| Chinese company (WOFE) vs Representative office |
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By Chris TIAN, Laywer and Accoutant |
| Chinese company or WOFE |
REP. OFFICE |
| A. Registration is relatively easy |
A. Registration process is relatively difficult |
| Just need passport (if this passport holder used it entered into China once ), then can start the WOFE registration process |
Need to authenticate a lot documents by Chinese embassy. Also the company should be incorporated at least 2 years |
| or the business license authenticated by Chinese embassy |
The business license, authenticated by Chinese embassy |
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Bank reference letter, authenticated by Chinese embassy |
| Article of association, authenticated by Chinese embassy |
| Power of attorney regarding authorized signatory, authenticated by Chinese embassy |
| Chief representative and representative appointment document, authenticated by Chinese embassy |
| B. Taxes is less than Rep. office |
B. Taxes is more than WOFE |
| Registered capital injection is tax free, which can pay most expenses, such as salary, rent, fixed assets, office expenses, travelling expenses, entertainment expenses….. |
All expenses will be taxed around 6% as business tax, the expenses will include but not limited to salary, rent, fixed assets, office expenses, travelling expenses, entertainment expenses |
| Corporate income tax is payable if has profit, the general rate is 25% on profit. Before December 31, 2017 If the annual profit is not more than CNY300,000, the actual rate is 10% ， |
All expenses will be taxed around 3% as corporate income tax, the expenses will include but not limited to salary, rent, fixed assets, office expenses, travelling expenses, entertainment expenses |
| VAT if have business or trading (3% is for small taxpayer, 6% of consulting and 17% of trading for general tax ), so far if quarterly income is not more than CNY90,000, VAT is ZERO |
VAT if have business or trading (3% is for small taxpayer, 6% of consulting and 17% of trading for general tax ) |
| Email: chris@ichinabiz.com Cell: 15800814467 Wechat: tianlaw |
