China state government decided to reduce VAT (value added tax) and implement preferential tax policies to help companies to reduce 400 billion taxes in 2018

Chinese company (WOFE) vs Representative office
2017年10月10日

China state government decided to reduce VAT (value added tax) and implement preferential tax policies to help companies to reduce 400 billion taxes in 2018.

 

China State government decided that from May 1, 2018, the VAT (value added tax) for GENERAL TAX PAYER for the manufacturing industry and other industries will be reduced from 17% to 16%, and VAT for GENERAL TAX PAYER for transportation, construction, basic telecommunication services, and agricultural products will be reduced from 11% to 10%. It is estimated that the tax will be reduced by 240 billion RMB throughout this year.

Unified the standard for VAT for small-scale taxpayer, to increase the annual sales standard for small-scale taxpayers in industrial and commercial enterprises from 0.5 million RMB and 0.8 million RMB to 5 million RMB, and allow companies that registered as GENERAL TAX PAYER to be changed as small-scale taxpayer within a certain period of time, that will allow more companies to enjoy tax reductions at lower rates as small-scale taxpayer to pay VAT at 3%.

Third, for equipment manufacturing, advanced manufacturing, R&D and other modern service industries, and grid companies, the input tax of VAT that has not been deducted for a certain period of time will be one-time refund to companies.

These above three policies will help companies reduce RMB400 billion tax in 2018. Domestic and foreign-funded enterprises (such as WOFE, JV) will all benefit equally.

 

国务院常务会议决定从2018年5月1日起,一是将制造业等行业增值税税率从17%降至16%,将交通运输、建筑、基础电信服务等行业及农产品等货物的增值税税率从11%降至10%,预计全年可减税2400亿元。

二是统一增值税小规模纳税人标准。将工业企业和商业企业小规模纳税人的年销售额标准由50万元和80万元上调至500万元,并在一定期限内允许已登记为一般纳税人的企业转登记为小规模纳税人,让更多企业享受按较低征收率计税的优惠。

三是对装备制造等先进制造业、研发等现代服务业符合条件的企业和电网企业在一定时期内未抵扣完的进项税额予以一次性退还。

实施上述三项措施,全年将减轻市场主体税负超过4000亿元,内外资企业都将同等受益。

 

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Register a company in Shanghai with FREE registration address at USD1500

 

Would you like to start your business in the biggest city of China? After Foreign investment laws have been revised by Chinese State Congress standing committee which were effective on Oct. 1, 2016. Foreigner could start up business at 1 CNY registered capital with passport only.

What documents or information are required to register a company in China?
1. Passport which has entered into China before. Or foreign company business license which is authenticated by Chinese embassy in your country.

2. Provide a probable Chinese company name. It is better to figure out 5-10 Chinese company names in order to check the availability at AIC (Administration of industry and Commerce).

3. Check your business scope whether is in forbidden or restricted list in Catalog of Industries for Guiding Foreign Investment (2017 Revision). Most of business has not restriction.

4. Registered capital, the law has no requirement regarding registered capital for MOST businesses, in theory the registered capital can be 1 CNY, but suggest the minimum registered capital is CNY 100,000, as it looks better on your business license.

5. Who will be the legal representative, the legal representative shall be managing director, board chairman or general manager.

6. Company supervisor, it cannot be border members, manager, financial manager and other senior executives.

7. Company registration address.

 

Package A cost is USD 1500 which includes:
1. Company name application
2. Certificate of Approval or Record
3. Standard article of association
4. Business license
5. FREE company registration address (this registration address is located in urban district of Shanghai, which has very good tax bureau services)
6. Company stamp, invoice stamp, legal representative stamp, financial stamp

 

Package B cost is USD 2500 which includes:
1. Company name application
2. Certificate of Approval or Record
3. Standard article of association
4. Business license
5. FREE company registration address (this registration address is located in urban district of Shanghai, which has very good tax bureau services)
6. Company stamp, invoice stamp, legal representative stamp, financial stamp
7. Assist in opening CNY bank account and Capital bank account. (bank fee is not included, maximum USD200)

 

Package C cost is USD 3000 which includes:
1. Company name application
2. Certificate of Approval or Record
3. Standard article of association
4. Business license
5. FREE company registration address (this registration address is located in urban district of Shanghai, which has very good tax bureau services)
6. Company stamp, invoice stamp, legal representative stamp, financial stamp
7. Assist in opening bank account (bank fee is not included, at most around CNY1000)
8. Assist in tax bureau registration and initializing Fapiao purchase from tax bureau (VAT Fapiao device costs CNY830 which is not included)

 

Package D cost is USD 5000 which includes:
1. Company name application
2. Certificate of Approval or Record
3. Standard article of association
4. Business license
5. FREE company registration address (this registration address is located in urban district of Shanghai, which has very good tax bureau services)
6. Company stamp, invoice stamp, legal representative stamp, financial stamp
7. Assist in opening bank account (bank fee is not included, at most around CNY1000)
8. Assist in tax bureau registration and initializing Fapiao purchase from tax bureau (VAT Fapiao device costs CNY830 which is not included)
9. Import and export certificate
10. CIQ certificate
11. Custom certificate
12. E-custom card
13. General tax payer certificate (VAT 17% for trading, 6% for consulting,)
14. VAT refund certificate

General tax information:
1. Currently If the company is doing consulting or services, suggest to apply for small tax payer, then the VAT rate is 3%. If quarterly sales is less than RMB 30,000, then it will be VAT free.

2. The general company income tax rate is 25%, currently if the annual profit is less than CNY500,000, the actual company income tax rate is 10%.

The preference company income tax rate, and VAT policy will be changed according to Chinese government policy, regulation or law.

 

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