Hong Kong and Chinese companies overview: - Advantages of a Hong Kong company include no foreign exchange controls, low taxes, and ease of access to China for business. Requirements include shareholder and director documents. - Chinese companies include representative offices, wholly foreign owned enterprises (WOFE), and joint ventures. Representative offices cannot issue invoices but WOFEs and joint ventures can conduct business. - Setting up any company in China requires documents like rental agreements and notarized documents, with timelines of 3 weeks for representative offices to 1-2 months for WOFEs and joint ventures. Capital must also be deposited for WOFEs and joint ventures.

1. Hong Kong and Chinese
Companies
Start a business
Apply for a work visa

2. Hong Kong Company
Advantage of HK company
1.No Foreign Exchange Control like China
2.Build up your international Brand
3.Easy to maintain the company
4.Low tax 16.5 % of profit tax
5.No limited on company name
6.Easy to access to China especially Shenzhen
to do business

3. Hong Kong Company Notes
1. It takes 10 working days to finish the whole
process.
2. After 18 months of newly-setup company,
the IRS will issue tax return form to you
3. HK company needs to file annual return
every year
4. HK company can file zero declaration or do
bookkeeping and audit report for tax filing.

4. Requirements
Company Registration Documents required
• Shareholder’s passport Copy
• Resident Proof
• If there is english address in your passport, no
need to provide;
• If not, you need to provide electricity bill, bank
statement etc at least 3 months as resident proof
Reminder: at least one individual director

5. HK Bank Account
1. Open Bank account documents required
2. Initial deposit: hkd10,000 （ Cash or Cheque ）
3. Certificate of incorporation--CI (original ）
4. Business registration certificate--BR (original ）
5. Register documents---NC1 (original ）
6. A memorandum and articles of association (English
original ）
7. Director's passport (original ）
8. Resident Proof
9. Leave your communication address for receiving bank letter
or relative issue.

6. Chinese Companies

7. Company Types of Foreign
Investment in China
1. Representative Office (RO)
2. Wholly Owned Foreign Enterprise
(WOFE)
3. Joint Venture (JV) aka Sino-Foreign
Investment Company

8. Company Functions
RO : To set up standpoint to liaison with supplier,QC, Technical support,
customer service, marketing research within China on behalf of parent
company; Can not Issue China Invoice (fapiao 发票 ) ； Employees
need to sign contact through third party human resources company
along with RO; No need to deposit investment capital into China.
WOFE: it is a limited entity which can issue China Invoice(fapiao 发
票 );Can perform most kinds of industry . For detail, please review the
attachment of Catalogue of industries for Guiding Foreign Investment;
WOFE can also be a plant to manufacture but need to apply for
environment protection permit first. Need to deposit certain amount
investment capital based on the business nature.
JV : The same function of WOFE. Only difference is the shareholder will
be Chinese and Foreign individual or corporate.

9. Requirements of RO
RO requirement: The parent company must be established for over 2
years
Documents needed:
1.1 Notarization of Parent company(If it is HK company, it can be
notarized by HK lawyer in HK;If it is other foreign company, need to
notarize in Local China embassy in that foreign countries) and Chief
representative’s passport （ director of RO ）
1.2 Rental contact and Leasing certificate (at least one year period)
1.3 Bank reference letter issued by the parent company’s bank
1.4 Chief Representative’s picture X2
Reminder: Process Time: Within 3 weeks. The fastest time will be 5
working days.

10. Requirements of WOFE
WOFE: No special requirements. The shareholder can be Individual or
Corporate.
Documents:
1.1 Notarization of Parent company( If it is HK company, it can be
notarized by HK lawyer in HK;If it is other foreign company, need to
notarize in Local China embassy in that foreign countries) . If the
shareholder is individual , he/she can notarize his/her passport in
China Embassy in his/her country Or he /she needs to show up in
some government department with his/her passport.
1.2 Rental contact and Leasing certificate (at least one year period)
1.3 Bank reference letter issued by the parent company’s bank
1.4 Audit Report(If the parent company has been set up for over 2 years)
Reminder: Process Time: within 1.5 -2 month.

11. Requirement of JV
The same procedure as WOFE but the foreign share of parent company
needs to be at least 25%
Option 2 ： The domestic china company transfer share to foreign
individual or corporate 。
Documents ：
2.1 Domestic China company: All company documents including business
license, organization code certificate, taxation certificate, leasing
certificate, stamp
2.2 Bank reference letter of Domestic China company
2.3 Audit report of Domestic China company
2.4 Foreign investor ‘s notarization documents
2.5 Bank reference letter of Foreign investor

12. Capital Investment
RO ： No need to deposit the capital investment. However, for monthly
bookkeeping and tax filing, the parent company needs to deposit certain tax
amount and operation fund into the RO bank account.
WOFE/JV: After company registration is done, you need to open bank account in
China. Usually it takes 10-15 working days to open basic account and capital
verification account based on different banks. Basic account is for company
operation such as: purchase good, pay salary etc. Capital verification account is
for foreign investor to deposit the registration capital . Then CPA needs to issue
capital verification report and update the license.
Reminder:
To deposit the registration capital can be one –off or by installments. If by
installments, the first installments is at least 15% of total registration capital.
However, I suggest you should deposit 20% because some of the government
department might request 20%..
For Service WOFE/JV, the registration capital is RMB100,000; For trading
WOFE/JV, the registration capital is RMB500,000. For manufacture WOFE/JV ,
it is RMB1,000,000
The RMB 100,000 should be deposited one-off

13. RO Tax
• Income =Expense/0.8
• Business Tax=Income*5%
• Enterprise Income Tax=Income
*0.15%*25%
• Urban Construction Tax= Business Tax*7%
• Education Tax=Business Tax * 3%
• Embankment Tax=Income *0.01%

14. WOFE/JV Tax
Income Tax=Income *25%
VAT= 3% or 17%
Business Tax=Income*5%
Urban Construction Tax= Business Tax or VAT*7%
Education Tax=Business Tax or VAT * 3%
Embankment Tax=Income *0.01%
Most of the WOFE will have VAT tax but some of them
will pay business Tax such as: restaurant , travel
agent, real estate etc

15. Tax Notes
• After company is registration , the VAT tax is 3% as
small scale tax payer. When you succeed in applying
for general tax payer, then the VAT tax is 17%
(WOFE Trading)
• For Service WOFE, small scale taxpayer VAT is 3%,
As general tax payer, the VAT shall be 6%, 11%
based on the business filed .
• The function to apply for the general taxpayer is to
apply for tax refund.

16. Work Permit and Resident Permit
As Foreigners working in China, you need to apply for the work permit and
resident permit.
The procedure will be as follows:
1. Open the employment online system of the company 5 working days
2. Submit online data and apply for the employment permit 3 working days
3. Apply for the invitation letter(3 month valid), 7 working days
4. Back to home country to apply for Z visa (one-month valid after enter China)
5. Apply for the work permit 1 working day
6. Make appointment for the interview (based on Public Security Bureau
system’s schedule)
7. Approved by Public Security Bureau then submit the resident permit
Total Process time will be around 2 months.

17. Documents Required
1. Company Business License
2. Organization Code Certificate
3. Company Stamp
4. Company Leasing Certificate
5. Applicant’s passport
6. 2-inch blue picture and picture receipt
7. Health Report
8. Temporary Resident Form for Visitor
9. Applicant's Education Diploma (Bachelor above)
10.Resume
Contact: Chester, Mobile/Wechat/Whatsap: 86 13510115828
Email:Chester@aronbest.com