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China Rebounds Following Two Month Fight with Coronavirus, incorpchina, incorp china

China Rebounds After Two Month Fight Against Coronavirus

Just recently on March 19th Wuhan reported the first day of receiving no new cases. While there are still strict measures in place to prevent further spread of the Covid-19, the Coronavirus, the country has already begun shifting back into the regular flow of business. Companies are opening up, people are going to work, and life is beginning to go back to normal.

With this upturn and people going back to work, we’ve opened our offices again and have started consulting our clients in handling the economic strain caused by the Coronavirus in China. Getting back into the usual way of business after the outbreak has had its ups and downs. Especially for our company, consulting our clients on how to best deal with it has been quite a challenge but we’ve enjoyed it none the less. We’ve had a meeting already with the tax bureau and many reopening businesses.

This trend is echoed throughout the country, and after a two-month-long battle against the virus, the economy is beginning to turn back up and rise again.  Of course, the Chinese government hasn’t said the virus is beaten, for that, they’re waiting until at least two weeks have passed with no new reported cases, but overall, this is good news for businesses, the economy, and those looking to start work in China.

The cities with the highest turnaround are the coastal cities and those farther away from Wuhan, cities such as Shenzhen and Guangzhou. The measures taken by the Chinese government really demonstrate how efficiently the Chinese government has handled the outbreak. The measures are taken, temporarily sacrificing economic growth to combat the outbreak, which is another tough choice soon to be faced by the United States and other countries newly coming into contact with the virus. The following weeks will be vital in combating the virus.

If you need help with getting started again in china don’t hesitate to call us!

Guan xi, guanxi, business in china

Setting up a WOFE in China

Starting a business in China is an incredibly fascinating venture, with a bulging and aging population and greater demand for a better quality of life, there are new markets emerging in China across all sectors.

A WFOE is a Wholly Foreign Owned Enterprise. This is a limited liability company which is owned entirely by a foreign company or individual. There are many advantages of owning a Chinese WOFE, including:

  • Absolute control over business decisions
  • Ability to hire and fire staff
  • Can invoice Chinese clients in RMB
  • Ability to convert profits from RMB to US dollars for remittance to parent company overseas
  • Protection over intellectual property
  • Full control of human resources
  • Independence
  • You retain all profits

Depending on the type of WFOE you register it allows the company to do Trading, Wholesale, Retail, import/export or Franchise in China

When applying for a WFOE, you are actually applying for approval, not registration. This is because the local governments operate on an approval-based system, meaning they can reject your application with no further explanation or contact. This is why it is important to have all the correct documents and prepare.

The main things you need to consider and prepare for your WFOE application are as follows:

Name

You must provide us with several alternate company names both in English and Chinese. We will then prepare and submit the application documents to the Municipal Government Administration Bureau of Industry and Commerce. There are some restrictions on your company name, and we will liaise with you to create a compliant and compelling name.

Project Feasibility Report

An important aspect of your WFOE application is your project feasibility report, which includes your business scope, business development plan and details of your registered capital.  You must ensure all business activity remains within this approved business scope. Business Scope includes, but is not restricted to: WFOE’s activities, products/services provided, 5-year plan, staffing, balance sheets, job descriptions etc. It is important to operate within your business scope and the sanctions for those caught doing business outside of their scope are heavy. If the dynamic of your business changes, and so to your business scope, you must reapply for a WFOE. 

When setting up a WOFE, you must specify what type of company you would like it to be, and this must be consistent with your business scope. Three main categories are Manufacturing, Trading and Consultancy. Although the Chinese government allows for a little leniency regarding your business type, if you were to drastically change the dynamic of your company and the goods/services you provide, you would require further application and approval.

Articles of Association

A minimum of one shareholder is required, this may be an individual or a company, and the relevant documents authenticated. If they are an individual investor, then their original passport will need to be checked by Chinese government offices and authenticated. If it is a company applying, then its official businesses licenses and Article of Association must be authenticated by a Chinese consulate. Once you provide us with your ownership structure, we can request the relevant documents and send them for authentication.

The timescale for setting up a WFOE can be varied. Here at IncorpChina, we have registered a sole investor WFOE for a client in the pharmaceuticals industry in just one day! Typically, however, it can take up to 40 days. At IncorpChina, we have close relationships with government officials and a comprehensive network of experts who are experienced in applying for WFOE’s. This significantly reduces the time taken to register your business.

Registered Capital

As of 1st March 2014, according to new PRC business registration regulations, there are no regulations on how much an investor should invest in capital, or when they should inject it into the company. This is an encouraging policy; it has been introduced to encourage foreign investment into mainland China. This gives investors greater flexibility on their investment and saves them investing large sums of money early on to remain compliant. Obviously, capital should be registered, and the actual figure will depend entirely on the host companies plan and vision.

The registered capital can be paid in full all at once (or within 6 months after the date of issuance of the company’s business license) or paid in several instalments within 30 years of its operational span. Each instalment of registered capital requires a capital verification report, which includes bank confirmation of capital receipt and a CPA’s formal Capital Verification Report. This costs 4000RMB per instalment. For this reason, we advise to pay the capital in one or two instalments to minimize handling charges.

Lease Confirmation

It is a legal requirement for any WFOE to have a formal business address where correspondence from the Chinese government can be sent and business can be conducted. The lease conformation contract is a mandatory document required in the application of your business license. At IncorpChina, we assist with clients looking for offices to lease.

3 in 1 Business License

Once the approval certificate is received, an application for business license can be submitted for FICE to the Administration Bureau of Industry and Commerce. This 3 in 1 business license combines license, organization code and tax certificate.

Carving Chops

A company chop is the Chinese equivalent of a signature, only it has greater authority and validates contracts and documents. It is a legal requirement for a Chinese company to own its own company, finance and personal chops, and you can collect these from a local police station.

In addition to the required documents and items stated above, companies are required to undergo further registration and apply for further certificates. This process can get very bureaucratic and lengthy. However, at IncorpChina, we have an experienced team of specialists who have applied for over 50 WFOE’s, with a 100% success rate. We have frequent contact with government officials so we can get your Chinese entity registered quickly and effectively.

Want advice regarding your expansion into the Chinese markets? Send us a message through the livechat feature on the right of our page, or alternatively, call us on our landline!

ICP Licensing: How to Start Your Chinese Business off Strong

Promising untapped markets are emerging all over China. As companies race to break into the new business climate, ICP Licensing is in growing demand. With rules and regulations constantly changing, and an overwhelming amount of Chinese paperwork, the registration process can get confusing. Nevertheless, completing this step is a fundamental part of your successful game plan, and we’re here to help.

In this article, we’ve created an all-you-need-to-know-guide on how to properly establish a competitive web presence in any mainland region.

Beware: This is a fragile and crucial part of your company’s success. The process is not to be taken lightly, although there are certain service providers out there who treat it so in order to make a quick buck or yuan. Pay attention to the points provided and we will teach you how to do it right.

First things first:

As in all Chinese business, cultivating strong relationships is step one. Registering your license involves proving to the government that your intentions are pure, that your site is worthy of hosting, and that you can operate within the boundaries of Chinese law.

No book or website can fully prepare you for this process. Sure you can google a nice flowchart, but the business culture in the east is rooted in a social system more delicate than any western country.

Certain steps absolutely require a Chinese contact. For example, certain user registrations require an input on SMS verification codes which only send to China-based numbers. Furthermore, not all registration sites accept international payment methods.

As your documents are filled out and translated from region to region, a trusted cultural insider will quickly become your most valuable research tool.

See why Incorp China is the right relationship for you here.

Now, let’s get specific…

What is an ICP License?

An ICP (Internet Content Provider) License is a permit, applicable to legally registered companies, issued by the MIIT (Chinese Ministry of Industry and Information Technology) that permits websites to operate in China. It is a key piece in your site going live, one between purchasing a hosting and creating your domain.

Does every business need an ICP License?

If your goal is to launch a website using a server hosted in China or on a Chinese content delivery network, an ICP License is mandatory.

However, say you are a US company hosting your website in America. The Chinese consumer is merely a fraction of your target market. Is it possible for your website to function, for Chinese consumers to view your content without an ICP License?

The answer is yes, but anticipate firewall blockage and don’t expect a fast-loading website.

Note: In Hong Kong, thanks to a more western style set of laws, entering the online playing field can be a smoother process.

Learn more about the benefits of opening your company in Hong Kong here.

Which ICP License is right for my business?

There are two types:

1. Commercial License

A commercial license is for companies offering goods or services to customers chiefly online. Its parameters are strict and swift:

• Commercial ICPs are almost never issued to companies with any foreign investment.
• Therefore, you must be a completely Chinese-owned business.

2. Bei An (Filing) License

The ICP Bei An license is the standard license, available to foreign-owned entities: Representative Offices (RO), Joint Ventures (JV), or Wholly Foreign Owned Enterprises (WOFE). All mainland China hosted sites must obtain one before they begin any business online.

Given that our company assists non-Chinese businesses in entering the market, this is the license we will focus on.

How do I get an ICP Bei An License:

Within the category of Bei An licenses, there are two ways to go:

A. Proxy Process

This is the only option for companies that do not have a physical entity present in the country. It allows you to nominate a locally-registered Chinese company to hold the domain for you as a proxy.

With this plan, you take on additional risk. Because you are linked with entities other than your own, if the proxy becomes blocked for any reason, it’s game over for everyone with no way back in.

B. Direct Process

This plan ensures the highest possible control over your site. The process is slightly longer, but ultimately worth it for companies serious about their Chinese presence.

When a client needs this license, here’s what happens in flow chat form followed by a more clear explanation:

Chinese ICp licensing process, ICP License,

• We translate and submit the required documents to your web provider
– In review, additional documents may be required
– When approved, your provider sends the documents to MIIT

• MIIT reviews your ICP license application documents
– When approved, we will be notified via our Chinese phone number
– Within twenty days, you will have received a registration number

• We apply for a PSB (Public Security Bureau) ICP Filing
– We have thirty days to apply after receiving the number
– Once again, the documents must be submitted in Chinese

• We submit the documents to start accessing China-based web services
– With the license, you can now purchase hosting and CDN services
– Finally, you are able to register for a .cn domain

Note: Failure to keep the information you submitted to MIIT up-to-date can result in fines or complete cancellation of your ICP license.

Once your site is up and running, the license numbers will be displayed in the website footer.  Check out this example:

ICP Licensing footnote example picture Michael Korswww.michaelkors.cn

At this point, local competition knows you are serious about your sales and ready to compete. Your fast-loading website will keep customers around and partners engaged, and all the paperwork will be worth it.

Ready to get started? Call now for a consultation with an IncorpChina team member, and establish your most important relationship in China success. +1 561 729 6508 | [email protected]

#icplicensing #businessinchina #chinesemarket

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business registration in china

The Transformational Trend: Why China is the place to be and how to start your business there

Why bring your business to China?

The future of China’s economy has never looked this bright. With a thriving middle class, a new wide-spread consumerist approach to spending, and increasing liberalization, China is now home to a wide variety of promising untapped markets.

Since the late 1980s and 1990s, China’s economy has been executing significant reform to the state-owned industry. Upon the passage of The Company Law in 1993, limited liability companies were approved, and firms were able to retain a share of their profits. As a result, private ownership increased rapidly. By 2005 it accounted for about 70% of China’s gross domestic product.

Among reforms, China established an unprecedented manufacturing presence as a result of highly competitive pricing and sheer production power. After dominating our global economy as the world’s largest exporter of goods since 2009, China’s focus now shifts from expansion to stability, that is back to service and consumption.

Amidst all this economic activity, China’s middle class has boomed. With a current urban population of around 800 million people, that is only going to grow, 54% percent are expected to be the upper-middle class by 2022.
Take a look:

China’s Middle Class as Percent of Urban Households, doing business in china

At this point, the economy’s growth has slowed. However, China is still ahead of their goal to double GDP between 2010 and 2020 and more industries are open to investment than ever before.
See below China’s GDP yearly growth since 2008 and China’s GDP annual growth rate over the last four years, respectively:

 

 

 

 

 

Even with a declining growth rate, China’s economy is still expanding at a rate three times higher than that of the US.

This is merely the start of China’s rebalancing. Economic prosperity is spreading as wages rise and workers demand better treatment. Furthermore, the quality of life is improving thanks to upgrades in transportation, health standards, and a wealth of technological advancements.

Increased opportunity and success is leading to higher disposable incomes and ideal target markets as the new Chinese consumer emerges, ready to spend. See below China’s consumer spending trend over the last ten years:

 

 

What is driving the Chinese consumer? Markets dealing with luxury items and services are bursting with opportunity and demand.

Interest continues to increase in:
• technological products
• luxury brands
• cosmetics
• nutritional care
• trendy foods
• high-quality goods
• entertainment
• travel

Get specific: See why Hong Kong is a great place to start

“The time is now. Be part of the process as China becomes tomorrow’s economic powerhouse.”
Ready to expand your business and break into China’s upcoming markets? Call now for a consultation with an IncorpChina team member, and establish your most important relationship in China success. +1 561 729 6508 | [email protected]
#chinesebusiness #chineseculture #whychina #chineseindustry #RO #JV #WOFE #chineseeconomy #GDP #thenewconsumer #culturaldifferences #chinesemarket #economictrends #AIC

10 steps to authenticate your U.S. documents to be used in China

This might be something you have not given a whole lot of thought in the past. However, Chinese authentication of US documents is required with almost every application process you will encounter on the road of opening your own China business entity. Registration of an entity in China requires documentation preparation in the US and China. We will help you with documentation preparation in both the US and China saving you time and money. Having your American documents authenticated by the Chinese Consulate means they have passed the official screening to be used in China.

Failing to prepare your foreign documents may result in the delay or refusal of your applications. Here’s a guide on how you can complete this initial process in ten steps:

1. Identify documents

At first, you will need to select the documents that need legalization and clarify who is the legal representative/applicant for the company.

2. Notarization

There are some instances in which the US documents need to be notarized. In this case, we have a specialized legal services providers network to help you in completing this step easily.

3. Fill out document authentication form

Your legal representative/applicant (as defined in step one) now has to fill out and sign the Chinese application for document authentication. Because forms may vary, depending on in which state you want to apply for US document authentication, visit the respective state’s Chinese consulate website to find the correct form.

For the New York China consulate, e.g. you can find the document here: http://newyork.china-consulate.org/chn/fwzc/cgbg/P020171201186551196801.pdf

(Leave section 1 and 7 blank. Have legal representative/applicant sign twice in section 8 (top and bottom). We fill out section 7 and sign as the agent in section 8.)

4. Compile supporting documents

The next step is to obtain a copy of the following supporting documents:

  • The legal representative’s/applicant’s passport
  • Company’s certificate of existence and good standing
  • Articles of incorporation

5. Submit the documents

Submit the documents that need to be legalized by the State Department or Secretary of State to be certified. Some states require to authenticate the documents through the county’s clerk office before submitting them to the State Department or Secretary of State, so be sure to check.

6. Keep a record

Once the documents are certified by the State Department (and possibly the county clerk’s office) make a photocopy of them for your own records as well as the next step.

7. Submit the docs to the Consulate

Go to the Chinese consulate or embassy and submit the originals as well as the photocopies of the certified documents along with the application for the authentication and supporting documents.

8. Get a receipt

The consulate will issue a receipt with the total owed and the pick-up date for your documents.

9. Collect your authenticated documents

Return on the pick-up date with the receipt, pay the amount owed and process to then collect your authenticated documents.

10. Verify that all the documents have been authenticated

Once you’ve completed all the steps above, verify that all your documents have been authenticated. In case we have completed this process for you, we would then ship the authenticated documents back to you, our client, or wherever you want them shipped.

 

If you have any questions or would like to get a free consultation from us, simply email [email protected] or call +1 (561) 729 6508.

Like what you read?

Continue with 7 Benefits of Opening Up a Company in Hong Kong:

 

Trademark Application in china, Trademark Application,chinese Trademark Application

Breaking Down The Trademark Application Process in China

Everybody is familiar with the fundamental concept of trademarks. You have an idea or name and want to protect this intellectual property from being copied or claimed by someone else.

The process

In simplified terms, in China, this process takes about four steps.

  1. Do your research. It is advised to do a Trademark Pre-Filing Search. You can hire an agent via Incorp China to check with the China Trademark Registration Office whether the trademark you are about to register has already been applied for by another entity. If this is the case your application would be rejected immediately were you still to go forward with your application.
  2. Prepare the paperwork and choose a classification for your trademark.
    Your trademark can include anything from words, designs, letters, numerals, 3D symbols and graphics and even a combination of colors. Do stay clear of city names as well as words and family names with political history. There are several classifications that your trademark can be filed under.
  3. Submit the trademark application and wait for the result of the initial review. Once your application is approved you will receive a Notice of Acceptance.
  4. The Notice of Acceptance will be issued in a newsletter referred to as the Gazette for three months. As long as the China Trademark Registration Office does not receive any objections during this period, your application is not rejected and the trademark will be granted.

As you can tell, the Chinese trademark application process is not too different from that of the US. While, however, according to the International Trademark Association (INTA) in the US “over 95 percent of trademark applications are filed electronically”, in China it is highly beneficial to file your paperwork via an agent. As a foreigner, your paperwork will likely not be prioritized. Furthermore, having a native Chinese agent fill out and check your paperwork will mean there will be a significantly lower chance of making an error. If you were to make an error your paperwork would be rejected and you may not be refunded the application fees.

Thankfully Incorp China offers a free consultation. Let us help you. Call us (+1 (561) 729 6508) or email us ([email protected]) and we will be happy to answer any questions. Incorp China is backed by a team of fantastic lawyers who have filed for hundreds of trademark applications.

Liked what you read? Read about our top 6 tips you need to know if you want to file for a trademark in China

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