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China Company Incorporation

Having a vast territory and well-developed manufacturing industry, in recent years China has continuously opened finance, service and trade industries, and significantly reduced the investment entry requirements of foreign enterprises in order to attract more foreign investments. At present, while no need to make paid-in registration capitals and provide bank credit certificates, foreign enterprises only have to set up filing in the regulatory authorities for easy registration.

Industries with Investment Incentives

Foreign investments are encouraged in industries ranging from manufacturing, wholesale and retail, leasing and commercial service, scientific research and technical service, agriculture, forestry, animal husbandry and fisheries, hydro-environment and public utility management, service organisations for the handicapped, elders and children, certain culture and sports, to entertainment.

Industrial and Commercial Annual Report

Foreign invested enterprise shall undergo an industrial and commercial annual report from 1 January to 30 June every year from the following year after the incorporation.

Joint Annual Report

Foreign invested enterprises shall undergo a joint annual report generally from 1 January to 30 June every year from the following year after the incorporation (the specific time is subject to the announcement by Ministry of Commerce).

Direct Investment-related Registration of Stock Rights and Interests

Foreign invested enterprises shall undergo a direct investment-related registration of stock rights and interests generally from 1 January to 30 September every year from the following year after the incorporation.

Employment Contract

An employment labour contract must be signed for recruitment in China, and the rights and obligations of both parties shall be stipulated therein. The enterprise shall sign an employment contract with the employee within one month from the start of his/her employment. Labour contracts are classified into employment contracts with a fixed period, labour contracts without a fixed period and employment contracts with a period to complete the prescribed work.

Social Security Insurance and Housing Provident Fund

In order to secure social welfare, enterprises set up in China have to pay certain amount of social insurances and housing provident funds for their employees each month, which are usually calculated in percentage of employees’ monthly salaries and together borne by the enterprises and the employees. In view of different living standards among cities, the accrual proportions in calculation vary from one city to another. The accrual proportions for social insurances and housing provident funds are shown below:

An Enterprise Employee’s Proportion of Contribution to the Social Insurance Funds
City Item Proportion Contributed by the Enterprise Proportion Contributed by the Employee
Beijing Social Security 30.8%-32.5% 10.2%+3 yuan
Housing Fund 5%-12% 5%-12%
Shanghai Social Security 31.2%-32.9% 10.5%
Housing Fund 7% 7%
Guangzhou Social Security 23.29%-24.81% 10.2%
Housing Fund 5%-12% 5%-12%
Shenzhen Social Security 15.09%-22.84% 8.6%-10.5%
Housing Fund 5%-12% 5%-12%
Dongguan Social Security 15.96%-17.66% 8.7%
Housing Fund 5%-12% 5%-12%
Hangzhou Social Security 27.5%-28.2% 10%+4 Yuan-10.5%+4 Yuan
Housing Fund 12% 12%
NanJing Social Security 29.5%-31.2% 10.5%+10 Yuan
Housing Fund 8%-12% 8%-12%
Qingdao Social Security 28.9%-30.32% 10% -10.3%
Housing Fund 5%-12% 5%-12%
Suzhou Social Security 29.2%-30.9% 10.5%+5 Yuan
Housing Fund 8%-12% 8%-12%
Note: The base of payment of the Social Insurance Funds of the above cities is their average monthly salary, with its minimum and maximum at 60% and 300% respectively of the average salary.

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