Foreign Investment Trading Enterprise - Conpak CPA Limited

Foreign Investment Trading Enterprise

Along with the implementation of the Measures on the Administration of Foreign Investment in Commercial Fields (hereinafter referred to as "Measures"), the former regional restrictions on foreign investors are abolished. Moreover, business scopes are able to be expanded, and the requirement for registered capital is largely reduced. Foreign invested commercial enterprises, with flexible operation modes, can be established in a manner of proprietorship, joint venture or cooperation, grant others to open stores by way of franchising, and also engage in one or more sales businesses at the same time. More importantly, once being approved, the foreign invested commercial enterprises will automatically have rights to import and export, so they are very popular among overseas investors.

Registered Capital

No specified requirement (except specific industry)

Scope of Business

  •  Foreign investment enterprises engaged in wholesaling or trading business
    • Commodity wholesaling or trading
    • Commission agency
    • Commodity Importation/Exportation
    • Other related supporting business
    • Franchising others to open stores
    • They can be engaged in one or more selling operations with the commodity lines to be noted in the contracts or the articles of association concerning the scope of business.
  • Foreign investment enterprises engaged in retailing business
    • Commodity retailing
    • Self-supported commodity importation
    • Purchase of domestic products for exportation
    • Other related supporting business

Required Documents

  • Investor's qualification certificate of entity, or natural person's ID card
  • Directors, supervisors and mangers' appointment documents and ID cards
  • Legal representative's appointment document and ID card
  • The certificate for right of use or the contract for lease of house of the proposed store to be opened
  • Import/export product catalog
  • Lease contract or certificate of title
  • Documents or certificates for earlier setup examination and approval

Required Time

About 35 workdays

Taxes Involved in Operation of Foreign Investment Enterprises

  • Value Added Tax
    • General Value Added Tax Payers pay VAT at 17%
    • Small-scale Value Added Tax Payers pay VAT at 3%
    • General Value Added Tax Payers refer to commercial enterprises with annual sales value exceeding RMB 800,000 and with established financial system, while commercial enterprises failing to meet the requirements are small-scale Value Added Tax Payers. Those qualified as general Value Added Tax Payers can credit the Input Tax paid on purchase of goods against the output tax paid on sales. Those empowered to import/export are entitled to free export and refund. However, small-scale Value Added Tax Payers cannot credit the tax paid on purchase, while they are entitled to free export but no refund.
  • Corporate Income Tax
    • Income tax rate is 25%
    • Small scale and small profit companies are subject to corporate tax rate of 20%

    Criteria for a small-scale and small profit company: a company that cannot engage in business restricted and prohibited by the PRC government and its annual taxable profit does not exceed $300,000, with staff less than 80 and total assets not exceeding $10 million

  • Tariff

    Tariff rates are generally subject to the prices of import /export goods, which shall be equal to the quantity of import /export goods multiplied by quoted price per unit.

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