China-RO


China is one of the most ancient civilizations in the world which has a 5-thousand year history. Throughout centuries the power in China transferred from one dynasty to another, moreover, sometimes China became a part of a foreign state (e.g. Yuan and Qing dynasty). The territory of China was invaded on a regular basis, however, most of the invaders were Sinicized eventually and assimilated into Chinese ethnos, and the territories became Chinese. The period of the Tang and Song Dynasties in the 7th – 14th centuries is called the Golden Age of China due to the majority of scientific discoveries and cultural achievements. The last dynasty was Qing, which was overthrown by the revolution of 1911. The result of the revolution was establishment of the Republic of China in 1912 led by Sun Yatsen, the leader of the Chinese Nationalist Party “Guomindang” who was promulgated the President. In 1928 Guomindang under the command of Chiang Kai-shek managed to unite the country. A lot of efforts to build Chinese state were made during 1937-1945 Sino-Japanese War. Increased disruption between Guomindang and Communist Party of China made the unification impossible and caused the next round of civil war in China. The war ended in splitting of China into two parts: the People’s Republic of China and the Republic of China (Taiwan). In the meantime, most countries do not recognize Taiwan as a sovereign state and tend to support China’s position that Taiwan is one of the provinces of PRC.

Service packages

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Service item Express Standard Optimum
Company registration
Legal address per year
Secretarial services for the first year
Fees and duties for the first year
Apostilled bound set of incorporation documents
Compliance fee
Nominee service per year
Bank Account Pre-approval
Price

6 150 USD

6 150 USD

6 650 USD

I want to order «»

Contact method: and / or

Core Services

6 150 USD

— Incorporation

including incorporation tax, state registry fee, including Compliance fee

980 USD

— Annual government fees

Stamp Duty and Administration for Industry and Commerce incorporation fee

3 000 USD

— Corporate legal services

including registered address and registered agent, NOT including Compliance fee

150 USD

—Delivery of documents by courier mail

DHL or TNT, at cost of a Courier Service

500 USD

— Apostilled set of Statutory documents

Related services

Налоговый Сертификат / Tax Exemption Certificate

Company’s tax residence certificate for access to double tax treaties network

Tax Certificate / 税务登记证

Document issued by a tax authority after incorporation.

Compliance fee

Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

250 USD

Basic

simple company structure with only 1 physical person

50 USD

For legal entity in structure under GSL administration

additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

100 USD

For legal entity in structure not under GSL administration

additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

350 USD

For client with high risk Status

Cost of incorporation, including first year servicing 6150
Cost of annual service, starting from the second year 3000
Open account in 26855
Incorporation timescale for a turnkey company 90 days
Government tax 980
Country 26709

General information shortly

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Total area Population Capital Unemployment Corruption perceptions index rank
9.596.960 sq.km 1.349.585.838 (2013) Beijing 4.1% (2012) 80
Location Eastern Asia
National currency Renminbi
Conditional reduction of currency CNY
Against USD 6.12
Climate, average max and min t° extremely diverse; from tropical in the south to subarctic in the north; in the north and northwest avg. winter t (January) is -25°С; avg. summer t (July) is +22°С; in the central part avg. summer temperature (July) is +20°; avg. winter temperature (January) is -5°; in the south avg. summer temperature (July) is +28°; avg. winter temperature (January) is +18°
Time difference from Moscow + 5 hours
Dialing code +86
State language Chinese
Ethnic groups 92% are ethnic Chinese, the rest 8% are 55 ethnic groups among which the most populous are Zhuang, Hui, Uigur, Yi, Miao, Tibetans, Mongols, etc.
Literacy rate 91%
Credit rating A+
Government type socialist state
Executive branch Head of government: Premier; Government: State Council, formed by the National People’s Congress
Legislative branch National People’s Congres (unicameral body, 2.987 members), elected for 5 years
Judicial branch Supreme People’s Court, local people’s courts, special people’s courts
GDP per capita rank 87 (2012)

Corporate info

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Shelf companies permitted Legal system Incorporation timescale for a turnkey company Cyrillic alphabet permitted in company name Local registered office
No civil law with socialist characteristics 90 days No Yes
Types of entity Equity Joint Venture (EJV), Co-operative Joint Venture (CJV), Wholly Foreign-Owned Enterprise (WFOE), Representative Office (RO)
Incorporation timescale for a new company 5 days
Company suffix 代表处 (Representative Office in Chinese)
Sensitive words foreign words; names of foreign countries (regions), international organizations, parties, government bodies; words causing damage to state security of China and misleading people
Local registered agent No
Information to be kept at the registered office Certificate of Incroporation, accounts
Seal required, type of seal RO seal, account seal, chief representative seal
Redomiciliation (to, from) permitted not permitted

Director and secretary

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Minimum number of directors Residency requirements for directors Corporate directors permitted Disclosure to local agent Disclosure to public
1 representative No No Yes No
Directors’ meetings/frequency/location Yes / according to articles / no requirements
Company secretary required No
Residency requirements for a secretary No
Qualified secretary required No
Corporate secretary permitted No

Shareholder and beneficiary

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Minimum number of shareholders Residency requirements for shareholders Corporate shareholder permitted Disclosure to local agent Disclosure to public
N/A N/A No No No
Meetings/frequency/location No requirements
Beneficiary info disclosure to No

Shares and share capital

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Minimum authorized share capital Minimum issued share capital Minimum paid share capital Authorized capital payment deadlines Bearer shares permitted
No requirements No requirements No requirements No requirements No
Issued capital payment deadlines No requirements
Standard currency Yuan
Standard authorized share capital No
Standard par value of shares No
Shares with no par value permitted No

Taxes

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Min. rate for corporate tax Capital gains tax VAT Withholding tax Exchange control
25% Regular rate 13% 10%/10%/10% Yes
Personal tax 3-45%
Corporate tax (in detail) The standard income tax rate is 25%. There are preferential tax rates for companies from certain industries (in particular, high-tech), regions / zones and small businesses
VAT. Details The standard VAT rate is 13%. For some goods and services, rates of 9% and 6% apply. The tax rate for small VAT payers is 3%
Other taxes Social contributions, Real estate taxes
Government fee Yes
Stamp duty 0,005-0,1%

Accounts

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Requirement to file accounts Publicly accessible accounts Audit required Requirement to file Annual Return Publicly accessible Annual Return
Yes No Yes Yes No
Requirement to prepare accounts Yes
Double tax treaties network 103
Tax Exchange Information Agreement network 10
OECD member No
Offshore/onshore status according to the RF laws No

GENERAL INFORMATION

General info

China (officially the People's Republic of China) is a sovereign state located in East Asia with total area of 9 596 960 sq. km (the 3d after Russia and Canada). Population if China is 1 349 585 838 чел (2013), making the world's most populous country. As for its ethnic composition 92% of China’s population are ethnic Chinese, the rest 8% are 55 ethnic groups among which the most populous are Zhuang, Hui, Uigur, Yi, Miao, Tibetans, Mongols, etc. The official language is Chinese.
The capital of China is Beijing. National currency is Renminbi (CNY). There is about 6.1 CNY in one US dollar, and 8.2 CNY in one euro.
Climate is extremely diverse; tropical in the southeast to extremely continental in the northwest. Despite the fact the most part of the country is in the mild climate zone, wide range of latitude, longitude and height in China cause extremely different temperatures conditions in various regions. In Beijing which is in the north climate is extremely continental. The summer is hot and humid with average temperature of +28 -30 °C. The winter is cold and dry. The average temperature in January is -7°C. In the southern part of China average temperature varies from -10°C in January to +28°C in July.
Time difference with Moscow is +4 hours.
Human development index (2013) is 0,699 (ranks 101st in the world).
Calling code is +86.

History

China is one of the most ancient civilizations in the world which has a 5-thousand year history. Throughout centuries the power in China transferred from one dynasty to another, moreover, sometimes China became a part of a foreign state (e.g. Yuan and Qing dynasty). The territory of China was invaded on a regular basis, however, most of the invader were Sinicized eventually and assimilated into Chinese ethnos, and the territories became Chinese. The period of the Tang and Song Dynasties in the 7th – 14th centuries is called the Golden Age of China due to the majority of scientific discoveries and cultural achievements. The last dynasty was Qing, which was overthrown by the revolution of 1911. The result of the revolution was establishment of the Republic of China in 1912 led by Sun Yatsen, the leader of the Chinese Nationalist Party “Guomindang” who was promulgated the President. In 1928 Guomindang under the command of Chiang Kai-shek managed to unite the country. A lot of efforts to build Chinese state were made during 1937-1945 Sino-Japanese War. Increased disruption between Guomindang and Communist Party of China made the unification impossible and caused the next round of civil war in China. The war ended in splitting of China into two parts: the People’s Republic of China and the Republic of China (Taiwan). In the meantime, most countries do not recognize Taiwan as a sovereign state and tend to support China’s position that Taiwan is one of the provinces of PRC.

Government Type

Government type of the PRS is based on a principle that according to Constitution “the People's Republic of China is a socialist state of democratic dictatorship of people, led by the working class (through the Communist Party of China) and based on the union of workers and peasants. The government system is socialistic. All the power belongs to people. People exercise their state power through National People’s Congress and local congresses of people of different levels.
The legislative branch in China is represented by National People’s Congress (NPC). Local congresses are subject to PNC.
The head of state, chairman of the PRC, jointly with the Standing Committee of PNC exercise their supreme state power in the country. On the basis of resolutions by PNC and its Standing committee he publishes laws, appoints officials in the State Council, issues orders, etc.
The executive bodies are the State Council and local people’s governments of different level.
The judicial branch is represented by people’s courts and people’s procuratorates. People’s courts include Supreme People’s Court, local people’s courts, special people’s courts (military courts, etc.). People’s procuratorate is a state body of monitoring law-abidingness and includes Supreme People’s Procuratorate, local people’s procuratorates, special people’s procuratorates.
Beside, among supreme state bodies is Central military council, which controls all the armed forces in the PRC.

Economy

In 1978 China set a course for socialist market-oriented economy which began to combine two systems: planned economy and market economy. The main features of such economy are attraction of investments, economic independence of enterprises, family contract in the rural area, reduction of public sector share in the economy, opening of free economic zones, poverty alleviation, science and technology development.
Since 1980 Chinese economy grew 15% annually, by the end of 1990s rate of economic growth reduced to 8% a tear, but since joining WTO in 2001 inflow of direct investments and expansion of export caused new acceleration. At present China is the world's second largest economy by nominal GDP (8.23 trillion US dollar) and by purchasing power parity after the United States. According to different estimates, by 2020 China should catch up with the US and become three times larger by 2040.
Free economic zones play a very important role in China’s development. Today there are 4 economic zones in China: Shenzhen, Zhuhai, Shantou, Xiamen, 14 free-trade zones, 53 high-tech zones (including large modern Silicon Valley), more than 70 science and technology parks for experts graduated from foreign universities, 38 export-oriented processing production zones.

CORPORATE INFORMATION

Legal system

Legal system of PRC is of mixed nature. It is a combination of ancient legal traditions and modern law based on the conception of “socialism with Chinese characteristics” and some principles of civil law.
Over the centuries Chinese legal system was influenced by Buddhism, Confucianism and Taoism. Only since the latter half of the 19th century a tradition similar to Western one began to arise. However, this process was disrupted after establishment of PRC in 1949, when the country began to borrow socialistic law.
Since 1979 within the course of liberalization legitimacy system and law protection activity began to restore, basic branches of law were codified again or for the first time in history of PRC (e.g. the first Criminal codex and Criminal procedure code were adopted in 1979, General Provisions of Civil Law were adopted in 1986, labor law was codified in 1994).
As a result of reforms which lasted for about 20 years a new legislation system combining socialist (Soviet) law and some elements of civil law (in economic field) was formed.
The basic sources of law in PRC are laws and other legal acts. Hierarchy is formed by Constitution, legal acts, resolutions by Standing Committee of People’s National Congress, resolutions by State Council, by-laws by other state and local bodies.

Types of entity

PRC legislation allows incorporation of various types of entity, including limited company (with special requirements to one person limited companies and state-owned enterprises) and company limited by shares (divided into public companies and non-public companies).
However, for foreign investors companies with foreign investment are more suitable. They include the following types:
Joint Venture – JV, which can be of two types:
- Sino-foreign equity joint ventures - EJV;
- Sino-foreign co-operative joint ventures - CJV
EJV and CJV are similar in a lot of aspects (authority approval procedure, management structure, etc.). But there are still some differences:
1. Unlike EJV, CJV can not have a status of independent legal entity. If it is not an independent legal entity, expenses are much lower, but the participants have a higher liability.
2. In EJV liability is limited to the extent of capital contribution. Profit is distributed in proportion with the number of shares belonging to a shareholder. In CJV control, profit and risk are distributed according to the contract.
CJV has a major disadvantage. Since it is compulsory to agree upon the conditions of the contract, establishment of such a company can take a lot of time and money. Besides, there is always a risk that the partners will not reach an agreement.
Joint Venture can be incorporated by one Chinese and one foreign investor. Such type of entity is usually used to hire Chinese labors and apply foreign technologies and know-how.
Wholly foreign owned enterprise
After China joined WTO and Chinese government had to weaken regulation towards investments, foreign investors tend to incorporate wholly foreign owned enterprise(WFOE). Such business entities comprised about 67% of all direct investments in China in 2004.
WFOE is a limited company owned by foreign investors. Although liability is limited, a legal representative of such a company should be appointed, his liability is unlimited.
Representative office – RO
At present representative office is the cheapest and simplest way to represent a foreign company in China. The goal of a representative office is to arrange contacts with Chinese businessmen and consumers in the name of a company. Therefore, representative office is like an agent between a foreign company and Chinese partners. RO cannot carry on direct business. Its scope of business only covers market studying, promotion action arrangement, exhibition participation, contract conclusion, but only in the name of head office. However, if scope of business is not connected with production, but consulting, RO can provide consulting services.

Advantages and disadvantages of JV, WFOE and RO

Type of entity Advantages Disadvantages
JV 1. An ability to conclude any kind of contract, carry on business of full value; 2. Application of Chinese labor and equipment; 3. Intellectual property rights of JV are protected by law. 1. Deficit of information on a future Chinese partner; 2. Feasibility study and negotiations with a Chinese partner take a lot of time; 3. Necessity to share profit with a partner.
WFOE 1. Wholly owned means independence from Chinese partner, full control over business and management; 2. An ability to operate officially and get profit in RMB, not just represent the interests of a head office; 3. An ability to convert RMB to US dollar during transaction abroad; 4. Intellectual property rights protection. 1. A foreign company may be short of knowledge and connections of a Chinese partner; 2. Registration is a very complicated procedure, which may take up to 6 months.
RO Comparatively simple and inexpensive procedure of registration. The whole process may take about 1 month. 1. Legal capacity of RO is limited; 2. Although RO does not have an income, it still has to pay taxes. Ro is considered to get income for covering its expenses in Chine, this income is taxable.

Depending on a form of activity the most suitable types of business entities to carry on business in China are WHOE and RO.

REGISTRATION

Registration of RO

To register a representative office in PRC it is necessary to meet the following requirements:
  • A foreign company, establishing RO on the territory of PRC, should be incorporated at least 2 years beforehand RO establishment;
  • RO should have a local registered office, therefore during registration it is compulsory to sign a lease contract.

Registration procedure include following stages:
1. Preliminary approval in the competent authority depending on a form of activity (only for RO, whose head office is occupied in fields of special regulation of PRC - motor transport and shipping companies, audit and law firms, inspection companies, financial organizations, insurance companies, certification companies, tourist firms, intellectual property rights protections organizations, mass media, airline companies, television and radio companies, fund broker companies, non-profit organizations, as well as profit organizations of countries which did not establish diplomatic relations with PRC);
2. Registration in Administration for industry and commerce (5 days)
Required documents:

Application form;
Office lease certificate issued by the owner of property;
Copy of incorporation of the company, confirming that the company was established at least 2 years ago;
Articles of association of the company;
Original document confirming the power of a chief representative (including signing powers) and representatives;
Resume of a chief representative and other representatives, copies of their passports and photos;
Original business solvency certificate from a bank which has business activity with a company,
Copy of a property right certificate or documents confirming office acquisition, copy of business activity right if the owner of the office is legal entity;
Power of attorney;
Registration form of a secretary of a contact person.

All the documents, except from 1, 2 and the last one, should be notarized and certified at the Chinese Embassy or Consulate in the host country. The documents in the foreign language shall be translated into Chinese. Registration authorities shall make a decision to register RO or not within 15 days after receiving all required documents. In case of positive decision RO obtains a Registration Certificate and work cards for representatives confirming their status in PRC and needed to apply for work permit and residence permit. Registration certificate should be placed in a prominent place in the office.
3. Post registration procedures (2-3 months):
  • Registrations of RO in various state authorities – police, quality control administration, tax administration, statistics administration, labor and social protection authorities;
  • Seal production and opening of a bank account for RO.

The most part of these procedures are undergone consecutively.

Restriction of activities and bank account

Chinese law restricts freedom of business activity of RO of foreign companies. Not being a legal entity, RO can only carry on business indicated in the Registration certificate. RO is not allowed to do trade and carry on any business activities. RO can only build contacts, do market studies, hold promotion actions for the benefit of the head office. It cannot receive profit on its bank account for goods or services sales, but in the meantime it can represent the interests of its company in closing deals and pay taxes for such deals. To transfer profit abroad, a bill should be drawn up in foreign currency and money should be transferred to foreign company’s account (the simplest way); or RO has to get a permission from Currency control administration for RMB exchange and its transfer abroad.

Name

Name of RO should consist of the following parts: nationality, name of a foreign company in Chinese, name of resident city and a word “Representative Office” in Chinese.
The name should not contain:
  • Words causing damage to state security of China or social interests;
  • Names of international organizations;
  • Words forbidden by law, administrative acts or regulations by State Council of PRC.

Local registered office

RO should have a local registered office to go through registration procedure. Chinese law requires from companies and their branches to carry on business at their registered address. There fore, RO cannot be registered in one place and be located in another place. Registered office of RO should meet the following requirements:
  • it is required to provide a consent letter from the owner, as well as documents confirming office property rights (property certificate or purchase contract);
  • it should not be an office in property of a foreign company or foreign individual;
  • it should an office as marked in the respective documents;
  • office lease agreement must be signed for at least 12months.

Seal

After obtaining a Registration certificate the seal should be produced. For this, you have to submit to to the police the following documents:
  • Original and copy of Registration Certificate;
  • If application is submitted by chief representative: seal production application, original and a copy of passport of chief representative
  • If application is submitted by an authorized person: original and a copy of passport of chief representative, original and a copy of passport of an authorized person, power of attorney signed by chief representative.

Prolongation

Registration certificate is given out for not more than 3 years, then it should be prolonged on the condition that RO’s activities comply with Chinese law. The term for which Registration certificate is issued depends on the term of lease agreement (if lease agreement is signed for a year, registration certificate is issued for a year).

RO STRUCTURE

Representatives

RO should have a chief representative. In accordance with an appointment document which gives signing powers chief representative can sign registration documents in the name of head office.
Depending on needs, foreign company can send 1-3 representatives, e.g. total number of employees at RO must not exceed 4 people.
In the following cases an individual can not be appointed chief representative or representative:
  • Sentenced for damage done to security of China or social interests;
  • An individual whose registration certificate was annulled or withdrawn or whose RO was closed according to law due to damage to security of China or social interests less than 5 years ago;
  • Other cases approved by State administration for industry and commerce.

Confidentiality and public access to information

Registration authorities should keep a record on registration of RO of foreign companies in Registration Roster of RO open to reading and copying.
In case of establishment or changing of RO foreign company should publish respective information in approved mass media by registration authorities.
If RO is suspected in violation of registration law, registration authorities have a right to investigate the company and its employees, read, copy and withdraw illegal contracts, receipts and booking accounts, etc.

TAXATION

Personal income tax

Chinese tax residents pay tax on their worldwide income, and non-residents pay tax on income sourced in China.
The income of residents is generally taxed at progressive rates:
  • Income up to CNY 36,000 is taxed at the rate of 3%
  • From CNY 36,000 to 144,000 at the rate of 10%, tax reduced by CNY 2,520
  • From CNY 144,000 to 300,000 at the rate of 20%, tax reduced by CNY 16,920
  • From CNY 300,000 to 420,000 at the rate of 25%, tax reduced by CNY 31,920
  • From CNY 420,000 to 660,000 at the rate of 30%, tax reduced by CNY 52,920
  • From CNY 660,000 to 960,000 at the rate of 35%, tax reduced by CNY 85,920
  • Over CNY 960,000 at the rate of 45%, tax reduced by CNY 181,920

The income of non-residents in the form of employment income, remuneration for services, and author's remuneration is taxed within each of these income categories at the following rates:
  • Income up to CNY 3,000 is taxed at the rate of 3%
  • From CNY 3,000 to 12,000 at the rate of 10% rate, tax reduced by CNY 210
  • From CNY 12,000 to 25,000 at the rate of 20%, tax reduced by CNY 1,410
  • From CNY 25,000 to 35,000 at the rate of 25%, tax reduced by CNY 2,660
  • From CNY 35,000 to 55,000 at the rate of 30%, tax reduced by CNY 4,410
  • From CNY 55,000 to 80,000 at the rate of 35%, tax reduced by CNY 7,160
  • Over CNY 80,000 at the rate of 45%, tax reduced by CNY 15,160

Business income is taxed on a progressive scale at the rates ranging from 5% to 35%.
Other income categories (rental income, interest, dividends, capital gains, and other income) are generally taxed at a flat rate of 20%. Interest on deposits at Chinese banks is tax exempt.

Corporate income tax

Chinese companies pay corporate income tax on their worldwide income, and foreign companies on income sourced in China.
The standard corporate income tax rate is 25%. There are reduced tax rates for companies from certain sectors/industries (in particular, high-tech) or regions/zones, and for small businesses.
Gains from the sale of assets are taxed at the regular tax rates.
Dividends received by a Chinese company from another Chinese company are not taxed except where dividends are from a listed company and the holding period is less than 12 months.

CFC rules

If a Chinese company alone or jointly with other Chinese tax residents controls a foreign company from a low-tax jurisdiction (where the tax rate is less than half of the Chinese one, i.e. less than 12.5%), then its undistributed profit can be included in the taxable profit of the Chinese company. Control arises if a company owns at least 10% of the voting shares of a foreign company, and Chinese residents own in total, directly or indirectly, more than 50% of such shares. Control can occur in other cases as well.
The profit of a CFC is not included in the tax base of the Chinese taxpayer if the CFC is from a non-low-tax country (the list of such countries is compiled by the tax office), the CFC's profit arises mainly from active business operations, or if the CFC's profit is less than CNY 5 million.

Withholding tax

Payments of Chinese-sourced income, including dividends, interest, and royalties, are subject to 10% withholding tax.
The tax rates are reduced under double tax treaties (DTT).

VAT

The standard VAT rate is 13%. Some goods and services are subject to the rates of 9% and 6%. The tax rate for small VAT payers is 3%.
The amounts of VAT (and of consumption tax, which is levied on sales of tobacco, alcohol and some other goods) are also subject to urban construction and maintenance tax at the rates varying depending on the taxpayer’s location: 7% for urban areas, 5% for county areas, and 1 % for other areas. VAT (and consumption tax) amounts are also subject to educational surtax at the rate of 3% and local educational surtax at the rate of 2%.

Social security contributions

Social security contributions are paid to the pension fund, medical fund, unemployment insurance fund, occupational injury insurance fund and others both by the employer and the employee.
The contribution rates and salary ceilings differ from city to city. For example, in Shanghai, the total mandatory contribution rate for the employee is 10.5%, for the employer – 27.16% to 28.52%, the monthly salary ceiling for assessing contributions is CNY 28,017 (calculated as the city’s average salary in the previous year, increased three times); there are also minimum thresholds for assessing contributions.

Property taxes

Real estate tax is payable at the rate of 1.2% of the value of buildings used for business purposes. Local authorities can reduce this tax. Alternatively, it is possible to pay 12% tax on the rental income.
In urban areas, a land-use tax is levied at the rates determined by the local governments as fixed CNY amount per square metre. The land-use tax is also levied on agricultural land used for other purposes.
A land appreciation tax is levied on the gains from the disposal of land use rights or real estate at progressive rates ranging from 30% to 60%.

Stamp duty and deed tax

Stamp duty is payable on certain documents at rates ranging from 0.005% to 0.1%.
Transactions involving ownership of land and real estate are subject to a deed tax levied generally at the rates from 3% to 5%.

Exchange control

China has a system of foreign exchange control and regulation.
The main regulatory bodies are the People's Bank of China and the State Administration of Foreign Exchange.
Regulation applies to exchange rates, payments made to and from abroad, and other operations.
There are special rules for companies with foreign investments.
The rules are gradually becoming more liberal. Systems of liberalized foreign exchange transactions are being used (tested) in the Shanghai zone and a number of other free trade zones.

ACCOUNTS

Annual Return

According to Chinese law every enterprise, including Representative office, in the period from March,1 to June,30 has to submit annual return, which is composed of the following documents:
  • annual return form;
  • annual audit report, issued by audit company;
  • copy of registration certificate with official seal;
  • other documents, required by State administration for industry and commerce.

The said documents should first be filed in electronic version to local administration for industry and commerce. After electronic version is checked by competent authorities, it should be printed out and sent to these authorities.
If company fails to submit the documents in time, it should apply for prolongation, which is not more than 30 days. In case company fails to submit annual return in time, registration authorities send a warning. If within 60 days after warning was issued, the company still fails to submit annual return, its registration certificate is to be withdrawn.

Audit

RO is obliged to keep accounting books. Audit reports of RO do not differ much from those of companies.
Audit report can be fulfilled by representatives themselves or by hired auditor. There are no requirements for audit education or qualified auditor certificate.
Audit examinations are held annually by licensed auditors.

Tax returns

The tax year coincides with the calendar year.
Provisional corporate income tax returns are filed monthly or quarterly throughout the year, and the annual tax return is filed within five months of the reporting year-end.
Monthly or quarterly advance payments of corporate income tax are made throughout the year.
The final tax payment is due by the annual tax return filing deadline.

International law relations

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Party to the Hague Convention (Apostille) Legal system Double tax treaties network OECD member Offshore/onshore status according to the RF laws
No civil law with socialist characteristics 103 No No

Public authorities and legal acts

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List of laws and regulations
Act name Scope of law
Companies Law of the PRC limited companies, companies limited by shares
Law of the PRC on foreign capital enterprises wholly foreign-owned enterprises
Law of the PRC on sino-foreign equity joint ventures equity joint ventures
Law of the PRC on sino-foreign cooperative joint ventures cooperative joint ventures
Law of the PRC on corporate tax corporate tax
Law of the PRC on foreign capital enterprises and foreign enterpreises profit tax foreign enterpreises corporate tax
Law of the PRC on personal tax personal tax
Regulations on registration of representative offices of foreign companies registration of RO of foreign companies
Regulations on registration of companies company registration
Catalogue of industires fo foreign investment in PRC insdustries permitted for foreign investment
Tax treaties entered Albania, Algeria, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Bosnia and Herzegovina, Botswana, Brazil, Brunei Darussalam, Bulgaria, Cambodia, Canada, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Ecuador, Ecuador, Egypt, Estonia, Ethiopia, Finland, Former Yugoslav Republic of Macedonia, France, Georgia, Germany, Greece, Hong Kongn (China), Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Korea (Republic of), Kuwait, Kyrgyzstan, Lao People's Democratic Republic, Latvia, Liechtenstein, Lithuania, Luxembourg, Macao (China), Malaysia, Malta, Mauritius, Mexico, Moldova (Republic of), Mongolia, Morocco, Nepal, Netherlands, New Zealand, Nigeria, Norway, Oman, Pakistan, Papua New Guinea, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Saudi Arabia, Serbia, Seychelles, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sudan, Sweden, Switzerland, Syrian Arab Republic, Tajikistan, Thailand, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Venezuela, Viet nam, Zambia, Zimbabwe
Tax Exchange Information Agreement (TEIA) Argentina, Bahamas, Bermuda, Cayman Islands, Guernsey, Isle of Man, Jersey, Liechtenstein, San Marino, Virgin Islands (British)
List of state regulatory authorities
PRC State Administration for Industry and Commerce http://www.saic.gov.cn/english/index.html
Enterprise Registration Bureau http://qyj.saic.gov.cn/
Beijing Administration for Industry and Commerce http://www.hd315.gov.cn/
Shanghai Administration for Industry and Commerce https://www.sgs.gov.cn/shaic/sgsEn!getSgsEnMain.action
PRC State Tax Administration http://www.chinatax.gov.cn/eng/
PRC Customs Administration http://english.customs.gov.cn/
State Currency Control Administration http://www.safe.gov.cn/wps/portal/english/Home
Bank of China http://www.pbc.gov.cn/english/130437/index.html
China Courts http://en.chinacourt.org

    Legal Partner of Review:

    Zhong Yin Lawyer

    Established in 1993, Zhong Yin Law Firm is one of the first and largest law firms specialized in finance securities law service and legal risk management services in China and ranks one of the top ten law firms in China.

    Zhong Yin Lawyer

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