With a population of 1.4 billion, China is a huge market for Trading companies (Import & Export). In 2019, the value of goods imported and exported through Shanghai Port reached RMB 8.42679 trillion, ranking first across the globe. Besides that, Shanghai Port handled a throughput of about 43.30 million TEUs, remaining as the world’s busiest container port.
If you are attracted by the enticing opportunities of China’s vigorous market, maybe you are thinking of setting up a trading company in Mainland China. As a foreign investor, you feel unfamiliar with market regulations and registration procedures. In this article, we’ve listed thorough instructions and crucial steps for trading company registration in China.
The Company Registration process in China
Renting an office for the Company Registration
At present, when you decide to set up a company, you have to rent an office in the district in which the company locates. In addition, according to Company Law, different companies need different office requirements for company registration.
For example, if you want to set up a food & beverage Trading company, you need to rent an actual office address which is no less than 35 square meters for the Import & Export License. Moreover, this address should be the same address in the Business License.
The Chinese company’s Prename Approval
The normal Chinese Import & Export or Trading company’s name should be formatted as:
English: Shanghai XXX Import & Export Co., Ltd.
English: Shanghai XXX Trading Co., Ltd.
First structure: registered place (For instance: 上海 Shanghai)；
Second structure: Chinese name (For instance: XXX)；
Third structure: Key Industry (For instance: Import & Export / Trading 进出口 / 商贸 )；
Fourth structure: Form of Incorporation (For instance: Co,.Ltd 有限责任公司 )；
When companies in China are registered, they are done so entirely in the Chinese language including FIE (Foreign Investment Enterprise). But why the Chinese trading companies have English Names? The answer is simple. Because trading companies need to communicate with your foreign clients in English. Meanwhile, choosing an English name becomes a necessary condition for overseas bank payments.
The registered Capital of the Company
The Chinese company Law enforces the subscribed system after March 1, 2014, which requires no capital verification requirements to registered capital, Foreign-invested companies can confirm a certain amount of funds according to their own situation.
The Business Scope of Foreign Invested Enterprise
If you decide to set up a company in China, you should be careful about the Company’s business scope. That means the Chinese company’s business scope lists the services that it is legally permitted to provide according to its business registration type. Hence, a company can not offer any special services or products which are not specifically described in its business scope.
For example, the main scope of business of Import & Export company is:
“To do the importation & Exportation business of goods and technology.”
This is an example of the business scopes of the Trading company in China:
“The development and sale of computer software and hardware, sale of electronic products, handcraft gifts, office supplies, and other consultation services or trading business. Engaged in Import & Export business of goods and technology.”
If it is a Trading company, you must add the sentence ” Engaged in Import & Export business of goods and technology” in the Business scope of the Business License when you set up your company. Only in this way, you can apply for the Import & Export Licenses for Trading Company.
The Shareholder Information
The shareholder is the natural person or company that holds the share of a limited company. When checking the Chinese names of the company, a natural person only needs to provide a copy of the ID card, the company shall provide a copy of the company license with an official seal.
Company Business License
After the Prename approval, you can receive the Business Licensece within 3 – 5 Working days. Sometimes, the legal representative or investors shall go to the State Administration for Market Regulation(SAMR) to sign the legal documents. After, the Business License and the copy of the license, Official Seals, Finance Stamper, and corporate seal will finish within 7 working days.
Generally, there are 5 types of Business Registration Companies in China, this is what the New Foreign Trade Business License looks like:
You can use the China company Free Search Engine to verify the Chinese Company.
Business Bank Account Opening
Above all, opening a business bank account in China is indispensable to ensure business in China. Generally speaking, as a trading company, you should open a Basic account, Capital account, Foreign Exchange Account in the bank. Besides, you can also choose different banks to set up a bank account for the company. There are four famous company banks in China, that is China Bank, China Construction Bank, China Industrial, and Commercial Bank, China Agricultural Bank, etc. Of cause, you can also choose the Foreign Bank in China just like HSBC, SC, CityBank, etc.
Taxpayer Type for Import – Export Company
Invoice (Fapiao) is required by China’s tax authorities in order to compel companies to pay tax in advance on their sales.
According to the China Accounting Standard (CAS), taxpayers are divided into two types. That is the small-scale VAT taxpayer and the general VAT taxpayer. China’s Fapiao invoice system is created to avoid tax evasion. Normally, the trading company should apply for General VAT Payer in the Tax Bureau.
Thus, China’s invoice is obliged to be purchased from the Tax Bureau and print with the specified invoice machine of the unique invoice code for the company. With expertise in accounting and tax, we are here to provide an effective and prompt response to all your questions, concerning China’s invoice system.
The process of Import & Export Licenses for Trading Company
It is noticed that, even if you registered a company named trading company, you must apply for the following steps in different authorities.
1. Foreign Trade Registration Certificate (Unit put on record)
Firstly, for the Chinese company engaged in the import and export of goods, you need to apply for the “China Foreign Trade Registration Certificate” and put it on record in the Commission of Commerce Bureau.
This is what the Foreign Trade certificate looks like:
2. Inspection and Quarantine Registration Form
Secondly, you need to apply for the Inspection and Quarantine and put it on record in the Customs Bureau.
This is what the Inspection and Quarantine Form looks like:
3. Customs Registration Certificate (Declaration Unit)
Thirdly, you need to apply for the Customs Registration Certificate in the Customs Bureau.
This is what the Customs Registration certificate looks like:
4. Import unit Administration Form
Fourth, you need to put on the record of Import unit administration Form in the Customs Bureau.
This is what the Import unit administration Form looks like:
5. Electronic Port Card/China E-port Ukey 2020
Fifth, you need to apply for the Electronic Port Card in the Customs Bureau.
In 2020, the Electronic Port Card updated to China E-port Ukey in the Customs Bureau.
Generally speaking, if the trading company doesn’t have these Certificates, the customs will not carry out the trading procedures. Therefore, if you set up a trading company in China, you must complete the steps above to operate the import & export business.
Find an agency to help you with Trading Company Registration in Shanghai
GWBMA provides professional company registration service for foreigners. We have a very strong relationship with the Shanghai Municipal Commission of Commerce.
We provide one-stop service for you to start a business in Shanghai.
Contact Us: email@example.com
Tel: +86 15901819201