Tag Archive money

China, Shenzhen, WOFE, business, bank, money

How to save money and time through effective negotiations.

Without any discussion, money and time are the most valued resource for business. For western companies, traveling to china can be an investment due to the utilization of this two resources. Think about the costs of traveling, lodge, transportation, and the time spent on meetings or any process like registration and permits application. This case is about how one of our clients has saved through our effective negotiations.

Paperwork is expensive

In this case we are not talking about the fees involved to get paperwork filled out and submitted to register a WOFE. We are talking about the clients’ travelling expenses to personally sign the documents in order to get them approved.

Thinking outside the box

It just so happened that a US client of ours, a jewellery manufacturer, had to fly to China for business reasons unrelated to us. While his WOFE application was pending and his licenses were being processed, the company did not officially exist yet in China. However, Incorp China believes in seizing opportunities. Since the client was already on the ground we decided to visit a local bank branch who we frequently work with. Could we open up a bank account for the soon-to-be company  saving the jewellery manufacturer the fare for a second trip across the world?

Patience and persistence

Usually it is absolutely impossible (even as a local Chinese) to get a bank account opened without the corresponding business license. With our local Chinese staff and a lot of patience, networking and preparation we were able to convince them how detrimental it is to this business to sign the required legal documents for a bank account right away. The bank account would be pending the readiness of the business license and tax certificate and be officially opened once both the WOFE business license and the tax certificate were approved.

If your company needs to get a service done quick, we will give it our best to deliver – just because, against all odds, it sometimes actually works. In this case we saved our client a few thousand US Dollars and a lot of personal time.

Read more about how we solve problems opening up bank accounts for foreigners

Convinced? Then take advantage of a free consultation! Call us today: +1 (561) 729 6508

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Opening Up a Bank Account in China, credit card, Opening Up a Bank Account Under Tightened Restrictions - What You Need to Know

Opening Up a Bank Account Under Tightened Restrictions – What You Need to Know

Why opening a bank account in China is more difficult today

It is no secret that the recent crackdown on money laundering has left foreigners struggling to open a bank account in China. As a result, it has become even more beneficial for foreigners, seeking to move or extend their business to China, to consult an agent on the ground. The reason why there are so many China consultancies on the market is because it’ is quite challenging as well as time and labor intensive to get a company approved. Only a few of these China consultants are as committed as Incorp China, connecting with the government bureaus and banks, forming friendships, and therefore getting our clients the service they deserve.

Going beyond obvious

One of our most recent clients, a US software security company, had to open up a bank account after his company license had been approved. In order to do just that, our team went to one of the bigger China Construction Bank (CCB) branches located not too far from our office. Unfortunately, since banks had tightened their requirements over the past couple of months, our first request was denied. Why, is open for speculation.

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The China Construction Bank is one of the ‘big four’ banks in China – and one of the 10 largest banks in the world by revenue.

As Robert Fisch, Incorp China’s CEO did not want our client to have to fly back to China in order to give it another try at another bank, he went into the branch again with two members of his team. At the CCB branch, he found the employee who had refused our application, talked to her, and tried to find out why our client got refused and what we could do to fix it. When this did not work out, he managed to find the account manager.

The account manager, respectful and courteous as the Chinese treat their guests, offered us tea and his time in the staff kitchen. There, the Incorp China team and he talked, tea, took pictures and we each showed interest in each others’ jobs, cultures, and languages. After a while, the account manager promised to help us in every way he could, but that he would first need to get approval from the branch manager. She, luckily, was on site this day.

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The account manager was incredibly friendly and helpful and introduced us to the branch manager, who agreed to see us immediately. Again, the Incorp team were offered tea, we talked in the CCB branch manager’s office about this and that – starting with small talk but ending up talking about family, the beauty of China and how rapidly it has evolved in the past decades. The manager did not, however, clearly state how she was going to help us, despite being very friendly and enthusiastic about our visit. Nevertheless, she did make sure to let us know that she wanted to assist us in the process.

When we went to visit the branch a second time, the mood was slightly more dampened and the odds did not look like they were in our favor. Even a long meeting, talking about all the technicalities of the bank account opening procedure, did not change or clarify anything.

Unfortunately, for the following couple of days, there was honestly more confusion than progress. Nobody could really tell us what had gone wrong, what we needed to do to get the process going, or whether, in the end, they couldn’t do anything for us at all.

Therefore, our CEO headed back into the branch and had a meeting with all managers he could find on site together. After, yet again, some tea and chatter, the situation looked a lot better. We finally got a hint of what had gone wrong, and after ensuring the team at the bank branch that we would love to bring them more business, they understood that we were as serious about the legislations as they are. They agreed to restart the bank account opening process all over again – a clean slate – without the head of the client’s company having to travel to China again.

It’s all about client support

While this was time-consuming for our team, it got us connected with the CCB branch team near us, taught us yet another lesson about China’s bank requirements, and reminded us that with friendliness, patience, and a true passion for our field, every problem can be resolved. We are thankful for all of the China Construction Bank team’s time and effort and their dedication to their clients. Even more so we are proud to have resolved this issue for our clients and helped them to the best of our ability.

The trick to why all of these meetings with the managers of the bank’s branch where possible, and ultimately why they listened to us, was for Incorp China’s boss to speak Mandarin fluently. His China experience, consisting of well over 30 years and counting, gave us the insight into what is and what isn’t possible in such delicate situations, and, perhaps more importantly, displayed the legitimacy and seriousness of our business. It showed that Incorp China is helping both Western companies as much as the Chinese economy by bringing them here. We have been here for a long time and are intending to stay. This feeling of stability combined with our China knowledge has helped us more than once in negotiating a great deal for our clients.

Therefore, it is truly important and money well invested to have somebody on the ground in China who can provide this support to your business.

If you are currently looking into expanding or moving your business to China, let us do your paperwork for you so you can fully concentrate on your business. Call us for a free consultation today at +1 (561) 729 6508, or write us an email at info@incorpchina.com. We are looking forward to hearing from you.

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The New Fapiao Legislation Explained

Effective 1st July 2017, the State Administration of Taxation extended its requirements for fapiao issuance. All companies need to add their taxpayer identification number on all issued VAT tax invoices (fapiaos) in addition to the original information. The notice was given under the Taxation Notice No. 16 of 2017.. 16 of 2017.

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A sample of a VAT tax rebate receipt (fapiao).

 

What does this mean? Why?

Originally, a fapiao only had to include four components. The paying company’s name, its company address, a description of the good or service being sold as well as its price, and the government issued red stamp. The latest regulation entails that those receiving the receipt have to provide their company’s unique taxpayer identification number in addition to the original requirements. This law, at first, only applied to VAT fapiaos that were intended for tax deducing purposes. Now, however, it includes all normal VAT fapiaos as well. This adjustment in the legislation is supposed to aid the Chinese government in tracking a company’s exact income and expenses in an effort to eliminate tax fraud.

How to find out your taxpayer ID number?

To find out what your company’s taxpayer identification number is, have a look at your business license. Every company receives a unique taxpayer ID number upon registration for tax filing purposes. In case you are the owner of multiple different companies, you will have received a separate taxpayer ID number for each.

 

Are individuals attributed a taxpayer ID number?

No, only companies receive a taxpayer ID number upon their registration.

 

What should you do?

Incorp China advises all its customers to have a physical or digital note on them clearly stating the company’s name as well as the taxpayer identification number. Having this information both in English and pinyin will make fapiao issuance as easy and hassle-free as possible. The new taxpayer number has to be filled into the line located right underneath the company’s name. Every time you ask for the issuance of a fapiao, please double-check whether the taxpayer identification number has been included and whether it is correct. If either isn’t the case you will not be able to record the fapiao in your accounting books. This means you will not be able to deduct the fapiao’s value from your taxes.

 

 

If you have any further questions or concerns, please call us under +1 (561) 729 6508 or write us an email at info@incorpchina.com.

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China, money, Yuan, Renminbi, bank, currency, economics, market, growth, legislation, law, change of law, change of legislation, security, opening up business, WOFE, FICE

How Important Is To Have Local Representatives In China?

While every business needs to keep a tight grip on their expenses, some investments do truly pay off. One of such investments is hiring a local company in China to represent your business here. Why? Because Chinese bureaucracy and law is of complicated and ever-changing nature. Even more importantly, here, nobody stands a chance doing paperwork over the phone. Doing business face-to-face remains the most effective and respectful after all.

Incorp China was just retained by a Human Resource company based in the US to register their consulting WOFE (Wholly Owned Foreign Enterprise) in China. As part of establishing a WOFE, the company is required to own a bank account at a Chinese bank. Until the recent crack down on money laundering by the central government, representatives were able to open up bank accounts on behalf of their clients as long as an attorney was present.

china local representatives,China, money, Yuan, Renminbi, bank, currency, economics, market, growth, legislation, law, change of law, change of legislation, security, opening up business, WOFE, FICE,incorpchina, incorp chinaNow, however, the client himself has to make the request personally, which is not only a time intensive procedure but often impossible, as our clients tend to be based overseas. This issue doesn’t just affect businesses on Chinese main land but equally in Hong Kong. Since Incorp China is a small boutique consultancy our management is able to personally oversee every project we take on.

In this case Incorp China’s CEO, Robert Fisch, went directly to the bank manager’s office to first establish guanxi over tea, talking about their families and personal life, before addressing the issue of the bank account. Having initiated a personal connection, the bank manager instructed his employees to open the account for Incorp China’s client that same day even though the customer could not be present.

While this case reflects the benefits of hiring a local consultancy very well, there is a deeper reason why a company might employ an advisory team for business in China. Rules and regulations are constantly changing in every country around the world. Other than in the Western hemisphere, however, laws made in Beijing when funnelled down to the provincial level, are being translated and reinterpreted differently in every part of the country. Fully understanding the impact of such non-transparent law on individual companies, and arguably even more importantly, knowing what legal changes to expect in advance, is crucial to every successful enterprise. Incorp China’s task is to stay informed and ahead of the game so we can give your business the best advice for its growth and success.

For any additional enquiries, please contact info@incorpchina.com or call us on +1 (561) 729 6508

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