Foreign Investment Trading Enterprise - Conpak CPA Limited

Foreign Investment Trading Enterprise

Along with rapid development of China economy, international trades have taken place more frequently and registered foreign commercial enterprises have already been an important mode of investment in China for overseas investors. Benefited by commercial system reform, currently subscription system for registered capitals and system of approval for establishment are implemented for foreign companies who register commercial enterprises in China, in which provision of bank credit certificates is not required. After successfully registering foreign-invested commercial enterprises, not only can investors enjoy concession policies of export duty-free and tax refund, but also assign others to run shops by the mode of franchising.

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 Information and 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 6%, 9% and 13%
    • 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 5,000,000 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 RMB 1,000,000, with staff less than 80 and total assets not exceeding RMB 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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Ms. Jenis Lee
+852 2666 2882
Ms. Alisa Ma
+86 10 5659 1126
Ms. Susan Chen
+86 21 5389 6622
+86 138 1890 7030
Ms. Lindy Jiang
+86 755 8828 8737
Ms. Cindy Wong
+65 6966 2200
Ms. Jenis Lee
+65 6966 2288

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