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Frequently Asked Questions
Wholly Foreign Owned Enterprises (WFOE)
A Wholly Foreign Owned Enterprise (WFOE) is a Limited Liability Company established in China by foreign investor(s). A WFOE is very much like a LLC in the USA that it requires one member only.
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The registration procedures of a Wholly Foreign Owned Enterprise (WFOE) could be divided into 3 phases: aproval phase, registration phase and post-establishment phase.
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A Wholly Foreign Owned Enterprise (WFOE) could be terminated by way of liquidation or deregistration by its investor(s) or when the conditions of termination in its Articles of Association occurs.
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China Taxation
Under the current tax system in China, there are 25 types of taxes which could be divided into 8 categories. The major ones are Business Tax, Value Added Tax and Enterprise Income Tax. More
Representative Offices are also liable for Business Tax and Enterprise Income Tax. However, a RO could be exempted if its parent company is in the manufacturing business.
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Any individual who has domicile in China or who has no domicile in China but has resided in China for one year or more shall pay Individual Income Tax on his world-wide income.
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CHINA FOREIGN INVESTMENTS
FIE REGISTRATION PROCEDURES


FIE Post-establishment Procedures
Entry & Exit Quarantine Inspection Administration

1. Import and Export Commodities Inspection

All the import and export commodities under "the Catalogue of Import and Export Commodities to be Implemented Statutory Inspection and Quarantine by the Entry and Exit Inspection and Quarantine Authorities" (hereunder called The Commodities Catalogue), as well as those stipulated by other laws and provisions, must be presented to the entry and exit inspection and quarantine authorities or their entrusted inspection organizations for statutory inspection. If the imported goods subject to statutory inspection have not been inspected, they are not allowed to be sold or used; if the export goods have not passed the inspection, they are not allowed to be exported. The contents of the statutory inspection of import and export goods include: quality, specification, quantity, weight, packaging, safety and sanitation, etc.

2. The Safety and Quality Permits for Imported Commodities

For the import of the Commodities that are highly concerned with safety, sanitation and environmental protection, the country implements the system of Safety and Quality Permits and has promulgated "the Catalogue of Import Commodities Subject to Safety and Quality Permits", so as to stipulate the general standards

3. Import Waste Materials Are Inspected before Loading

The import waste, which is allowed by the State to be used as materials, must be inspected before loading, so as to prevent harmful waste from transferring into our country. There are 10 kinds of commodities under such catalogue, such as waste paper, waste metals, waste plastics, and waste wooden products and waste textiles.

4. Export Commodities Quality Permit

The State implements the Quality Permit system for important export commodities. Commodities under such catalogue are not allowed to export before the issuance of their Quality Permits.

5. Supervision and Inspection of Food Hygiene

The hygiene of import food (including beverages, wines and sugar), food additives, food containers, packaging materials, food processing equipment and tools must be in accordance with the relevant laws and stipulations of the People's Republic Of China. The country implements the system of hygiene registration and recordation for the production, processing, warehousing and storing. All export food must be inspected. Food without inspection or can not pass the inspection is not allowed to export. All enterprises that engaged in the processing of export food, slaughter of cattle and birds and storage of food products within China must apply to the quarantine inspection authorities for registration and recordation.

6. Animal and plant quarantine inspection

In accordance with the laws, the quarantine inspection authorities implement statutory inspection to the following scope: entry, exit and transfer animals, plants and their products and other materials subject to quarantine and their containers, package and packaging materials, filling materials; vessels from infected areas; waste ships to be dismantled within China; and other goods and commodities, which are stipulated to be inspected by state laws, provisions, international treaties, and trade contacts and agreements.

The following imports are prohibited: animal or plant pathogens (including bacteria or poison), pest, and other harmful organisms; related animals, plants their products and other goods subject to inspection from infected countries and territories; animal corpses and soil.

The State implements the system of Entry Border Quarantine Inspection Permits. Prior application for inspection must be filed for the import of animal, animal products, plants, plant seeds, seedlings and other reproductive materials, the permits or approvals shall be obtained before the signing of the foreign trade contract or agreements. Quarantine inspection authorities will supervise over the production, processing, storage of the export animals, plants, animal and plant products, and other goods subject to inspection. When transporting animal and plants and their products and other goods subject to inspection to cross the borders, the owner shall report to the quarantine inspection authorities. Vessels from infected areas are subject to quarantine inspection and dis-infection on site of entry/exit ports.

7. Inspection of Transport Packaging of Export Goods

The transport packaging for the export goods under the "Commodities Catalogue" or stipulated by other laws and provisions shall be presented to the Quarantine and Inspection Authorities or their entrusted organizations for performance inspection. It is not allowed to use to package export goods if it is without inspection or cannot pass the inspection. Quality Permits are required for packaging of dangerous goods. Prior performance appraisal shall be made by the Quarantine and inspection Authorities before the production and use of the packaging for dangerous goods.

8. Appraisal of import and export Commodities

I. Appraisal of the quality, quantity, weight, and packaging of commodities and measurement of shipload;
II. Supervised loading and unloading of import and export commodities;
III. Appraisal of cargo plan, loss or damage, loading loss and sea loss;
IV. Appraisal of sea-worthiness of vessels of transport, such as ships, cars, airplanes and containers;
V. Batten-down, hatch, and space test of ships;
VI. Appraisal of containers and containerized cargo;
VII. Appraisal of the type, quality, quantity and loss of foreign-investment assets and property related to import and export commodities;
VIII. Selection and seal of samples;
IX. Issuance of value certificate and other appraisal certificates;
X. Other related appraisals.

9. Hygiene Quarantine

The entry and exit quarantine and inspection authorities are the competent authorities for the Hygiene Quarantine of the entry and exit persons, transport facilities, containers, luggage, cargo, package mail, etc., including medical examinations, hygiene examination and treatment.

10. C/O and Form A

The entry and exit quarantine and inspection authorities are also official organizations to issue Certificate of Origin (C/O) and the only official department to issue General Certificate of Origin (Form A). Export companies are welcome to apply to the local entry and exit quarantine and inspection authorities for the certificates.

11. Verification and Supervision on the Foreign-Invested Organizations for Inspection, Appraisal and Authentication

Sino-foreign joint ventures and Sino-foreign cooperative ventures to be set up to conduct import and export commodities inspection, and appraisal and authorization business shall submit their qualifications, credits, technology strength, equipment and the scope of business to the entry and exit quarantine ant inspection authorities for verification and examination. The authorities will issue "the Opinions on the Qualification of the Foreign-Invested Inspection Companies", which will be sent to the departments of foreign trade and economic cooperation for approval. After the ventures complete industrial and commercial registration and get the business license, they shall return to the entry and exit quarantine and inspection authorities for the grant of "the Verification Certificate on the Qualification of the Foreign-Invested Inspection Companies" before they conduct operations.

Hong Kong Head Office              Room 803, Futura Plaza, 111 How Ming Street, Kwun Tong, Hong Kong
                                                 TEL +852 2341 1444      FAX +852 2341 1414      E-mail info@bycpa.com

Shenzhen Office   TEL +86 (0755) 82684480 82684483 82684484 FAX +86 (0755) 82684481
Shanghai Office   TEL +86 (021) 64394114 64399276 FAX +86 (021) 64394414
Beijing Office   TEL +86 (010) 68748420 68748422    FAX +86 (010) 68748421  

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