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China - General |
| Author | Topic: Setting up trading company in China |
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Rajesh m Agarwal |
posted 22 August 2005 10:34 AM
I would like to setup a trading establishment with import export licence in china. I am an Indian national. Please let me know the formalities to be completed to start such a firm. Does a local partner is compulsory and list me the categories of licences issued by chamber of commerce. What's the minimum capital required to establish the trading establishment? With out Import Export licence what would be the minimum capital to be invested? |
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Joyce |
posted 22 August 2005 03:23 PM
You are not compulsory to have a local partner. The minimum registered capital for setting up a trading company with import export licence is RMB500,000. In China we call this type of company FICE (foreign invested in commercial enterprises). FICE can have the right of distribution in China and export commodities from Chinese market to overseas market. For more information you may contact me at joyce.jin@dezshira.com or visit our website at www.dezshira.com |
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Moderator |
posted 24 August 2005 11:01 AM
The TDC has provided a special feature on setting up a foreign invested enterprise in China and its application procedures. For details please click here. |
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Liam Fletcher |
posted 05 September 2005 06:47 PM
I would be happy to discuss these and related matters at your convenience. liam@chinawestinternational.net www.chinawestinternational.net |
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Jack Kanoi |
posted 07 October 2005 09:01 AM
Hi Rajesh, I am an Indian with a business background and am currently teaching in China. I have been in China for three years and have contacts in different areas. If you drop me a line at jackkanoi@yahoo.com, we can discuss how we can be associated. |
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Simon |
posted 04 July 2006 04:49 PM
The regulation of Set up a Trading company has been changed during the past 7 months. You could find the following link be helpful if you are planning to set up your business in Shanghai, China http://www.pathtochina.com/reg_wfoe.htm |
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name supplied |
posted 17 August 2006 11:00 AM
I am interested in setting up a trading WFOE in Shanghai. I want to have a license to import and export basic products and commodities into and out of China. I read that under the new Company law, minimum required capital for |
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Innovatize |
posted 18 August 2006 11:01 AM
There are two different issues to consider. First, the written regulations of the minimum amounts needed to be invested. Second the actual minimums in practice. I can tell you from my experience in Shanghai, the minimum is US$140,000 and ideally you should have more than this amount. Why? Because you will get approved much easier that way. If you use a lower figure, you will find a lot of government departments will not be very interested in your application. Especially the first "gatekeeper", the Foreign Economic people, will look very suspiciously at your feasibility study and reasonably question: How can you survive with so little money for set up, expenses, and working capital? Yes, you can explain how you are going to run a low-cost "virtual" business, but this will only make them more uneasy. The more you explain, the more you will appear to be an uncommitted middleman "no value added" company. I know you may have many arguments against this, but in the end, they make the decision nearly without discussing it with you. thomas at innovatize.com |
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sourcingright |
posted 18 August 2006 11:21 AM
To: Rajesh m Agarwal Joyce is right about FICE, but as I know for an FICE, if there is VAT refund, FICE can't apply for. It's a little troublesome. To: name supplied Actually it's not necessary to care about the registered capital. You For more information, you can contact me by sourcingright@gmail.com . |
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Jonathan Zhang |
posted 21 August 2006 10:59 AM
Rajesh m Agarwal, I am a lawyer in China. I agree with what Joyce said here. We can help you with all the famalities... www.ohiti.com |
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Niko |
posted 21 March 2007 02:05 PM
I'm willing to set up a trading company with the export and import licence. But I・m waver on where should i set it up, in HK or in china. If i set up it in HK, can i export goods directly from china via company has been set up in HK. If i cannot, what should i do to export goods directly from china. Besides that could you make clear the min capital to set up it in HK. Second. if i set up a trading company in china, where should i set up it and what are advantages from china Government and what is the realistic min. capital? After set up company in china, if unsuccessful then capital could be returned back? thanks in advance for your attention on above questions. Looking forward to hear from you in your earliest convenience. |
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Simon |
posted 22 March 2007 10:28 AM
Hi Niko, You will need a Trading Company which established in China to export goods directly from China to rest of the world. You can use an agent or ask your supplier in China to do the export matters if you only have a HK company. This HK company can be a 1 dollar company. With special arrangement, the exporter in China could send goods directly to destination instead of ship to HK first. For where to set up your China company, it's a quite open questions, normally the city that you start your business would be closed to most of your suppliers. For China & HK business registration our site provide a lot of detailed information, feel free to take a look of how to start your business in China: http://www.pathtochina.com/regcompany.htm Simon with Path To China. |
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Rebecca |
posted 22 March 2007 04:16 PM
Rajesh, If you open one trade company in a small size, I will suggest you to buy one company in HK and set up one representative office in China later. That・s easy and cost less. Your HK company is just a shell company and has no staff there. All your staff is in China office. One representative office in China is enough for you if you only want to do small trading business. If you think to open a company in China is great, I shall tell you the responsibility is also the great. Such as taxation, office expenditures, salary cost and risk will be much more than opening one representative office. For more details, you can contact with me : mar06.assistant@yahoo.com.cn |
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Brad |
posted 24 March 2007 10:39 AM
I have a company in HK already and am looking for the opportunity of I/E business in China. Can I engage in those ROs permitted activities if I don't set up RO in China? |
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Simon |
posted 27 March 2007 10:22 AM
Hi Brad, there a few things that you need to think about it before you commit to have RO function office. You may face following issues if you don't have a RO entity: 1. Hire Chinese staff. 2. Obtain Work permit. 3. Pay tax. 4. Rent Office You can't do that if you don't have any entities [WFOE, Joint Venture or Rep. Office] in China. simon with www.PathToChina.com |
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liberty |
posted 09 April 2007 10:00 AM
according to the New company law of China which took effect in 2006,the minimum registered capital of a Limited Liability company is reduced to 30.000 RMB. Or misinformed? |
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innovatize |
posted 10 April 2007 05:30 PM
The final decision on registered capital is made at the local level. The national "minimum" is just a guideline. Most "hot" areas require registered capital higher than the minimum. Not so hot areas will allow you to register your business in their area with the minimum capital. |
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Moderator |
posted 11 April 2007 05:11 PM
for Niko 21 Mar: First: You can set up a company in Hong Kong and conduct import and export trade from China with customers overseas. This is typical of Hong Kong as the regional distribution centre for goods that are partly sourced from the Chinese mainland and partly sourced from the region. Hong Kong・s strength as the regional distribution centre include chiefly its free-port status, excellent transport connectivity, and customs and cargo management efficiency. There is no minimum capital requirement in setting up a business in Hong Kong.
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liberty |
posted 17 April 2007 11:06 AM
innovatize:"" The final decision on registered capital is made at the local level. The national "minimum" is just a guideline. Most "hot" areas require registered capital higher than the minimum. "" If so, how can one figure out that at least how much fund local Authority will approve as registered capital? |
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innovatize |
posted 18 April 2007 09:08 AM
Liberty: You have to retain an experienced agent who can informally check with the approval authorities in advance. The agent will introduce your business plan in very general terms and then ask the government person, "Do you think $X registered capital would be sufficient to receive approval?". Although this does not give you 100% confirmation of ultimate approval, in almost all cases the government people will approve a project if they have unofficially pre-approved it in this way. thomas at innovatize.com |
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liberty |
posted 23 April 2007 09:50 AM
innovatize: Thanks for reply. i have one more question if you kindly answer. Contribution of registered capital must be in cash form, or some portion can be in non-cash form (such as "know-how") ? Another saying; lets think that our registered capital is 500000 but only 400000 is real money and other 100000 is against technical know-how .Is this acceptable by the laws? |
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innovatize |
posted 24 April 2007 10:13 AM
Yes, this is acceptable, but of course, it is a bit more tricky. The government will need some verification of the value of this non-cash investment, and that is tough to obtain in many cases. Again, this is something that the agent you select should pre-check with the authorities in advance of application. Thomas at innovatize.com |
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Dev |
posted 02 May 2007 10:51 AM
Hi, well I have similar intentions as with the author of this thread, I plan to export certain products from China to India. So, what I would like to know is that, is it possible for me to export goods to india without having to setup an office in china, and also whether I require to have a license to do so and what kind. Can I also have an agent in china to help me with the formalities? Any help on the matter would be greatly appreciated. |
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Moderator |
posted 23 May 2007 05:17 PM
For Dev: Yes you can do that provided you have already lined up the buyers in India and suppliers in China, and the product lines you would like to handle. Contact the suppliers and enquire whether they are able to quote and arrange direct delivery to India. If they don・t, try to locate someone else or appoint an agent or a forwarder to effect the transaction and other formalities. Licence is only required for a few product categories. Please check here for a special feature on the Guide to Doing Business in China for your reference. |
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Sonu |
posted 07 June 2007 10:42 AM
Dear Mr Rajesh, I think you have opened a company in hong kong then you move to china its easy way to get in china market. you may contact us. www.buttar.hk |
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Gary |
posted 11 June 2007 12:06 PM
I've been living and working in China for sometime. I have several buyers that I work with in the U.S. and provide sourcing, development and quality control. I do not have a "RO" office in China and basically work out of my apartment. In the past I've had my buyers open L/C's or other transaction forms directly with my China source. Is there a benefit/advantage for me to open a HK shell company and open a HK company bank account to handle the financial transactions such as L/C's myself and are there any other additional benefits for me to have a HK company considering the nature of my business? Thank you! |
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Shafayet Faruque Evan |
posted 16 June 2007 08:40 AM
Dear All, I am a Bangladesh citizen. I want to buy various goods from different shops and stuff it in a container and send to Bangladesh. As I will buy different things from different places so pls assume that my suppliers can't export. In this regards, if I want to receive L/C in Hong kong or in China and export the goods, what kinds of company I should open in China or in Hong Kong. How much capital I would require? If it・s difficult then I would like to open the company in the name of a chinese person, in that case what the capital requirement and how long it might take. |
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Moderator |
posted 26 June 2007 10:09 AM
for Gary 11 June: It would definitely be an advantage and more convenient for you to establish a company in Hong Kong to carry out your current business and financial transactions. Also for tax purpose most businesses are entitled to very generous deduction for depreciation allowances according to Hong Kong Inland Revenue Department. The loss if any can be carried forward to set off again future profits of your business. |
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Jennifer |
posted 05 July 2007 09:54 AM
I am in a similar situation. I stumbled upon this forum and hope to obtain some kind advice from you all. I have a company of my own. I intend to set up a representative office in China with import/export permit in order to export my products to China. Is it ideal? Must I have a chief representative stationed in China or may I be the representative and travel to China from time to time? |
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Rocky |
posted 05 July 2007 11:48 AM
Trading Wholly Owned Foreign Enterprise (WOFE), minimum capital RMB 0.5 m, where are some district may required more, imp/exp right apply after the business license granted, RO can・t apply imp/exp right. info@cphkltd.com |
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Rebecca |
posted 06 July 2007 11:35 AM
For Jennifer: Wrong understanding. Opening one representative office can not do the E&I yourself. But you can entrust the qualified E&I company to help you accomplish the procedures. One representative office can help you to know more information about the local market, I think. It is not necessary for the chief person to stay in the RO. Some RO engage the local persons to supervise the operation. For more details, contact with me: mar06.assistant@yahoo.com.cn |
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Moderator |
posted 09 July 2007 11:12 AM
for Shafayet Faruque Evan 16 June :There is no special requirement for you to set up a company in Hong Kong or China to order and consolidate the goods for delivery to Bangladesh. You can as an individual arrange the transaction through a forwarder or freight agent to handle the delivery. There is no minimum capital requirement for you to set up a company in Hong Kong. Please click here for application and procedures of setting up a company in Hong Kong. |
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Shafiq Ahmed |
posted 05 January 2008 03:29 PM
Dear Sir. I have a question. If I setup a company in HK and on the contrary I receive some T/T or L/C. But I want to transfer this T/T money to my china bank account and with this money I want to buy some goods and handover to a shipping line to ship out of china. My question is: 1. is there any limit for receiving money in chinese bank account? 2. If I open an offshore account of the HK company in China, then will it help me anyway? Thanks |
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Moderator |
posted 09 January 2008 05:38 PM
According to TDC Guide to Doing Business in China, non-resident individuals wishing to open a foreign exchange spot account should present the receipt or bank advice of foreign exchange inward remittance from abroad together with the original proof of the real identity to the bank. Non-resident individuals wishing to open a foreign currency cash account should present the original proof of their true identity to the bank if the amount of foreign exchange deposits in cash is equivalent to US$5000 or below per person per day. If the amount of foreign exchange deposits in cash exceeds the equivalent of US$5000 per person per day, the applicant should, in addition to proof of true identity, present to the bank the original declaration form for carrying such foreign currency cash in China and the original withdrawal slip for the amount from the overseas bank concerned. Please read more from the Guide to Doing Business in China on the subjects of foreign exchange control and enterprise financial and accounting systems. |
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Nancy |
posted 10 January 2008 03:42 PM
I think that if you set up a office of HK company in China, it will help you do what you want to. If you want to know more, please e-mail me. My mail is nancy@alphamac.cn I think I can offer you something important you need. |
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Robby |
posted 16 January 2008 10:16 AM
Reply to Moderator : 23 May 07 for Dev. If we use agent or a forwarder to effect the transaction and other formalities, is there going to be a fee / comission for them ? If there is, how much usually in percentage ? |
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Stephen Ying |
posted 18 January 2008 09:06 AM
reply to Robby, normally it will range from 2% to 5%, and wont over 5%. and if at 5%, normally the agent also will provide the sourcing service and quality inspect for you. |
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BJ |
posted 12 February 2008 11:11 AM
I am in the similar situation as Shafayet does (16 June 2007 post). Till now, my company has been using agent/forwarder service to export goods from china. Now I am thinking of becoming the agent/forwarder for my own company. What's the requirement to set up a company for this? Thanks in advance for the answers. |
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Raj |
posted 12 February 2008 11:14 AM
I am a Canadian, according to many people in this forum, suppose I opened a company in Hong Kong, and RO in China, as RO has a limited scope of operation within itself in China, (i.e. an Ro can only do Biz with its parent company) so How can I receive an LC from third party of Argentina in favor of RO account in China. Any one can help. |
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Moderator |
posted 13 February 2008 06:19 PM
for BJ: The TDC has provided a useful guide to doing business in China featuring information about setting up a wholly owned or joint equity/contractual company in the mainland, including application procedures and requirements. Please click here for detail. |
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