Investment Policies & Relevant Regulations

Q1: What other formalities should be done after a foreign invested enterprise gets its business license?

1) to apply for the official seals at Shanghai Public Security Bureau;
2) to apply6 for the foreign exchange registration certificate at the Shanghai Foreign Exchange Administration Bureau;
3) to open the RMB and foreign currency account;
4) to go through the tax registration at the Tax Bureau;
5) to apply for Corporation Code Certificate at the Shanghai Technology Supervising Bureau;
6) to go through the Customs registration;
7) to go through the Commodity Inspection registration at the Commodity Inspection Bureau;
8) to go through the registration at the Shanghai Statistic Bureau;
9) to go through the employee recruitment procedure at the Labour Bureau and overseas person's working procedure at the Foreigner Working Administration Office or Taiwanese, Hongkongese and Macaunese Working Administration Office in the Labour Bureau.

Q2: Dose the Customs have any regulations about foreign invested enterprises and their imports and exports?

In accordance with Customs Law of the P.R.C. and relevant regulations, the Customs has formulated the following major regulations to administrate foreign invested enterprises imports and exports:

(1) Once approved for establishment, a foreign-invested enterprise shall register to the Customs.
The enterprise shall fill out the application for declaration for declaration registration and prepare the following papers:
A. A duplicate or photo copy of approved business opening certificate;
B. A duplicate or photo copy of the business license issued by ICAB;
C. The financial guarantee issued by the bank (Hand in when the Customs considers it necessary);
D. Relevant papers to show the business operations of the enterprise.

Once examined and approved by the Customs, the foreign-invested enterprise will be given the Certificate of Declaration Registration and pay service charge for it.

Given the Certificate of Declaration Registration, the foreign-invested enterprise shall choose a full-timer in charge of or a person with special responsibility for declaration at the Customs. They will receive special training from the Customs. If they are qualified through tests, they'll be given a Certificate of Declarer. With this, they can handle declaration.

(2) Raw materials, fuel, components, parts accessories and packing materials imported by a foreign-invested enterprise to fulfill export contract of goods for export are exempt from import duty. The Customs shall supervise in accordance with relevant provisions and issue "A Registration Booklet of the Customs of the P.R.C. About Imported Materials and Parts to Be for the goods mentioned above. And the Customs examines and releases the goods according to its enterprise contract or its import and export contract.

(3) While following the procedure of declaration on imported or exported goods, the foreign-invested enterprise shall fill out the Customs Declaration Form on Imports (Experts), and declare to the Customs with the receipt of the list of goods transported. If the goods imported or exported need licensing, the Customs will check the license as well.

(4) In accordance with the regulation, the receiver of the imported goods shall declare to the Customs within 14 days after the means of transport declares its arrival, and the sender of exported goods shall declare to the Customs 24 hours prior to the loading except those with special permission of the Customs.

(5) Imported and exported goods shall be subject to the Customs' examination.

(6) Materials and parts imported through a Free Duty Zone and used to manufacture products for domestic marker shall be subject to normal import formalities. The foreign-invested enterprise shall have its import license examined by the Customs for its licensed commodities and shall pay import duties and VAT for the materials and parts

Q3: Is it necessary to get the assessment from the relevant government authority when the foreign invested enterprises use equipment as their capital contribution?

It is necessary for foreign investors to get approval from the government authority in case that they sue equipment as capital contribution. The Commodity Inspection Bureau is responsible for assessing the value of the equipment and the Custom Office will impose import duty on the equipment on basis of the assessed value.

Q4: What procedures shall the foreign invested enterprises follow to exchange the foreign currencies at the bank?

The Foreign Invested Enterprises should apply to their account-opening bank for handing the foreign exchange and then provide the necessary documents such as Application For for exchanging foreign currency, payment voucher of foreign currency or cheque according to the bank's requirements.

Q5: How shall a foreign invested enterprise organize its production and export if some of the products are under the administration of state export license?

A foreign-invested enterprise shall be ratified by the responsible department of the State before establishment if it is going to manufacture products that need license for export. Having begun its production, the enterprise shall declare its annual plan within the scale ratified by the State. The responsible department of the State will issue an annual export license the enterprise.

Q6: How can a foreign invested enterprise obtain an import license?

A foreign-invested enterprise shall submit its application to the responsible government authority if it is going to import products which are licensed for import by the state. Under the prerequisite of reasonable use, the government will arrange for the enterprise an import license within the allocation by the State.

Q7: What should foreign invested enterprises do to establish branches?

The Foreign Invested Enterprises should apply to original Registration Administration Bureau for Industry and Commerce for the establishment of branches in China according to the relevant regulations. The Foreign-Invested Enterprise shall have paid its registered capital periodically according to regulation and have started production if it wants to establish branches in China, and it should have paid all its registered capital if it wants to establish any operative branches.

Q8: Can foreign invested enterprises establish branches out of China?

The Foreign Invested Enterprises shall fully contribute their registered capital which is verified by the CPA according to the Articles of Association and have started production (or open business) for at least one year and manufacturing enterprises shall have certain volume of export before they apply to establish overseas branches including sub-company and representative office. The Foreign Economic and Cooperation Department of State Council is responsible for the examination and approval of the application to establish overseas sub-company, while the Foreign Economic and Trade Commission of Provincial level is responsible for the representative office. The Foreign Economic and Cooperation Department of State Council is also responsible for the application submitted by the enterprise whose Certificate of Approval is issued by the same department.

Q9: Can a foreign invested enterprise set up manufacturing place besides its registered address?

Foreign invested manufacturing enterprises can decide to put manufacturing place to be consistent with registered address or not. According to the concerned regulations of branch's establishment, foreign invested manufacturing enterprises can apply to set up manufacturing place besides its registered address on the basis of requirement of production and management.

Q10: Can foreign invested enterprises enjoy the tax-refund policy for their exported goods?

Foreign invested enterprises, manufacturing and exporting goods within the company's business scope in accordance with Regulations on VAT Refund (Exemption) for Exported Goods and Notification on Taxation Issues of Foreign Invested Enterprises, can apply to competent tax authority monthly for VAT exemption for their exported products with necessary documents The input tax is used to credit the VAT payable on domestically sold products. The balance of the creditable input tax in excess of VAT payable shall be refunded.

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