China WFOE Registration Guide (16) – Registration Licenses and Certificates Obtained after Incorporation of WFOE

Introduction

It is part of a company’s set-up process to obtain various certificates and stamps/seals from Chinese Government Bureaus. These various certificates and stamps/seals are required in the company’s dealings with the bureaus. Many foreign investors can be confused about the usage of these items. What follows is a description of each of the license and certificate obtained after the registration of a WFOE in China is completed.

1. WFOE Registration Certificates and Licenses

Certificate of Approval (Original, Duplicate)
Issued By: Local Bureau of the Ministry of Commerce

Main Items:
~ Approval Number
~ Date of Approval
~ Name of Organisation
~ Address of Organisation
~ Type of Business
~ Business Scope
~ Total Investment
~ Registered Capital
~ Name of Investors
~ Business Duration (10, 20, 30 or 50 years)

Purpose:
The certificate provides the approval for the foreign investors to set up a company in Shanghai. It expresses the relationship between the investors and the company and is normally used to prove the investors’ ownership of the company.

Business License (Original, Duplicate, IC Card)
Issued By: Local Bureau of the State Administration of Industry and Commerce

Main Items:
~ Name of Organisation
~ Address of Organisation
~ Name of Legal Representative
~ Registered Capital Amount
~ Type of Business
~ Business Scope
~ Business Duration (10, 20, 30 or 50 years)

Temporary Business License

The temporary Business License is applicable while the company is awaiting capital injection. The capital has to be injected according to the approved Articles of Association. After the capital is fully injected, the effective period in the business license will be changed to be the same as the business duration of the company.

Purpose:
It is an attestation that the company is legally incorporated. The company can commence business, recruit staff, sign contracts etc. in its own name.

The Business License specifies the business scope and operation period of the company.

Organisation Registration Certificate (Original, Duplicate, IC Card)
Issued By: Local Technology Quality Supervisory Bureau

Main Items:
~ Organisation Code
~ Name of Organisation
~ Type of Business
~ Address of Organisation
~ Validity (1, 1.5, 2 or 3 years)

Purpose:
It gives the company an Organisation Registration Code, similar to an identification number of an individual. The code will be used in the company’s dealings with various bureaus and government authorities, e.g. tax filing, opening of bank accounts, imports and exports etc.

Taxation Registration Certificate (Original & Duplicate)
Issued By: Local State Taxation Bureau

Main Items:
~ Taxation Registration Number
~ Levy Management Code
~ Name of Organisation
~ Address of Organisation
~ Type of Business
~ Registered Capital Amount
~ Business Scope
~ Name of Legal Representative

Purpose: It is the approval certificate from the Shanghai State Taxation Bureau and is used as evidence of tax registration with the tax authority.

Financial Registration Certificate (Original & Duplicate)
Issued By: Local Finance Bureau

Main Items:
~ Financial Registration Number
~ Name of Organisation
~ Name of Legal Representative
~ Address of Organisation
~ Type of Business
~ Registered Capital
~ Business Scope
~ Validity

Purpose: It serves as evidence that the entity is registered with the Finance Bureau [Local Bureau of the Finance Ministry]. It is used when the entity needs to apply for financial subsidies.

Statistics Registration Certificate
Issued By: Local Statistics Bureau (e.g. Shanghai Statistics Bureau)

Main Items:
. Financial Registration Number
. Name of Organisation
. Name of Legal Representative
. Address of Organisation
. Type of Business
. Registered Capital Amount
. Business Scope
. Validity

Purpose: The company has to submit a statistics report to the Shanghai Statistics Bureau every month with a financial report attached. The report includes basic information of the company, staff strength, average salary etc. All the information will be collected and published as part of the provincial/city/national statistics by the Statistics Bureau. This certificate is also needed for tax filing.

Customs Registration Certificate
Issued By: Local Customs (e.g. Shanghai Customs)

Main Items:
~ Customs Registration Number
~ Name of Organisation
~ Name of Legal Representative
~ Address of Organisation
~ Type of Business
~ Registered Capital
~ Business Scope
~ Validity

Purpose: It is an approval issued by the Shanghai Customs. The company can import and export office furnishings and equipment for its own use after obtaining the Customs Registration Certificate. If the company is in the business of import/export trading and distribution, it will require the Customs Registration Certificate to carry on these activities.

Foreign Exchange Registration Certificate (Original & IC Card) Foreign Exchange Approval Letter
Issued By: State Administration of Foreign Exchange (SAFE) [Local Branch]

Main Items:
~ Registration Number
~ Organisation Code
~ Name of Organisation
~ Address of Organisation
~ Total Investment
~ Registered Capital Amount
~ Type of Business
~ Business Scope

Purpose: The Foreign Exchange Registration Certificate includes information on the company’s registered capital, total investment and the company’s foreign exchange bank account(s). All this information are recorded in the foreign exchange account card. The Foreign Exchange Approval Letter grants the company the approval to open a capital account for injection of its registered capital.

2. Company Documents

When a company applies for a Certificate of Approval, the Articles of Association and Feasibility Study Report have to be submitted with other documents to the Local Foreign Investment Commission (e.g. Shanghai Foreign Investment Commission, SFIC). Once satisfied that the requirements are met, the SFIC will issue the Certificate of Approval which implies that the Articles of Association and the Feasibility Study Report are approved, and the entity can be set up.

Articles of Association

Purpose:
The Articles of Association is a very important document of a company. It includes detailed information of the company, such as its investors, capital, board of directors, business management, taxation, finance and audit, distribution of profits, labour management etc. It is the constitution document of the company.

Feasibility Study Report

Purpose:
It analyses the feasibility of the establishment of the company, including market analysis, equipment, environmental protection, management framework, work flow, economic benefit forecast etc. The authority will not approve the set-up of the company if the information and flowcharts are not detailed or do not match the facts.

3. Company Seals

Every company has four important seals. They are the Company Seal, Legal Representative Seal, Financial Seal and Tax Invoice Seal. The company needs to have these seals carved and registered with the Shanghai Municipal Police Bureau.

Company Seal Purpose: Contracts shall take effect with the Company Seal. As such, the seal needs to be kept in safe custody.

Legal Representative Seal Purpose: The Legal Representative Seal on a document indicates his endorsement.

Financial Seal Purpose: The Financial Seal is required to effect bank and cheque transactions.

Tax Invoice Seal Purpose: The Tax Invoice Seal is required to effect the invoices issued by the company.

4. Other Seals

A company may also have other seals; such as the Contract Seal and Customs Seal.

Contract Seal Purpose: This seal can represent the company when signing contracts. Therefore, it is very important to keep it safely.

Customs Seal Purpose: This is a prerequisite to apply for the Customs Registration Certificate. It will be used in the Customs entry/exit.