A Summary of business regulations in Shenzhen

Dear Friends,

Merry Christmas and Happy New Year! WealthSharings would like to take this opportunity to extend our very best wishes to you. We really do appreciate our dear friends who are cooperating with us or want to in the future. May 2016 be fruitful for you with great business and personal success!

We would like to share the following information for it could be helpful to you for registering and maintaining a business in Shenzhen. It summarizes the latest regulations and policies.

Registration

Good news! The registration requirements has been getting simpler.

1. An office lease is now not a requirement for registering a new enterprise.

It used to be one of the strictest requirements in the whole registration process. The main reason is that the legal representative of the new enterprise is required to present his/her with his passport to the leasing management office (this is the only stipulation, and it merely requires showing the legal representative’s passport). In the current policy and regulation, no office lease is required, the only requirement related to an office is a contact address for receiving mail from government offices, banks or other third parties.

2. No specific capital amount and injection time requirement

It used to require CNY 100,000 (approx. USD 15,500) as limited capital for a foreign enterprise or an individual to set up an entity on the Mainland. Currently, it is all up to investor decisions including the amount and time limit.

3. Business scope

Business activities that require pre-approval (link to state industry policy) could only be added in the business registration record after approval. With the new regulations, the planned scope is allowable for listing in the company registration record and an approval afterward is still necessary for a real start of a limited business enterprise (Ltd.). It doesn’t seem like much, but it does save one step in the process to update registration records after getting approval.

Tax saving opportunities

Turnover taxes

Service revenues from overseas can apply for a tax preference.

Tax is exempted on domestic revenue that is less than CNY 90,000 a quarter. For example, if CNY 85,000 revenue was received from January to March, then there is no tax liability.

Corporate profits tax

Generally in mainland China the corporate profit tax rate is 25%. 10% is the rate for a company whose profits is not more than CNY 100,000 a year. This represents a corporate tax savings of 1.5 times. (10% compared to the original 25%.)

A much friendlier environment for foreign friends.

It is well known that Shenzhen is one of the friendliest and easiest to navigate cities in China for foreigners, ranking just behind Hong Kong. Most banks provide English services and mature consulting companies are also providing quality services to foreign friends.

Shenzhen government offices also are some the most efficient official governance systems on the Mainland.

So here are a few bits of information and we hope it is helpful to you.

If you would like to learn more, we are more than willing to share.

Just send us an email or a WeChat message. And once again Happy Holidays!