China is poised to become the second largest global economy by 2020. This, combined with a burgeoning 1.38 billion population, has made it extremely attractive for companies to start a business in the country. InCorp’s management team in China has a combined expertise of more than a century’s worth of experience working in the Inland Revenue Authority of Singapore and China Tax Authorities, as well as in financial institutions, listed multinational corporations, and international accounting firms. If you plan on expanding your business into China talk to us today!

1. OFFICIAL CORPORATESERVICESPARTNEROF
Market Insights:
China
Build your Business,
Expand into China

2. BENEFITS OF INVESTING IN CHINA
2

3. 3
BENEFITS OF
INVESTING IN
CHINA
Key Benefits of Investment in China
Massive workforce
Strategically
located near
emerging
economies in
Asia
Increasing
purchase power
Steadily growing
economy
Among the largest
importers and
exporters in the
world
Well-developed
infrastructure and
manufacturing plants

4. 4
BENEFITS OF
INVESTING IN
CHINA
ECONOMY GROWTH DATA
2013 2014 2015 2016 2017
GDP (billion RMB) 59,524.40 64,397.40 68,905.20 74,358.50 82,712.20
Growth Rate ( % vs. last year) 7.8 7.3 6.9 6.7 6.9
0
5
10
15
20
-
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
90,000.00
2013-2017 GDP & Growth Ratio
Source: National Statistics Bureau

5. 5
BENEFITS OF
INVESTING IN
CHINA
TIER CLASSIFICATION OF CITIES IN CHINA
Slightly different methods for classification such as GDP, political administration,
population size, development of services, infrastructure, cosmopolitan nature,
retail sales, etc.

6. SETTING UP IN CHINA
A Guide
6

7. INVESTMENT
CATEGORY
CATALOGUE FOR THE GUIDANCE OF FOREIGN
INVESTMENT INDUSTRIES
Proposed Foreign Investment Industrial Catalogue Negative List
Activities and Sectors in the Proposed Category, Subject to Limitations
on Foreign Equity Ownership
Restricted Category
Excludes the Restrictive Measures that Apply to both Foreign and
Domestic Investments
The Negative List Applies to All Regions in China, except for Free
Trade Zones (FTZs)
7

8. INVESTMENT
CATEGORY
MAIN CHANGES IN 2018 NEGATIVE LIST
(Effective from July 28, 2018)
A. Agriculture, Forestry, Animal Husbandry, and Fishery
A1 Seed industry • Selection and cultivation of new varieties of, and production of seeds of, wheat and corn, must be
corn, must be undertaken by a company controlled by the Chinese party.
• Investment in the research, development, breeding, and planting of China’s rare and unique precious
unique precious quality varieties as well as the production of relevant breeding materials (including
materials (including quality genes of planting, animal husbandry and aquaculture) is banned.
banned.
• Investment in the selection of genetically modified varieties and the production of genetically
genetically modified seeds (fingerlings) with respect to crops, breeding stock and poultry, and
poultry, and aquatic fingerlings is prohibited.
A2 Fishery • Investment in fishing aquatic products in sea areas under Chinese jurisdiction and in inland waters is
inland waters is prohibited.
B. Mining
B3 Oil and natural
gas exploitation
industry
• Oil and natural gas (excluding coalbed methane, oil shale, oil sand, and shale gas) may only be
only be exploited via joint ventures and cooperatives.
B4 Ferrous metal and
and Non-ferrous
ferrous metal
mining and
beneficiation as
well as auxiliary
mining activities
activities
• Investment in the reconnaissance and mining of tungsten, molybdenum, tin, antimony and fluorite is
and fluorite is banned.
• Investment in the reconnaissance, mining and beneficiation of rare earth is prohibited.
• Investment in the reconnaissance, mining and beneficiation of radioactive minerals is prohibited.
prohibited.
8

9. INVESTMENT
CATEGORY
MAIN CHANGES IN 2018 NEGATIVE LIST
(Effective from July 28, 2018)
C. Manufacturing
C5 Printing industry • Investment in the printing of publications must be controlled by the Chinese party.
C6 Processing of
nuclear fuels and
nuclear radiation
• Investment in the smelting and processing of radioactive minerals and the production of nuclear fuels
is prohibited.
C7 Processing of
Traditional
Chinese Medicine
decoction pieces,
and production of
Chinese patent
medicines
• Investment in the application of such processing techniques of traditional Chinese medicine decoction
pieces as steaming, frying, cauterizing and calcining and the manufacturing of Chinese patent
medicinal products with a secret formula is prohibited.
C8 Automobile
manufacturing
• Except for special vehicles and new-energy vehicles, shares of a manufacturer producing other types
of vehicles, held by Chinese parties, shall be fifty (50) percent at least, and a single foreign investor
may establish up to two joint ventures in China to manufacture the same type of vehicles (limits on the
foreign shareholding will be removed for commercial vehicles in 2020. In 2022, limits on the foreign
shareholding will be abolished for passenger vehicles, and the restriction that a single foreign investor
may establish up to two joint ventures in China to manufacture the same type of vehicles will be
eliminated as well).
C9 Communications
equipment
manufacturing
• Investment in the manufacturing of ground receiving facilities and key parts for satellite television
broadcasting.
C10 Other
manufacturing
• Investment in the production of Xuan paper and Chinese ink ingot is prohibited.
9

10. INVESTMENT
CATEGORY
MAIN CHANGES IN 2018 NEGATIVE LIST
(Effective from July 28, 2018)
D. Production and Supply of Electric Power, Heating Power, Gas, and Water
D11 Nuclear power
generation
• Investment in the construction and operation of nuclear power plant must be controlled by the Chinese
party.
D12 Pipe network
facilities
• Investment in the construction and operation of urban gas pipe networks, heating power pipe networks,
water supply, and sewage pipe networks in a city with more than 500,000 residents must be controlled
by the Chinese party.
E. Wholesale and Retail
E13 Tobacco products • Investment in the wholesale and retail of leaf tobacco, cigarettes, re-dried leaf tobacco, and other
tobacco products is banned.
F. Communication and Transportation, Storage and Mail
F14 Water
transportation
• Domestic water transportation companies must be controlled by the Chinese party.
• Domestic vessel agents must be controlled by the Chinese party.
F15 Air transportation
for passengers
and freight
• A public air transportation company must be controlled by the Chinese party, and the investment made
by a single foreign investor together with its related-party enterprises in such company shall not
exceed 25 percent, and such company’s legal representative must be a Chinese citizen.
F16 General aviation
services
• Legal representatives of general aviation companies must be Chinese citizens, of which, those for the
agriculture, forestry and fishery industries are limited to joint ventures only, while others shall be
controlled by the Chinese party.
F17 Airport and air
traffic control
• Investment in the construction and operation of civil airports must be relatively controlled by the
Chinese party.
• Investment in air traffic control is prohibited.
F18 Post industry • Investment in postal service companies and the business of domestic delivery mail is prohibited.
10

11. INVESTMENT
CATEGORY
MAIN CHANGES IN 2018 NEGATIVE LIST
(Effective from July 28, 2018)
G. Information Transmission, Software and Information Technology Services
G19 Telecommunicatio
ns
• Telecommunications companies are limited to investment in the telecommunications business opened
according to China's WTO accession commitments; the proportion of foreign investment in a value-
added telecommunications business (excluding e-commerce business) shall not exceed fifty (50)
percent; the basic telecommunication business must be controlled by the Chinese party.
G20 Internet and
related services
• Investment in internet news services, online publishing services, online audio-visual program services,
internet culture operation (excluding music), and internet public-oriented information releasing
services (excluding content of the abovementioned services that is permitted under China's WTO
accession commitments) is prohibited.
H. Finance
H21 Capital market
services
• The proportion of foreign capital invested in a securities company shall be less than fifty-one (51)
percent, the proportion of foreign capital invested in a securities investment fund management
company shall be less than 51 percent (this limit on the foreign shareholding proportion will be
canceled in 2021).
• The proportion of foreign capital invested in a futures company shall be less than 51 percent (this limit
on the foreign shareholding proportion will be canceled in 2021).
H22 Insurance sector • The proportion of foreign capital in a life insurance company shall be less than 51 percent (this limit on
the foreign shareholding proportion will be canceled in 2021).
11

12. INVESTMENT
CATEGORY
MAIN CHANGES IN 2018 NEGATIVE LIST
(Effective from July 28, 2018)
I. Leasing and Business Services
I23 Legal services
• Engagement in Chinese legal affairs (except for the provision of information relating to the
impacts of China's legal environment) is prohibited; becoming the partner of a domestic law
office is prohibited.
I24
Consultation and
investigation
• Investment in a market survey is limited to joint venture and cooperative operation;
specifically, investment in a broadcasting and television listening and rating survey must be
controlled by the Chinese party.
• Investment in a social survey is banned.
J. Scientific Research and Technical Services
J25
Development of research and
experiment
• Investment in the development and application of technologies of human stem cell and
gene diagnosis and treatment is prohibited.
• Investment in humanistic and social science research institutions is prohibited.
J26
Professional technical
services
• Investment in geodetic surveying, hydrographic surveying and charting, surveying and
mapping via aerial photography, ground mobile surveying, surveying and mapping of
administrative area borders, compiling of topographical maps, world administrative maps,
national administrative maps, administrative maps at the provincial level or below, national
school maps, local school maps and true three-dimensional maps, compiling of navigation
electronic maps and regional investigations in terms of geological mapping, mineral
geology, geophysics, geochemistry, hydrogeology, environmental geology, geological
disasters, and remote sensing geology is prohibited.
12

13. INVESTMENT
CATEGORY
MAIN CHANGES IN 2018 NEGATIVE LIST
(Effective from July 28, 2018)
K. Water Conservancy, Environment, and Public Facility Management
K27 Wild animal and plant
protection
• Investment in the development of wildlife resources originating in China and under national
protection is banned.
L. Education
L28 Education • Investment in pre-school institutions, senior high schools and institutions of higher learning
is limited to schools jointly run by Sino-foreign entities; such schools must be dominated by
the Chinese party (principals or major administration heads in charge of such schools shall
be of Chinese nationality, and Chinese members of the council, board of directors or joint
management committee shall account for half at least).
• Investment in compulsory education institutions and religious educational institutions is
prohibited.
M. Health and Social Work
M29 Health • Investment in medical institutions is limited to joint venture and cooperative operation.
13

14. INVESTMENT
CATEGORY
MAIN CHANGES IN 2018 NEGATIVE LIST
(Effective from July 28, 2018)
N. Culture, Sports, and Entertainment
N30 Press and publishing • Investment in news agencies (including but not limited to press agencies) is prohibited.
prohibited.
• Investment in editing, publishing and production of books, newspapers, periodicals, audio-
periodicals, audio-visual products, and electronic publications is prohibited.
N31 Radio and television
broadcasting,
transmission,
production, and
operation
• Investment in all levels of broadcasting stations, television stations, radio and television
television channel and frequency, radio and television transmission networks (including
(including radio stations, rebroadcasting stations, broadcasting and TV satellites, satellite
satellite uplink stations, satellite signal receiving and rebroadcasting stations, microwave
microwave stations, monitoring stations and cable broadcasting and television transmission
transmission network, etc.) and engagement in the video on demand business of radio and
of radio and TV and in the provision of services of installation of the ground receiving
receiving facilities for satellite television broadcasting is prohibited.
• Investment in radio and television program production and operation (including introduction)
introduction) companies is prohibited.
N32 Film production,
distribution, and
projection
• Investment in the construction and operation of a cinema must be controlled by the Chinese
the Chinese party.
• Investment in film production companies, distribution companies, cinema companies, and
companies, and the introduction of films is prohibited.
N33 Protection of cultural
relics
• Investment in enterprises selling cultural relics by auction, cultural relics stores, and state-
and state-owned cultural relic museums is prohibited.
N34 Culture and
entertainment
• Investment in performance brokerage institutions must be controlled by the Chinese party.
Chinese party.
• Investment in cultural and artistic performance groups is prohibited.
14

15. 15
FORMS OF
INVESTMENTS
Forms of Investments Location Consideration
• Wholly Foreign-Owned
Enterprises (WOFEs)
• Large cities such as Shanghai,
Beijing, and Shenzhen
• Joint Venture (JV) • Coastal areas
• Representative Office (RO) • Western cities
• Foreign-Invested Partnership
Enterprise
• Investment zones
• Regional Headquarters (RHQ)
• Special regions such as Shanghai
Shanghai Free Trade Zone or
Bonded Zone
• Research and Development
Center

16. SET-UP
PROCEDURES
Usually takes about 3
to 6 months to
complete all the
procedures
16
Document Preparation1
Name Pre-check2
MOC Filing3
Open Bank Accounts6
Carve Company Chop5
SAIC Filing4
SAFE registration7
Tax Assessment8

17. DOCUMENTS /
INFORMATION
Documents/ information
to be provided by the
shareholder
No Documentation Copy
A. Information Required
A1 Proposed Chinese company name
A2 Business scope
A3 Registered capital and total investment
A4
Governance structure (director, supervisor, general
general manager, legal representative, etc.)
A5 Registration address
A6 Ultimate shareholder information
A7 Ownership Structure Chart
B. Documents required
B1
Investors: the copy of Certificate of Incorporation with
Incorporation with local notarization and certification
certification from local Chinese embassy
One original
B2 Passport copy of authorized signatory Scan copy
B3
Passport copies/ID card copies of the persons
appointed for Item A4 and their contact details
Scan copy
17

18. TOTAL
INVESTMENT
Registered Capital
18
Total investment
amount (USD)
Minimum registered capital (USD)
$3M or less 70% of the total investment amount
$3M to 10M
50% of the total investment amount or USD2.1M,
whichever is higher
$10M to 30M
40% of the total investment amount or USD5M, whichever
whichever is higher
Exceeding $30M
1/3 of the total investment amount or USD12M, whichever
whichever is higher
The amount by which total investment exceeds registered capital is the
company’s borrowing capacity. Foreign currency borrowing by a foreign-
invested company must be capped at the difference between total investment
and registered capital.

19. FOREIGN
EXCHANGE
CONTROL
Bank Accounts
19
RMB Account
• Basic account
• General account
Foreign Currency Account
• Capital account
• Goods transaction
account
• Non-trade settlement
account

20. COMPLIANCE REQUIREMENTS
A Guide
20

21. MAJOR TAXES
IN CHINA
21
TAXATION IN CHINA

22. MAJOR TAXES IN
CHINA:
CORPORATE
INCOME TAX
22
Standard Tax Rate 25%
Special rates
20% or 10% for small scale enterprise
15% for high and new technology enterprise
15% for encouraged business in certain regions
Basis Worldwide
Residence Establishment or effective management in China
Loss Carried forward for five (5) years
Taxable income
Gross income – allowing deducted costs/expenses – non taxable/ tax exempt
tax exempt items (loss carried forward)
Incentive
R&D expenses super-deduction
Tax exemption/reduction for special industries (e.g., agriculture, software, etc.)
software, etc.)
Foreign tax credit Yes
Transfer pricing rules Yes
Controlled foreign company
company rules
Yes
Tax year Calendar year
Management fee Not allowed for tax deduction
Capital gain Taxable combined with other operating income
Dividend
Exempt when paid by a resident company to another resident company
company
Dividend paid to foreign parent company is subject to withholding tax (usually
tax (usually 10% or lower according to the treaty)
Dividend received from foreign investment is subject to income tax and foreign
and foreign tax credit is generally allowed

23. MAJOR TAXES
IN CHINA:
PERSONAL
INCOME TAX
23
Types of Taxable Personal Income
• Employment income
• Business income from sole proprietorship and partnership
• Labor services income
• Script fee
• Royalty
• Interest and dividend
• Property rental
• Property transfer gain
• Incidental income
• Income from subcontracting or leasing operations
• Other kinds of income specified by the State Council
• Rates: progressive rates 3% to 45%

24. MAJOR TAXES IN
CHINA:
VAT
24
Industries/Activities Tax Rates
Goods sale / processing / repair
16%
(or 10% for a small category of goods)
goods)
Lease of movable tangible assets 16%
Basic telecommunications services 10%
Construction 10%
Postal services 10%
Real estate (leasing and sale of
immovable properties)
10%
Transfer of land use rights 10%
Consumer lifestyle services 6%
Financial services 6%
Value-added telecommunications 6%
Sale of intangible (except land use rights) 6%
Other modern services 6%

25. MAJOR TAXES IN
CHINA:
CONSUMPTION
TAX
25
Industries/Activities Tax Rates
Tax Rates
The tax is computed based on sales price and/or
and/or sales volume. Tax rates range from 1% to
1% to 56%.
Tax Scope
Including tobacco, alcoholic drinks, cosmetics,
cosmetics, jewelers, fireworks, gasoline, diesel oil,
diesel oil, tires, motorcycles, automobiles, golf
golf equipment, yacht, luxury watch, disposable
disposable chopsticks, and wooden floorboard
floorboard

26. MAJOR TAXES IN
CHINA:
CONSUMPTION
TAX
26
Types Tax Rate
Goods trading contract 0.03%
Processing and contracting contract 0.05%
Survey and design contract in construction project
project
0.05%
Documents of transfer of titles 0.05%
Construction and installation project contract 0.03%
Property lease contract 0.1%
Cargo transport contract 0.05%
Warehousing and storage contract 0.1%
Loan contract 0.1%
Property insurance contract 0.03%
Technology contract 0.03%
Survey and design contract in construction project
project
0.03%

27. COMPLIANCE
REQUIREMENT
27
Tax Returns Payment/Submission due date
Corporate
Income Tax
Provisional
quarterly filing
Due within 15 days after the end of each quarter
quarter
Annual filing
File within 5 months after the end of the tax year
year
Value
Added Tax
Usually monthly filing
filing
Report and pay tax within 15 days following the end
the end of the month
For importation
import VAT should be paid within 15 days after the
after the issuance of the tax payment certificates by
certificates by the customs office
Individual
Income Tax
Monthly filing
Report and pay tax within 15 days following the end
the end of the month
Annual filing
For annual income over RMB 120K due on March
March 31 of the following year
Annual
Government
Inspections
Relevant documents From April1 till June 30 the following year
Statistics
Report Monthly reporting
Submit within 15 days after the end of the month
month

28. IN.CORP OVERVIEW
28

29. SERVICES
PORTFOLIO
Single window, entity
administration and
compliance platform for
your business
 Cradle to Nirvana business
solutions
 Single window corporate
administration
 Integrated platform
 Connected across the region
OVERVIEW OF SERVICES

30. 30
Q&A ALLAN JIANG
Country Head of In.Corp Group in China
• Mr. Jiang is the director of China Association for Fiscal and Tax Law and has more than 23 years of
experience in tax compliance and tax advisory work in China, especially in corporate income tax, indirect
tax, and individual income tax.
• In 1994, he joined Chongqing State of Taxation Bureau's audit division and specialized in tax audit and
policy study for foreign-invested companies. In 2000, he joined a top 500 multinational company as a tax
manager.
• His expertise lies in advising MNCs on foreign enterprise income tax, indirect tax, and transfer pricing
audit matters from their operations in China.
• Mr. Jiang holds an MBA from the University of Chongqing, as well as a Professional Taxation degree
from Hunan Taxation Institution (an educational institution directly governed by SAT).

31. 31
CONTACT US
Allan Jiang
Country Head of In.Corp Group in China
allan.jiang@pkfkexin.com
Eric Chin
Group Head - Business Development
eric@incorp.asia
Group HQ’s website
www.incorp.asia

32. 32
Thank You!