Guidance of Registration of Trade Businesses
Registration Requirements: none
Corporate Structure: flexible
Market Access: openness
Industries: trading, import or export businesses, if needed
Minimum Capital: 20,000 USD
Company Types: LLC, WFOE, INC
Process: 30 working days (business registration 20 workdays, plus import export permits 10 workdays).
Published by: SMEsChina.com
A Chinese trading business entity, refers specifically to the commercial activities managed by a corporation through purchasing, selling, supports of after sale, and other business activities to deal with daily transactions, orders. If you are deciding expanding product marketing in mainland China, as a trader you have to learn the procedure of opening a trading enterprise and related regulations through this guidance step by step.
Since 2019, a lot of policies on VAT tax, personal tax laws and corporate income tax published and implemented at the Chinese new year which is attracting more and more foreign traders, brokers and international organizations to bring their brands and creative products to the Mainland market. Whatever trading businesses you plan to establish here, you must have 2 conditions and requirements to understand, then can be approved to run businesses in China.
Hereinafter, you should collect and prepare these required documents to start a business in China. Trading companies can be approved to do domestic trading, international transactions ( importers and exporters ), and relevant post-sales services and technical assistance.
1st Condition, confirm registration information, must include:
- 1). Corporate structure, you have to decide who will be the shareholder(s), and who is the legal representative ( executive director ) and supervisor, shareholder(s) can be individuals or existed enterprises registered in other countries, legal representative and supervisor must be individuals ( one person cannot be appointed to both positions ).
- 2). Confirmation of information for your business registration, include registered capitals, shares and shareholders, business activities, commercial office address, secretary, accountant, this information can be confirmed and collected by online communications with SMEsChina depend on your decisions.
2nd Condition, prepare required documents to submit verification:
- Requirements of opening a trading company in China, you have to provide valid identification documents and submit to local market and supervision department ( known as: Industrial and commercial Administration Bureau ). Documents include legal notarized files for shareholder(s), legal representative and supervisor depending on your corporate structure.
Once you have already prepared these legal documents to identify their authenticity and legitimacy, wherever you are, you can start the process of company formation smoothly, comfortably and easily through SMEsChina’s assistance. ( Do not need to visit or interview personally ).
Processing of opening a Chinese business
There a few differences with consulting or services industries, a trading company needs an additional procedure to apply for the qualification of foreign trade and import and export licenses and permits to obtain an approval to operate international businesses and transactions. These extra programs need 10 workdays, plus the process of business setting up, total needs 30 working days through the 4 steps as following.
Step 1. Application for business registration
1). Approval name of corporation with both languages. Learning today: Naming Rules and Requirements of a China Company
2). Identify required documents. Learn more: Incorporation Requirements of Foreign Company
3). Obtain business license and company stamps.
4). Obtain certificate of registration of the foreign enterprises. Learn more: How to obtain a certificate of business incorporation
Step 2. Bank account opening
1). Identify legitimacy of the corporation, submit application forms.
2). Check the authenticity of legal representative and licensed files.
3). Obtain corporate bank account details, and internet banking.
Step 3. Tax registration and VAT
1). Registration of qualification of corporate taxpayer.
2). Publish VAT invoices machine and tax system.
3). Obtain a general taxpayer qualification ( VAT ).
Step 4. The Customs registration
1. Certificate of registration issued by the Customs.
2. Business certificate of international trading.
3. Import and export licenses and permits.
4. Electronic port IC cards and system, machine, known as: e-port system.
What mercantile activities and trading scope
A large amount of business activities can be written and submitted to obtain registration approval depending on your situations of the corporation. Whether you are engaged in domestic or international businesses ( or both ), you should choose an available and acceptable list of products and related after-sales services to submit in terms of New Policies of China foreign investment industrial guidance catalogue.
From our experience, you may select business scope from SMEsChina’s industrial guidance simply and quickly with this link How Selecting Business Scope ( you can list activities from our cross-industry selections ), but you have to understand the written rules, if you want to write the pen, paper as the list, you must list stationery or office supplies, in a similar way, if your trading company operates chips, coffee beans, chocolates, sausages, you should list the business scope as food. Why selecting main categories? Because it can choose and write more industrial selections and Chinese characters.
What is cross industrial selections: that means you can select different business activities from multiple industries. For example, you can choose mechanical and electrical equipment ( except for special equipment ), sales, installation, maintenance from selection 1, also can choose the advertisement design, production, agency, publication from selection 2, or other industrial selections.
What products need special permits: licensed permits include multiple industries, such as medical apparatus and instruments, medicine distribution, hazardous chemicals business, food business, alcohol sale, dairy products, manufacturing industry, precursor chemicals. Certainly, some service industries also need to apply for industrial permits include, cultural management, internet culture, pawnbroking, auction industry, entry and exit services, study abroad agency, tourist industry, catering services, transport and logistic, filmdom, radio and television programs and television drama production, printing industry, publishing industry, commercial performance institutions, etc.
Import permits, import licenses are the certificates of qualification of products importing issued by Ministry of Commerce of PRC, they are the valid documentations of the Customs clearance through licensing management and product supervision of import restrictions. Include 2 types, automatic import licensing and non-automatic import licensing in terms of the HS codes of the Customs.
Don’t worry, please. SMEsChina online consultants taking care of everything for your application of importing and exporting, if you have any troubles of selecting business activities, do not hesitate sharing to us please.
Extended Learning and studies
Naming rules, a trading company name must include the appropriate ending such as, Ltd, LLC, limited, etc. And must include registered region ( location of the market and supervision department ) and brand name, description of the industry. For example, you can make the corporate name as: SMEsChina ( Shanghai ) International Trading Ltd, or Shanghai SMEs Trade Limited, etc. The brand name should be made by yourself.
Electronic commerce, as a popular market and effective marketing approaches in mainland China, electronic online stores and platforms can help trading companies selling products faster than offline actual shops, and with cheaper investment to obtain local customers by convenient online payment tools. Learn more: How Launching Online Business
According to the China e-commerce report published by the Ministry of Commerce of the People’s Republic of China, department of electronic commerce an information. ( http://english.mofcom.gov.cn/ ), the scale of e-commerce transactions in China have reached 29.16 trillion in 2017 financial year and 40.6 billion packages delivered to global market with high-speed growth each year.
Registered address, besides of special supervised industries needs a physical office or an actual warehouse to apply for business registration, general industries can be approved to use a virtual registered address to obtain a business license and corporate account. Learn more: Reasons of Using a Virtual Address
Standard corporate structure, your domestic or international business can be as, WFOE ( wholly foreign owned enterprise ), FICE ( foreign invested commercial enterprise ), JV ( joint venture business ), LLP ( limited liability partnership ) or other structure of company depending on your structure of shareholder(s).
Investment Capital, you have to decide a registered capital to take responsibility for corporate limited liabilities. The minimum registered capital of a trading company is 20,000 USD or Euro. The corporation may transfer capital from shareholder’s account to Chinese company’s account within 30 years.
Source of revenue, a trading company can receive domestic payments, international business can make payments to oversea for purchasing activities and meanwhile can receive payments from foreign customers to operate export businesses.
VAT qualification, trading company can apply for 2 types of tax, one is a general taxpayer who can issue VAT invoices, another is small scale taxpayer can issue general invoices ( small scale taxpayer only can operate orders less than 5 million RMB each financial year ). 95% import and export companies selected VAT as general taxpayer due to the deduction of VAT of Purchasing ( known as: VAT refund ).
Taxing rules, Since 2019, China tax administration published a lot of preferential policies and new regulations of taxation, Specially for trading businesses and traditional service industries, VAT has reduced from 16% to 13%, corporate income tax ( profit tax ) has reduced from 25% to 5%.
Value-added services for trading enterprises
Trademarks and logo registration, in order to access the Chinese market smoothly, most foreign enterprises registered their Chinese trademarks to protect product property. Register a trademark is very simple through submitting logo with JPG, PEG and sign an application form with the corporate stamp ( seal ). Learn more: Benefits of Registering a Trademark , Documents Required for Trademark Registration
Bar codes, widely used in packages of product, instruction books and specifications. As an automatic identification technology appropriated for commodity circulation, bar codes include country of manufacture, name of commodity, date of manufacture, merchandise category, name of the importer. 2 most common types of code, ENA ( European Article Number ) and UPC ( Universal Product Code ).
Open an offline shop, physical store, once your company approved, you can open multiple actual shops in different cities and streets. Your offline shops will be approved as branches, subsidiaries under the parent enterprise.
How to apply for online platforms, like JD, Amazon, Tmall, AliExpress, Alibaba, Taobao and other online e-commerce, if your corporate license and bank account be obtained verifies, you can open online shops by these platforms and link an account to payment tools such as, Alipay and Wechat.
Other optional industrial guidance and reference
If you are hesitating that if this industrial guidance is right for your purpose, or you are considering other business plannings, if you wish, you may place an order to SMEsChina directly.
Get help deciding how to set up a business in China
SMEsChina offers a wide range of corporations services through the years of practical experience in areas of company formation, license application, tax consultation, annual audit, government inspection, virtual office services, human resources, secretarial services, corporate management strategies, residential visa, registration of bar-codes and trademarks, and other solutions of corporations running and maintaining to our global customers.
Ready to establish a trading business in mainland China?
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How to get started step by step
You can start the process of registering a trading company anytime, any places, if you have already prepared required documents above mentioned. Chinese company formation needs 20 working days, if you decide to form an international trading business, needs an additional process to obtain import and export licenses with 10 workdays.
With our professional guidance and assistance, you can open your own business comfortably and simply. Our all round services include business set up, strategy consultancy, and a series of subsequent operation services.