How start your business in China

---by Zhao Qin

About the speaker Zhao Qin

MSc IB student CERAM 2003-2004 Department Head Metro 2004-2005 Department Mgr. Changhai 2005-2006 Vice-President Changhai 2006-Now

Classifacation of Chinese Enterprise

State Enterprise Private Enterprise Joint Venture

Classifacation of Chinese Company

Limited Company 2 to 50 investors Registered capital: 0.03M RMB or more

Stock Limited Company 5 to infinite investors Registered capital: 5M RMB or more

Individual enterprise single investor Registered capital: 1 RMB

Procedure of setting up your company

Entitle Capital verification Compose articles of corporation Register company in industrial and commerci

al bureau Apply Organization Code Certification from s

upervision bureau

(continue)

Certificates from other function department Open primary account of your company Apply Tax Registration Certificate from tax bu

reau Apply your company’s invoice Start your business

How entitle your company

江西省 昌海 糖酒食品 有限公司 Region name industry Ltd. Co. Chinese only “China” “National” “Intertional” state enterpris

e only No same name in the same industry and regi

on

Procedure of verifying capital

Get “Name Approval Certificate” from industrial and commercial bureau

Open a temporary account of your company Enough money in the account Articles of your company Sharehoulder’s ID certificate Accountant office verify the capital

Which documents you need to register the company

capital verification report articles of corporation rental contract Name Approval Certificate fill the sheets

make your seals

offical seal contract seal business seal

Function of industrial and commercial bureau

Company registration Advertising supervision Consumer right protection Brand registration Keep market order

Use of Organization Code

ID number of the company tax, bank, social security, vehicle, custom

Function of supervision bureau

standardisation goods’ bar code goods’ quality and quantity supervision

Which function departments you also need to contact?

Sanitation bureau Bureau of Culture Commercial Commission Commission of Science Technology Education bureau

Primary account

only one and required taxation supervision draw cash

Types of Chinese tax

Turnover taxes Income taxes Resource taxes Taxes for special purposes Behaviour taxes Agricultural taxes Customs duties

Chinese taxation system

State taxation office Local taxation bureau Financial department Custom department

VAT ratesCoverage of collection Rates

Exportation of goods (except otherwise stipulated by the State)

0%

Agriculture, forestry, products of animal husbandry

13%

Crude oil, mine salt and goods other than those listed above, and services of processing, repairs and replacement

17%

Consumption tax ratesTaxable items Tax rates Tobacco 50% 40% 25% 25% 30%

Alcoholic drinks and alcohol 25% 15% 240 yuan per tonne 220 yuan per tonne 10% 5%

Cosmetics 30%

Skin-care and hair-care products 8%

Precious jewellery, pearls, precious jade and stones 5% 10%

Firecrackers and Fireworks 15%

Gasoline 0.2 yuan per litre 0.28 yuan per litre

Diesel 0.1 yuan per litre

Motor Vehicle Tyres 10%

Motor-cycles 10%

Motor cars 3%,5%,8%

Business tax rates

Taxable items Tax rates

communications and transportation 3%

construction 3%

financial and insurance businesses 8%

culture and sports 3%

post and tele-communication 3%

entertainment 5%-20%

services 5%

transfer of intangible assets 5%

sales of immovable properties 5%

Enterprise income taxes

Normally, the amount of Enterprise Income Tax payable is computed on the basis of the taxable income and by applying the rate of 33%.

Besides the statutory rate, two lower rates of 18% and 27% are designed for some less profitable enterprises.