China

Tax Guide to Taiwan Share Transfer   Unless specified, all companies in this Guide refer to those that established with accordance to Taiwan’s Company Act. Including both limited companies and companies limited by shares.   According to Taiwan’s Company Act, Securities Exchange Act, Security Exchange Tax Regulation, Business Tax Law and Income Tax Act, different taxes are levied on the transfer of shares due to the difference in the identification of the owners and the objectives of the transaction. This Guide, therefore, provides a brief explanation of tax liability incurred during the transfer of shares.   Since 1st January 2016, income tax is no longer charged on securities transactions income made by individuals. Instead, any certified stock transferred by individuals is charged with securities transactions tax at 0.3% of the gross proceeds, rather than securities transactions income tax. Meantime, stamp duty is not imposed in this activity.   In comparison, […]

China Releases Strict Administration Rules on Financial Leasing Companies   China Banking and Insurance Regulatory Commission  has just released the Interim Measures for Supervision and Administration of Financial Leasing Companies (hereinafter referred to as the Measures) on 9 June 2020. The Measures consist of six chapters and 55 articles. The following contents of the Measures have attracted much attention of the insiders.   Sort out the Existing Financial Leasing Companies   The financial leasing companies will be divided into three categories, i.e. normal operation category, abnormal operation category and illegal operation category. The abnormal operation category mainly refers to the financial leasing companies with abnormal operations such as lost contact and empty shell.   Lost contact refers to a financial leasing company meeting one of the following conditions: (1)   cannot be contacted; (2)   cannot be found at its registered address; (3)   although the staff of the company can be contacted, […]

Hainan Free Trade Port VS Shanghai Free Trade Zone At the celebration of the 30th anniversary of Hainan Special Economic Zone, the Party Central Committee has decided to support Hainan in building a pilot free trade zone across the island, and to support Hainan in gradually exploring and steadily promoting the construction of a free trade port with Chinese characteristics. On June 1, the General plan for the construction of Hainan free trade port was released, and the construction of Hainan free trade port officially kicked off. The plan shows China’s will and determination to comprehensively deepen reform and opening up in the new era. Since its release at the beginning of the month, it has attracted wide attention from all parties. So what are the highlights and signals of the plan?   The plan comprehensively expounds the construction of Hainan free trade port from the following four aspects: General […]

Shanghai will Further Innovation and Open Wider and Expand Foreign Investment   With the closing of the third session of the 13th National People’s Congress. The two sessions in this special period attracted the attention of the whole world. At the meeting, “stabilizing foreign investment” became a hot topic. Many representatives and members of the committee made suggestions to reduce the negative list and further the market access eased. Shanghai has been the first choice for foreign capital to enter the Chinese market for a long period. Under the background of the current global war, “epidemic”, the global economy is full of various uncertainties, and international capital is looking for a safer “haven”. This year’s government work report pointed out that in the face of changes in the external environment, we should unswervingly expand opening, stabilize the industrial chain supply chain, and promote reform and development through opening up. Shanghai […]

Invest in Qianhai China Qianhai is located at the western part of Shenzhen, eastern coast of the Pearl River which sits at the crossroad of the main development axis of the Pearl River Delta and coastal functional expansion belt. Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (hereinafter as Qianhai Cooperation Zone) is the only platform supported by the government to encourage the cooperation between Shenzhen and Hong Kong in modern service industry.   The functions of Qianhai Cooperation Zone are as follows: Shenzhen-Hong Kong cooperation pilot zone, institutional innovation zone, modern service industry agglomeration zone, structural adjustment zone. It focuses on the development of innovative finance, modern logistics, headquarters economic, technology and professional services, communications and media services, business services.   Qianhai Cooperation Zone is also part of China (Guangdong) Pilot Free Trade Zone, Qianhai & Shekou Area of Shenzhen. Qianhai Cooperation Zone overlaps the functions and policies of […]

December 2019 China Taxation Guidance on Annual Individual Income Tax Declaration for Fiscal Year of 2019 in China On December 31, 2019 China’s State Administration of Taxation issued the “Announcement of Annual Individual Income Tax Declaration for Comprehensive Individual Income for fiscal year of 2019”, which provides detailed guidance for handling the annual individual income tax declaration for fiscal year of 2019. We have sorted out the main content of this announcement as following for your reference. In accordance with the provisions of the Individual Income Tax Law, by the end of fiscal year of 2019, individual residents need to aggregate four types of income, including “Wages and Salaries”, “Labor Remuneration”, “Author’s Remuneration”, and “Royalties” (hereinafter refer to as “Comprehensive Income”), and deduct RMB60,000 expense, special deductions, special additional deductions and other deductions determined by the laws for the period of 01.01.2019 – 31.12.2019; then multiply with the applicable tax […]

Wholly Foreign Owned Company (WFOE) 1. Status Such a company is independent legal entity registered with only foreign capital in China and under Chinese law. The managing director (if only one director is appointed) or Board of directors and legal representative are appointed by the foreign parent company. The WFOE abides by the Chinese company law and regulations like any other Chinese company. 2. Legal liability The WFOE is liable to its assets like a limited liability company in Western legal practice. The minimum capital to be registered is usually around USD120,000. In some cities and for some industries, however, the minimum capital required could be as low as USD12,000. 3. Commercial Activity Chinese corporate law restricts companies to their business scope, i.e. the range of business activities it can perform. A WFOE is also restricted in such a way. The business scope of a WFOE is usually restricted to […]