences for the authorized signatories of the LLC’s bank account.
It is important to note that the specific requirements and procedures for opening a bank account for a China WFOE may vary depending on the bank and the location of the company.

R-cn-llc-5 China – Staff Work Permit, Visa, and Residence
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Can a Foreign-funded Limited Liability Company in China send expatriates to China as the Investor’s role?
What are the application requirements, documents and procedures for the work permit, visa, and residence permit?
Are there differences in different countries?

Yes, a Foreign-funded Limited Liability Company in China can send expatriates to China as the Investor’s role.
The application requirements, documents, and procedures for the work permit, visa, and residence permit may vary depending on the individual circumstances and the specific policies and regulations of the Chinese government.
However, there are some general requirements and procedures that are typically followed:

1. Work Permit: The Foreign-funded Limited Liability Company in China will need to apply for a work permit for the expatriate, which involves submitting various documents such as the employment contract, education and work experience certificates, and health examination report. The specific requirements and procedures may vary depending on the region and the individual’s qualifications.
2. Visa: Once the work permit is approved, the expatriate will need to apply for a visa, typically an M visa (business visa) or Z visa (work visa), at a Chinese embassy or consulate outside of China. The requirements for the visa application may include a valid passport, invitation letter from the Foreign-funded Limited Liability Company, confirmed invitation letter from commercial bureau and other supporting documents.
3. Residence Permit: After entering China, the expatriate will need to apply for a residence permit within 30 days. The application requirements may include a valid passport, work permit, health certificate, and other supporting documents.
   It is important to note that the specific application requirements and procedures may vary depending on the country of the expatriate’s origin and the specific policies and regulations of the Chinese government.

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Can a Foreign-funded Limited Liability Company in China send expatriates to China as the employee role?
What are the application requirements, documents and procedures for the work permit, visa, and residence permit?
Are there differences for different countries?

Yes, a Foreign-funded Limited Liability Company in China can send expatriates to China as employees.
The application requirements, documents, and procedures for work permits, visas, and residence permits for foreign employees in China may vary depending on the nationality of the employee and the specific circumstances of their employment.
Generally, the process involves obtaining a work permit, which requires a valid employment contract, a medical examination, and other supporting documents.
Once the work permit is obtained, the employee can apply for a visa and then a residence permit.
The application process usually involves submitting various documents, such as a passport, employment contract, and proof of financial support.

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What are the evaluation factors or requirements for a Foreign-funded Limited Liability Company in China when applying work permit, visa, and residence permit?
What is the relationship with the salary, capital, and turnover of Foreign-funded Limited Liability Company?
Are there differences for different countries?

The evaluation factors or requirements for a Foreign-funded Limited Liability Company (LLC) in China when applying for work permit, visa, and residence permit include:

1. The applicant’s personal information, including education, work experience, and job qualifications.
2. The applicant’s health condition, including physical and mental health checks.
3. The applicant’s criminal record, which should be clean.
4. The applicant’s employment contract, which should be signed with the Foreign-funded LLC in China.
5. The applicant’s salary, which should meet the local minimum salary requirements. In some case, it should meet the 4 times local minimum salary.
6. The capital and turnover of the Foreign-funded LLC in China may also be taken into consideration.
   The relationship between the applicant’s salary, capital, and turnover of the Foreign-funded LLC in China may impact the chances of obtaining the work permit, visa, and residence permit.
   If the company has a higher capital and turnover, it may have a better chance of obtaining these permits for its employees.
   However, the applicant’s salary must meet the local minimum salary requirements, regardless of the company’s capital and turnover.
   The requirements and evaluation factors may vary for different countries based on the bilateral agreements between China and the relevant country, as well as any specific regulations or policies.

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China- Registered Address and Operating Address of Foreign-funded Limited Liability Company in China.
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What are the regulations on the registered address during the company registration and future operating address of a Foreign-funded Limited Liability Company in China?

During the registration of a Foreign-funded Limited Liability Company (LLC) in China, the company is required to provide an actual registered address, which needs to be filed Administration of Industry and Commerce (AIC). However, there is also a possibility to use virtual address for registration, it vary on company type and business activity.
If there is a need to change the registered address after the company is established, the company must also file for the change with the local AIC.
As for the future operating address, it needs to comply with relevant regulations in the industry and region.
When choosing the operating address, it is important to ensure that it meets local planning, land use, environmental protection, fire safety, and other requirements, and comply with regulations set by the Administration for Industry and Commerce and the Tax Bureau.

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What are the specific regulations or requirements of a registered office address for a permitted industry of an LLC in China?

The regulations or requirements for a registered office address for a permitted industry of a Foreign-funded Limited Liability Company (LLC) in China are the same as those for any other industry.
The registered office address must be a physical location where the company can receive official notices and correspondence from the government, and it must be located within the administrative area of the company’s registration.
In addition, for certain industries, there may be additional requirements or restrictions on the location of the registered office.
For example, if the company is engaged in manufacturing or certain types of industrial activities, it may need to be located in an approved industrial zone or park.
It is important to note that the registered office address is not necessarily the same as the company’s operating address.
The operating address may be located elsewhere, depending on the nature of the company’s business and the availability of suitable facilities.
However, the registered office address must always be maintained and kept up to date with the relevant government authorities.

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Amount of investment, registered capital, and government fees for Foreign-funded Limited Liability Company in China.
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Are there any regulations on authorized share capital, registered share capital and paid-up share capital of a Foreign-funded Limited Liability Company in China?
Is there any requirement for minimum funds to be in place within a certain period?

Yes, for some certain industries or company type, there are regulations on authorized share capital, registered share capital, and paid-up share capital of a Foreign-funded Limited Liability Company (LLC) in China.
The authorized share capital refers to the maximum amount of capital that a company can raise through the issuance of shares, while the registered share capital refers to the amount of capital that the company is registered to issue.
The paid-up share capital refers to the amount of capital that has actually been paid by the shareholders.
According to latest Chinese company law, there is no minimum registered capital requirement for a foreign-funded LLC.
However, the minimum registered capital requirement may be required for certain industries or regions, as stipulated in the relevant laws and regulations.
In addition to the minimum registered capital requirement, there may also be requirements for the minimum amount of capital that must be in place within a certain period, as stipulated in the relevant laws and regulations.

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What is the relation between government fees with authorized share capital, registered share capital, and paid-up share capital of a Foreign-funded Limited Liability Company in China?

In China, the government fees for the incorporation and registration of a Foreign-funded Limited Liability Company (LLC) are generally not required any more. However, for some special permit, it is required and gennerally caculated based on the registered capital.
The registered capital is the amount of capital that the company registers with the government during the incorporation process, and it represents the maximum amount of capital that the company can raise from its shareholders.
The authorized capital, also known as the registered capital, is the maximum amount of capital that a company is authorized to issue to its shareholders.
The issued capital, or subscribed capital, is the portion of the authorized capital that the shareholders have agreed to subscribe to or purchase.
The paid-up capital, or registered capital, is the portion of the issued capital that the shareholders have already paid into the company.
In some cases, the government may require a certain amount of registered capital to be paid up within a certain period.
Overall, the relationship between government fees and authorized, issued, and paid-up capital of a Foreign-funded LLC in China is that the government fees are calculated based on the registered capital, which is the maximum amount of capital that the company can raise from its shareholders.

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Application of Certificate Number for a Foreign-funded Limited Liability Company in China
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What are the company certificate numbers needed to apply with the relevant legal entities for a foreign-funded Limited Liability Company in China?

There are several company certificate numbers required to apply for a Foreign-funded Limited Liability Company in China:

1. Business License Number (营业执照号码) issued by the Administration of Industry and Commerce (AIC).
2. Organization Code Certificate Number (组织机构代码证号码) issued by the Administration of Industry and Commerce (AIC).
3. Tax Number (税号) issued by the Administration of Industry and Commerce (AIC). It is same number as Business License Number.
4. Customs Registration Number (海关注册登记号码) issued by the local customs authorities (if applicable).
   These certificate numbers are required for various legal and regulatory purposes, such as tax reporting, import/export operations, and business license renewal.

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What are the certificate application for the Foreign-funded Limited Liability Company in China as a tax entity?

When setting up a Foreign-funded Limited Liability Company (LLC) in China, there are several certificates that need to be obtained for tax purposes. These include:

1. Business License: This certificate is issued by the he Administration of Industry and Commerce (AIC) and its business license number is required to register to local tax bureau for various tax-related matters, including corporate income tax, value-added tax (VAT), and business tax.
   This also serves as proof of the company’s registration and legal operation in China.
2. Openning bank account certificate: it is issued by People’s bank of China.
   It is important to note that the specific requirements and procedures for obtaining these certificates may vary depending on the location and industry of the Foreign-funded LLC.

R-cn-llc-8-30
What are the certificate application for Foreign-funded Limited Liability Company in China in relation to withholding tax on salary and employee benefits?

The relevant certificate applications for Foreign-funded Limited Liability Company (LLC) in China in relation to withholding tax on salary and employee benefits are as follows:

1. Business license number: This is required for the company to pay taxes on behalf of the employees.
2. Social insurance registration certificate: This is required for the company to make social insurance contributions on behalf of the employees.
3. Housing fund registration certificate: This is required for the company to make housing fund contributions on behalf of the employees.
4. Account of Individual income tax (IIT) withholding system: This is required for the company to withhold and pay IIT on behalf of the employees.
5. Labor contract: This is required to ensure that the company complies with labor laws and regulations in China, and to protect the rights and interests of the employees.
6. Payroll records: This is required to keep track of the salary and benefits paid to the employees, as well as the taxes and social insurance contributions withheld and paid by the company.
   Note that the specific requirements and procedures for obtaining these certificates may vary depending on the location and nature of the business.

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To summarize: Which of the following certificate numbers do Foreign-funded Limited Liability Company in China need to apply for?

Foreign-funded Limited Liability Company in China needs to apply for the following certificate numbers:
• Business license number
• tax number
• Social insurance certificate number
• Medical insurance certificate number
• Pension certificate number
• Other funds such as housing fund certificate number
• Import and export certificate number
• Franchise industry certificate number, if applicable.

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Incorporation procedures of China-Foreign-funded Limited Liability Company and key matters
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What are the procedures of setting up a Foreign-funded Limited Liability Company in China? Documents required? Competent Government unit? Websites?

The procedures for setting up a Foreign-funded Limited Liability Company (LLC) in China typically involve the following steps:

1. Choose a company name and submit an application for pre-approval of the company name to the Administration of Industry and Commerce (AIC) or its local branch where the company is to be registered.
2. Prepare the required documents for company registration, including articles of association, feasibility study report, and other documents depending on the industry and location.
3. Apply for business license from the AIC or its local branch.
4. Check-in tax at the local tax bureau.
5. Open a bank account and make an initial capital injection.
6. Apply for various certificates and permits required by industry and location, such as environmental permits, health permits, and fire safety permits.
   The documents required for company registration may vary depending on the industry and location, but generally include:
7. Articles of association.
8. Business license application form.
9. Passport or ID card of the legal representative.
10. Proof of address of the legal representative.
11. Lease agreement for office space.
    The competent government unit for setting up a Foreign-funded Limited Liability Company in China is the local branch of the Administration of Industry and Commerce.
    The websites of the relevant government authorities for company registration and related procedures can be found on the website of the China Council for the Promotion of International Trade (CCPIT).

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What are key consideration matters of when deciding to set up foreign-funded limited liability company in China?

When a foreign company considers setting up a foreign-funded limited liability company (LLC) in China, there are several key factors that should be considered:

1. Market opportunity: The first consideration is whether there is a market opportunity in China for the foreign company’s products or services. A thorough market research and analysis should be conducted to understand the local market conditions and competition.
2. Legal and regulatory environment: The legal and regulatory environment in China is complex and constantly changing. It is important to understand the laws and regulations that govern foreign investment and the specific requirements for setting up an LLC.
3. Investment and operating costs: The costs of setting up and operating a business in China can be high, especially in the major cities. It is important to carefully assess the investment and operating costs to ensure that they are sustainable and can generate a reasonable return on investment.
4. Human resources: The availability of qualified and skilled employees is essential for the success of any business. It is important to assess the availability and cost of local talent, as well as the need to bring in expatriate employees if necessary.
5. Cultural differences: China has a unique culture and business practices that may be different from those in the foreign company’s home country. It is important to understand and respect these cultural differences to ensure successful business operations in China.
6. Government relations: Building good relationships with the local government and relevant authorities is important in China. It is important to understand the local government’s policies, priorities, and expectations, and to build trust and credibility with the relevant government officials.
7. Intellectual property protection: Intellectual property protection is a major concern for foreign companies operating in China. It is important to understand the local laws and regulations related to intellectual property protection and to take appropriate steps to protect the company’s intellectual property.
8. Exit strategy: It is important to have a clear exit strategy in place in case the business does not succeed or if the foreign company decides to exit the market. This includes understanding the local laws and regulations related to winding up a business and repatriating funds out of China.
   These are some of the key considerations when deciding to set up a foreign-funded limited liability company in China.

Contact Us

Xiamen Evershine BPO Service Corp.
Room 724 No. 76 Hubin South Rd., Siming Dist., Xiamen City, PRC
Email: xmn4ww@evershinecpa.com

Discuss with our representative in Xiamen for further information:
Manager Bing Weng, UK Graduate School Alumni and a well-English speaker
Mobile: +86-180-5008-2372
Tel No.: +86-592-573-4710

Additional Information

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Evershine Potential Serviceable City (2 months preparatory period):
Evershine CPAs Firm is an IAPA member firm headquartered in London, with 300 member offices worldwide and approximately 10,000 employees.
Evershine CPAs Firm is a LEA member headquartered in Chicago, USA, it has 600 member offices worldwide and employs approximately 28,000 people.
Besides, Evershine is Taiwan local Partner of ADP Streamline ®.
(version: 2022/03)

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