Chinese companies - foreign-owned enterprises:
Foreign-owned Company
Foreign-owned enterprises is in accordance with relevant Chinese laws established in China, all the capital investment enterprises by foreign investors. Wholly foreign-owned enterprises do not include foreign enterprises and other economic organizations in China branches.
However, the establishment of wholly foreign owned enterprises shall be in accordance with the Ministry of Commerce promulgated the "Guidance Catalogue for Foreign Investment", which sets out what the Chinese Government's investment is prohibited, restricted or encouraged, the current version is the 2008 amendment. Foreign investors need to determine their investment before investing whether and under what restrictions.
Foreign-owned enterprises have the following advantages:
Compared with other types of enterprises, the establishment of the advantages of foreign-owned enterprises, including but not limited to:
1) can be avoided in the Chinese joint venture partner in the challenge;
2) restrictions on foreign-owned companies rarely, may be charged as income of RMB yuan and invoices issued to customers;
3) may be converting RMB profits to U.S. dollars for remittance overseas parent company;
4) better control of product quality and technical confidentiality;
5) The product does not require its own import and export certificates;
6) full disposal of human resources;
7) The higher degree of internal management and operation of the control.
8) In addition, foreign-owned enterprise which provides that only one executive director (unless the investors, board of directors, the number of directors at this time at least three). Executive Director can be of any nationality, can live anywhere.
9) If a wholly foreign owned enterprise located in bonded zones, export processing zones or provinces encourage foreign investment, the company entitled to statutory tax-exempt status.
The business scope of foreign-owned enterprises:
Chinese law the business scope of foreign investment is very strict control. Every foreign-owned enterprises should have a clear business scope of the approved scope of operation for legitimate business, this range will be marked on the business license. For a change, apply for and obtain approval to conduct. Of course, the need to have some approval authority to grant wider consultation business. As a result, the local industrial and commercial administrative organs in advance of communication to determine the appropriate scope of business of bringing help. After the founding of the company scope of business can change, but the best in the company carefully before formally established to determine the company's business.
Registration and paid-up capital:
The registered capital of enterprises with foreign investment, is defined as the establishment of foreign invested enterprises registered in the registration authority of the investment of the parties and the subscribed capital contributions. Paid-in capital refers to the part of all the investors have paid up capital. The Chinese government requires foreign investors must be registered within 3 months of the date of payment of at least 15% of the registered capital, and the rest can be paid in two years.
General tax information:
Since January 2008, the China's new corporate income tax rate of 15% to 25%, the rate depends on the company registration and company, and the trades. If a wholly foreign owned enterprise located in bonded zones, export processing zones or provinces encourage foreign investment, the company entitled to statutory tax-exempt status.
All companies are required under the PRC accounting standards for keeping proper accounting records. These accounting records, including monthly statements (business tax and personal income tax) and quarterly reports (corporate income tax). Will be declared overdue penalties and late fees.
Profit remittances:
China is a system of strict foreign exchange control countries. Chinese government to allow foreign-invested enterprises to remit their profits abroad, and this transfer does not require prior approval by the State Administration of Foreign Exchange. Prior to the distribution of profits shall be paid all taxes and statutory reserve fund, while the profits are not allocated in previous years and current year profits to be distributed. Business prohibition to recover the registered capital.
Repatriation of profits abroad for foreign exchange banks shall submit the following documents:
• Tax Certificate
• the financial situation of the recent audit report
• Board Resolution on distribution of profits
• Foreign Exchange Registration Certificate of Foreign-invested enterprises
• Foreign-invested enterprises verification report
• the provisions of the State Administration of Foreign Exchange and other documents
Foreign-owned enterprise decision-making bodies:
Law on the organizational structure of foreign-owned enterprises is not specified, can be interpreted as foreign investors left for the operating room for flexibility. Practice: there are three foreign-owned enterprise management system:
(1) The Board or executive director, the highest foreign-owned enterprises decision-making body.
(2) General Manager, responsible for daily management.
(3) responsible for the general management of institutions.
Board of Directors meeting at least once a year, board meetings chaired by the chairman. Board members is a quorum of 2 / 3. If the director can not attend the meeting may appoint any person to vote on his behalf.
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