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| Q: |
Can I establish a "two-Yuan" company in China?
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| A: |
It's not permitted to establish "two-Yuan" companies in China.
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| Q: |
What's the minimum registered capital of Chinese company stated by the PRC Company Law?
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| A: |
According to PRC Company Law, a limited liability company's registered capital shall not less than the following minimum amount:
| Companies engaging in production and operation |
RMB 500,000
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| Companies engaging in commercial wholesale |
RMB 500,000
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| Companies engaging in commercial retail |
RMB 300,000
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| Companies engaging in scientific and technological development and consulting service |
RMB 100,000
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| Companies limited by shares |
RMB 10,000,000
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| Listed companies |
RMB 50,000,000
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| Q: |
What are the investment vehicles commonly used in China according to the Foreign Investment Laws?
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| A: |
Investment vehicles commonly used in China are Sino-foreign equity joint ventures (EJV); co-operative (or contractual) joint ventures (CJV); wholly foreign-owned enterprises (WFOE); joint stock companies; holding companies; representative offices (RO); assembling and processing contracts (APC), and branches. Among these vehicles, RO’s, APCs and branches are not separate legal entities. Under China’s WTO and CEPA commitments, wholly foreign-owned enterprises are permitted in more and more industries.
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| Q: |
What's the minimum registered capital of Foreign Investment Enterprise under the CEPA?
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| A: |
The minimum registered capital for Foreign Investment Enterprise (FIE) is different from one industry to another. According to “the Administration Measure for Foreign Investment in Commercial Sector”, the minimum registered capital amounts are substantially reduced. For instance, the minimum registered capital requirement for a wholesaling enterprise is RMB 500,000 and for a retailing enterprise is RMB 300,000. (possible reduction subject to further legislation)
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| Q: |
What are the procedures to establish a Foreign Investment Enterprise (including EJV, CJV and WFOE) in Mainland?
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| A: |
| 1. |
The following documents shall be provided to the Ministry of Commerce or provincial commerce departments.
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| 2. |
| (a) |
Application form for establishment of a Foreign Investment Enterprise;
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| (b) |
Feasibility research report compiled by all partie(s) to the Foreign Investment Enterprise;
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| (c) |
Contract, articles of association (for a foreign-funded commercial enterprise, only the articles of association should be submitted) and the attachment;
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| (d) |
Bank credit certificates of all investors, registration certificate, certificate of the legal representative, if the foreign investor is an individual, his/her identity certificate shall be provided;
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| (e) |
The audit report of all investors in the recent one year, which is audited by accountant firms;
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| (f) |
The evaluation report on state-owned assets invested into the sino- equity joint venture or contractual joint venture commercial enterprises by Chinese investors;
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| (g) |
Name list of the members of the board of directors of the planned foreign-funded enterprise and the power of attorney for directors of each investor;
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| (h) |
Notice of pre-approval of the enterprise name as issued by the administrative department for industry and commerce; and
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| (i) |
The certificate documents of the use right of the land used for the planned enterprise.
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| 3. |
Any examining and approving authority shall, within three months as of the date of receipt of all documents above, decide whether to approve an application or disapprove them. If it approves the establishment, the Certificate of Approval for Foreign-funded Enterprises shall be issued; if it does not approve it, the reasons thereof shall be explained.
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| 4. |
The investors shall, within one month after receiving the certificate of approval, go through the registration formalities at the administrative department for industry and commerce upon the Certificate of Approval for Foreign-funded Enterprises.
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| Q: |
How can Hong Kong and Macao permanent residents set up individual business in Guangdong Province?
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| A: |
To establish individual business in Guangdong province, the following documents shall be provided:
| 1. |
Application form for establishment of individual business;
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| 2. |
Identity Card/Passport/China Entry Permit of Hong Kong or Macao permanent residents;
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| 3. |
Approved certificate documents for Identity Card/Passport/China Entry Permit of Hong Kong or Macao permanent residents issued by China Appointed Attesting Officer;
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| 4. |
The certificate documents of the use right of the land used for the planned enterprise (the business areas shall not exceed 300 square meters); and
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| 5. |
Notice of pre-approval of the business name.
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Any examining and approving authority shall, within five days as of the date of receipt of all documents above, decide whether to approve an application or disapprove them. |
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N.B. Please note that our firm is not qualified to practice or to advise on non-Hong Kong legal matters. The aforesaid information consists of facts or matters elicited from public sources. While every care is exercised to ensure that the aforesaid information is accurate and accords with up-dated PRC law and policy, no warranty or guarantee is given from our firm for the same. You are advised to seek independent legal advice from practicing PRC lawyers on the matters mentioned herein before making any decisions or embarking on any correspondent actions. Our firm accepts no liability whatsoever for matters mentioned herein or matters in relation herewith.
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