Wholly foreign-owned enterprise

A wholly foreign-owned enterprise refers to a foreign company, enterprise, other economic organization or individual, and all enterprises established in China under the Chinese law are invested by foreign investors. According to the provisions of the Foreign-Funded Enterprise Law, the establishment of a foreign-funded enterprise must be conducive to the development of China's national economy, and should at least meet the following conditions, that is, the use of international advanced technology and equipment; all or most of the products are exported. The organization form of a foreign-funded enterprise is generally a limited liability company, or it can be said to be a one-person limited company. However, it does not include foreign companies, enterprises, and branches of other economic organizations located in China, such as branch offices, offices, and representative offices.


Prerequisites

1. One or several foreign investors (any company or individual)

2. Registered capital: RMB 100,000 (any foreign currency is available)

3. The business project must comply with the "Guidance Catalogue for Foreign Investment Industries" issued by the State Council.

provide information

1. Proof of legal business opening of foreign merchants (passport for personal investment) Notarization by local notary public and certified by Chinese embassy (local company may not need certification)

2. Credit certificate (issued by the bank where the account is opened, the validity period shall not exceed three months. The content includes the number of deposits of the enterprise and the settlement of the funds.)

3. List of directors, deputy and deputy general managers and copies of their ID cards (passports)

4. The original "Delegation Book" of the directors and the "Recommendations" of the deputy general manager and their Chinese translations

5. Copy of legal representative ID card (passport), resume, photo (1 inch, 1 photo)

6, the company's domicile (business premises) property property certificate and rental agreement
Related features


1. In addition to land, the investment of the enterprise is 100% privately owned by foreign investors, and no Chinese investors participate in the shares. A company can be a foreign investor or a joint venture of several foreign investors.

2. Independent operation, no Chinese participation in business management. The company conducts business management activities in accordance with the approved articles of association and is not subject to interference.

3. Self-financing. In addition to paying taxes in accordance with China's relevant tax regulations, operating income is wholly owned and controlled by investors. Upon termination of the enterprise, it shall be announced in time and liquidated in accordance with legal procedures.

Basic policies and principles
According to the Law of the People's Republic of China on Foreign Investment Enterprises promulgated on April 12, 1986, the basic policies and principles for the establishment of wholly foreign-owned enterprises in China are:

1. In order to expand foreign economic cooperation and technical exchanges and promote the development of China's national economy, China allows foreign enterprises and other economic organizations or individuals to set up foreign-funded enterprises in China to protect the legitimate rights and interests of foreign-funded enterprises.

2. The establishment of a foreign-funded enterprise must be conducive to the development of China's national economy, and the use of advanced technology and equipment, or the export or export of most of its products. China prohibits or restricts the establishment of foreign-invested enterprises in certain industries. Industries that prohibit or restrict foreign-funded enterprises, including military industry, post and telecommunications enterprises, and cultural enterprises.

3. The investment, profits and other legitimate rights and interests of foreign investors in China are protected by Chinese law. Foreign-funded enterprises must abide by Chinese laws and laws and regulations, and must not harm China's social public interests. The Law on Foreign-invested Enterprises also stipulates that China does not nationalize and levy foreign-funded enterprises; in special circumstances, according to the needs of social public interests, when foreign-funded enterprises are imposed in accordance with legal procedures, they are compensated accordingly.

4. The application for the establishment of a foreign-funded enterprise shall be examined and approved by the competent department of foreign economic relations and trade under the State Council or the authority authorized by the State Council. A foreign-funded enterprise shall invest in China within the time limit approved by the examination and approval authority; if it fails to invest within the time limit, the administrative authority for industry and commerce shall have the right to revoke its business license. The investment situation of foreign-funded enterprises shall be examined and supervised by the administrative authorities for industry and commerce.

5. The production and operation plan of a foreign-funded enterprise shall be reported to the competent department for the record.

6. Foreign-funded enterprises must set up accounting books in China, conduct independent accounting, submit accounting statements in accordance with regulations, and accept supervision by the financial and tax authorities. If the refusal to set up accounting books in China, the financial and tax authorities may impose fines, and the industrial and commercial administration may order them to suspend business or revoke their business licenses.

7. Foreign-funded enterprises may apply for tax-deductible and tax-free preferential treatment in accordance with the Law of the People's Republic of China on Foreign Enterprise Income Tax and China's relevant tax regulations. If the profit after paying the income tax is reinvested in China, it may apply for refund of part of the income tax already paid for the reinvestment.

Comparison with individual proprietorships


Similarities

1. Are enterprises established in China within the laws of China;

2. Its investors are single investors;

3. They are engaged in production and operation activities for the purpose of profit.


the difference

1. An investor of a wholly foreign-owned enterprise may be a foreign enterprise or other economic organization, or a non-Chinese citizen, including foreigners and stateless persons;

2. The establishment of a wholly foreign-owned enterprise must be conducive to the development of China's national economy, and the use of advanced technology and equipment, or the full export or most of the products. The application for the establishment of a wholly foreign-owned enterprise shall be examined and approved by the competent department of foreign economic relations and trade of the State Council or the authority authorized by the State Council. After the application for the establishment of a wholly foreign-owned enterprise is approved, the foreign investor can apply for registration with the industrial and commercial administration authority with the approval document. license. The establishment conditions of individual proprietorship enterprises are quite lenient, and the establishment procedure is relatively simple. As long as there are legal enterprise names, investment by investors, fixed production and operation sites, necessary production and operation conditions, and necessary employees, the enterprise registration authority It should be registered within the statutory time limit. Unless the business to be engaged by a sole proprietorship enterprise is a business that is required by law and administrative regulations to be submitted to the relevant department for approval, it is not necessary to submit an approval document to the registration authority.

3. The property of a sole proprietorship enterprise is inseparable from the property of the investor and cannot bear the corporate debt independently. The debt is borne by the investor's personal property. Therefore, all individual proprietorships do not have legal personality. According to the provisions of the Foreign-Funded Enterprise Law, if a foreign-funded enterprise meets the requirements of Chinese law regarding the conditions of legal persons, it can obtain the qualification of a Chinese legal person according to law. As a kind of foreign-funded enterprise, a wholly foreign-owned enterprise can also obtain the qualification of a Chinese legal person.

A wholly foreign-owned enterprise can be divided into two categories. One is a foreign-invested enterprise or other economic organization that is invested in China under the Chinese law. One is a non-Chinese citizen (foreign natural person or stateless person) in China according to Chinese law. Domestically invested and established registered enterprises.