How to register for a trading company
China has its unique way of allowing foreign businesses and that is to determine the business scope of a foreign-invested enterprise. For a trading WFOE, China’s Ministry of Commerce mandates five aspects that fall into this business scope.
- Trade agent
- Export and Import
Generally, registering a WFOE involves getting a five-in-one business license, however, a trading company under export and import needs to obtain an export/import license as well. On the other hand, a trading company is usually established in the form of a “foreign-invested commercial enterprise (FICE)” structure. This structure basically covers the business scope mentioned above.
Not having a minimum registered capital is one good aspect of establishing a WFOE. With that said, opening a trading company will be cost-effective. However, in terms of wholesale and retail companies, the registered capital should amount to RMB500,000 and RMB300,000, respectively.
Nevertheless, the registered capital can be paid at the initial stages. First, the applicant can pay 20 percent of the required amount after the company is registered within 90 days. Then, the remaining percentage shall be paid after the issuance of the business license within 2 years.
General steps to follow
1. First, pick a location, rent an office, and register the office’s address.
2. Then, decide on a company name both in English and Chinese and register at the State Administration for Market Regulation (SAMR).
3. After that, apply for a business license and request for the import/export license and qualification as a trader.
- Application form
- Feasibility study report
- Contract or article of formation
- Bank certificates and audit reports of investors
- List of goods to be traded
- Identity certificates or passport copies
- Pre-approval notice from the Ministry of Commerce
- Real estate leasing contract and compliance certificate
- List of board directors
- Evaluation report for state-owned assets
4. Finally, follow post-registration procedures.
- Open a foreign bank account.
- Register for trademark intellectual property.
- Obtain a company seal from the Public Security Bureau.
- Register for taxes.