Viewpoints from Kaizen

According to the rules of the State Council on revenue sharing system, the tax revenue in China may divided into Central tax revenue, local tax revenue and the tax revenue shared between the Central and local governments. (1) Central tax revenue: domestic Consumption Tax; Customs Duties; VAT and Consumption Tax collected by the Customs on behalf. (2) Local tax revenue: Individual Income Tax; City and Township Land Use Tax; Farmland Occupation Tax; Fixed Assets Investment Orientation Regulation Tax; Land Appreciation Tax; House Property Tax; Urban Real Estate Tax; Inheritance Tax (not yet legislated); Vehicle and Vessel Usage Tax; Vehicle and Vessel Usage License Plate Tax; Deed Tax; Slaughter Tax; Banquet Tax; Agriculture Tax and Animal Husbandry Tax and their local surtaxes. Tax revenue shared between the Central and local governments: a. Domestic VAT: 75% for Central Government and 25% for Local Governments; b. Business Tax: the part consolidated paid by […]

GongShangQiZi [1995] No.107 May 9, 1995 Shenzhen Administration for Industry and Commerce: Your request for instruction, ShenGongShangZhu [1995] No.6, has been received, upon deliberation, the reply is given as follows: 1. The approval of the writing off registration by enterprises is a conduct of administrative enforcement of law by the administration for industry and commerce and a concrete measure to maintain normal economic order and protect lawful business operation. Enterprises that end business shall apply to the former registration authority to write off registration in accordance with Article 20 of the Regulations of the People¡¦s Republic of China on Administration of Registration of Corporate Legal Persons (hereinafter referred to as the Regulations). 2. Under normal circumstances, enterprises shall write off registration in accordance with procedures prescribed in Article 21 of the Regulations upon the approval of the registration authority, which captures their business license and cachet and notifies the deposit […]

GongShangQiZi [2000] No.166 August 3, 2000 Yunnan Administration for Industry and Commerce: We have studied your request for instructions on your reply to the Letter of the Intermediate People¡¦s Court of Kunming, Yunnan Province (YunGongShangZi[2000] No.35) and now reply as follows: I. In accordance with related business registration administration provisions stipulated in the Regulations on Company Registration Administration, the Regulations for Controlling the Registration of Enterprises as Legal Persons, and the Implementing Opinions on Related Issues of Business Registration Administration of the State Administration of Industry and Commerce (GongShangQiZi[1999]No.173), the corporate capacity or operation qualifications of enterprises should be terminated as of the approval of registration cancellation or suspension of the business license. Enterprises failing to pass the annual examination are deprived of the qualifications for continuance of operation prior to the approval of registration cancellation or suspension of the business license; however, their corporate capacity or qualifications as operating […]

Decree of the State Council of the People’s Republic of China No. 584 The Regulations on Administration of Registration of Resident Offices of Foreign Enterprises, which was adopted at the 132nd executive meeting of the State Council on November 10, 2010, is hereby promulgated and shall enter into effect as of March 1, 2011. Premier Wen Jiabao November 19, 2010 Regulations on Administration of Registration of Resident Offices of Foreign Enterprises Chapter I General Provisions Article 1 The regulations shall be formulated for the purpose of regulating the establishment and business activities of resident offices of foreign enterprises. Article 2 Resident offices of foreign enterprise in the regulations (hereinafter referred to as representative office) refers to the working bodies established by foreign enterprises in accordance with the Regulations within China engaging in non-profit programs related to their own business and does not possess the status of a legal person. Article […]

(Effective Date: G1986.09.01) Article 1. In accordance with the Interim Regulations of the People’s Republic of China Concerning the Control of Resident Representative Offices of Foreign Enterprises and in the light of the actual situation in Shanghai, the regulations are formulated with a view to facilitating the development of international economic and trade contacts and technical exchange and controlling the resident representative offices in Shanghai of foreign companies, enterprises and other economic organizations (hereafter referred to as foreign enterprises). Article 2. Resident representative offices of foreign enterprises (hereafter referred to as resident representative offices) shall be understood as those engaged in business-contact, service and non-direct-profit-making operations. But, for those provided for by inter-government agreements, they shall be treated in accordance with those agreements. Article 3. Any foreign enterprise desiring to establish its resident office in Shanghai should entrust a Shanghai enterprise or company that deals with foreign business to submit […]

Regulations for the Implementation of the Individual Income Tax Law of the People’s Republic of China Article 1 These Regulations are formulated in accordance with the Individual Income Tax law of the People’s Republic of China (hereinafter referred to as the “Individual Income Tax Law”). Article 2 For the Purposes of Article 1 of the Individual Income Tax Law, the term have domicile in China means reside in the territory of the PRC by reason of their household registration, family or economic interests; the term income gained within and outside China means income derived from sources inside and outside the territory of the PRC respectively. Article 3 Unless otherwise provided by the finance and tax authorities under the State Council, the following income, whether the place of payment is within the territory of the PRC or not, shall be the income derived from sources inside the PRC: (1) Income from […]

Registration of Resident Representative Office (Permanent Representative Office) in Shanghai, China 1. Features of Permanent Representative Offices 1.1 Legal Status of a Permanent Representative Office The Permanent Representative Office (also known as Resident Representative Office) is a non-legal entity operating representing its parent company foreign companies registered outside China, including those registered in Hong Kong, Macau and Taiwan). A Permanent representative office is not allowed to engage itself in business activities, issue invoices on its own, remitting outward, signing sales or purchase contracts, or receiving income from services performed but may act as a liaison and promotion office for its parent company. 1.2 Name of a Permanent Representative Office The name of the Permanent Representative Office should be in the form of “Name of the Foreign Enterprise + Name of the City + Representative Office (or Office)”. For example, USA New York LLC Shanghai Representative Office. 1.3 Business Address (Registered […]

1. Features of Permanent Representative Offices 1.1 Legal Status of a Permanent Representative Office The Permanent Representative Office (also known as Resident Representative Office) is a non-legal entity operating representing its parent company foreign companies registered outside China, including those registered in Hong Kong, Macau and Taiwan). A Permanent representative office is not allowed to engage itself in business activities, issue invoices on its own, remitting outward, signing sales or purchase contracts, or receiving income from services performed but may act as a liaison and promotion office for its parent company. 1.2 Name of a Permanent Representative Office The name of the Permanent Representative Office should be in the form of ¡§Name of the Foreign Enterprise + Beijing + Representative Office (or Office) ¡¨. For example, USA New York LLC Beijing Representative Office. 1.3 Business Address (Registered Office) Before submitting the documents for application for registration to the Beijing Administration […]

The establishment of foreign investment enterprises consists of three phases: (1) approval of the project proposal, feasibility study report, Joint Venture Contract and Articles of Association; (2) registration with the AIC; and (3) post-establishment procedures. Post-establishment Registration After an FIE is registered with the AIC and obtains the Business License or the Enterprise Legal Person Business License, the FIE should handle the following procedures; (1) Enterprise Code Each enterprise is assigned a fixed enterprise code, which is unique nationwide. The technology supervision authorities are in charge of the enterprise code registration. After the business license of an FIE is issued, the FIE should apply for enterprise code registration as soon as possible. All the other registrations and procedures, such as tax registration and opening bank accounts, must use the enterprise code certificate of the FIE. For an FIE possessing legal person status, the technology supervision bureau will issue an Enterprise […]

Registration of Changes-Extension of Residency Term In accordance with Regulations on the Registration and Administration of Permanent Representative Office of Foreign Enterprises, the foreign enterprise shall apply with the registration authority for the alternation of registration within 60 days before the expiration of the residency term in case the representative office intends to continue to engage in business activities after the expiration of residency term. The following materials are required for the purpose of the extension of residency term for a RO in Beijing, China: 1. Legalized incorporation documents of the headquarters of the Beijing RO; 2. Legalized banker’s reference letter of the headquarters of the Beijing RO; 3. Application form for change of registration of resident representative office of foreign enterprise; 4. Registration Certificate and representative card of the representative (s); 5. Company chop, financial chop and name chapter of the Beijing RO; 6. Bank Account Opening Permit and […]