Written by: Bruce Mitchell
Edited and Published by: William Billeaud
Before you can import or purchase any equipment for your China operations you need to create a Chinese company or Wholly Owned Foreign Investment. You will need to create a company for every location in China. You can’t just create one company and then build facilities elsewhere. It is different from in the US, where you simply need to consider llc vs inc advantages and the like.
The procedure is long and somewhat arduous. In my book “13 Steps to Manufacturing in China” I liken the entire procedure to climbing the Great Wall of China! Some steps are quick and some take time to develop and get approved along the way.
Following are the items that must be developed and submitted along with any other items specific local requirements of the City to the City Foreign Investment Committee for approval:
1. Application form
2. Articles of Association
3. Feasibility study
4. A pre-approved name along with the following:
A. Parent company’s business license plus Board resolution
B. List of Board of Directors of the new company along with each director’s resume
C. Bank reference
5. Apply for the business license with the Business License Bureau.
6. Apply for a Company Chop with the Security Bureau.
7. Apply for a Company ID code.
8. Apply for a bank account and foreign currency registration.
9. Obtain the IDs with the Customs, Inspection Bureau, Tax Bureau, and City Finance Bureau.
10. File the application for industry and commerce for registration
11. Receive your business license.
12. After establishment of the business follow the procedures for taxation registration with the tax authorities.
For the specific details of the above including the actual document formats you can find this and more in Chapter 9 Establishing a Company of “13 Steps to Manufacturing in China”.
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APPLICATION FORM FOR THE COMPANY
APPLYING FOR THE ESTABLISHMENT OF
A FOREIGN CAPITAL ENTERPRISE
N O T E S
The present application form should be signed by the investor himself, or by the legal representative of the enterprise, or by a representative authorized by both the above-mentioned two persons (the authorized representative shall submit a notarized letter of authorization.)
In the case that the investor is an individual, the blanks next to “Name of the Company” and “Legal Addresses” are to be filled with the individual’s name and his/her home address.
The item of “Composition of the Board of Directors” is for the name list of the first board of directors.
Except for the noted items, all the other items and all attachments of the application form should be filled in Chinese.
The present application form and all its attachments should be submitted in four copies.
INFORMATION CONCERNING THE COMPANY APPLYING FOR THE ESTABLISHMENT OF A FOREIGN CAPITAL ENTERPRISE (HEREINAFTER THE “COMPANY”)
1ï¼ŽæŠ•è³‡è€…åç¨± Name of the Company
2ï¼Žæ³•å®šåœ°å€ Legal Addressï¼š
å…¶ä»–åœ°å€ Other Address (if any)
Country or Jurisdiction of Incorporationï¼š
Date of Incorporationï¼š
5ï¼Žæ³•å®šä»£è¡¨å§”å Name of the Legal Representative
Scale of Productionï¼š
Countries Where Investment Has Been Madeï¼š
Name of the Contact Person for Company in Chinaï¼š
THE FOREIGN CAPITAL ENTERPRISE TO BE ESTABLISHED IN CHINAï¼š
1ï¼Žå¤–è³‡ä¼æ¥åç¨± Name of the Foreign Capital Enterpriseï¼š
Total Amount of Investmentï¼š
Amount of Registered Capitalï¼š
Form of Investmentï¼š
Deadline or Schedule for Collection of Investmentï¼š
Land Surface Area and Building Surface Area Neededï¼š
Materials and Their Sourcesï¼š
Market for Salesï¼š
Management of the Foreign Capital Enterprise
Composition of the Board of Directorsï¼š
Management Offices and Senior Staffï¼š
System of Financial Affairs and Accountingï¼š
Total Staff and Workersï¼š
Foreign Staff and Workersï¼š
CONSTRUCTION AND IMPLEMENTATION OF THE PROJECT
Technology to Be Used in Carrying out the Projectï¼š
Machinery and Equipment to Be Used for the Projectï¼š
The Volume of Water, Electricity, Gas, Fuel, etc. Which Will be Needed by the Projectï¼š
The Standard of the Treatment of “Three Wastes” and the Security Standardï¼š
Schedule of Planned Constructionï¼š
Staring Date for Productionï¼š
Quantity of Products Planned in the First Three Years of Productionï¼š
Principal Raw Materials to Be Purchased in Chinaï¼š
TERM OF OPERATION OF THE FOREIGN CAPITAL ENTERPRISEï¼š
THE COMPANY HEREBY AGREES TO THE FOLLOWING CONDITIONS FOR THE ESTABLISHMENT OF THE FOREIGN CAPITAL ENTERPRISEï¼š
All activities of the foreign capital enterprise shall comply with and be protected by the laws, degrees, and relevant regulations of the People’s Republic of China.
The foreign capital enterprise shall pay the relevant taxes in accordance with the laws, degrees and relevant regulations of the People’s Republic of China.
Articles of association of the foreign capital enterprise
Evidence of incorporation of the company (copy)
3ï¼Žå¤–è³‡ä¼æ¥å¯è¡Œæ€§ç “ç©¶å ±å‘Š;
The report of feasibility study for the foreign capital enterprise
Capital and credit certificate on the investor made out by the investor’s bank
A list of the raw/auxiliary material, machinery and equipments, office apparatus and transportation means (including the name of the article, the modal and specifications, the unit price and the total value) to be imported by the foreign capital enterprise.
As Vice President, Engineering in the Magnetics Division at Spang and Company for 13 years, Bruce Mitchell’s responsibilities included overseeing strategic business growth, production capacity maximization, plant expansions, maintenance, engineering and environmental initiatives. He managed department managers, a staff of buyers, project managers, designers, and electrical, mechanical, civil, and environmental engineers. He oversaw the Division’s global facilities and manufacturing equipment installations. Through his department equipment was identified and purchased. He was also responsible for the design and fabrication of in-house testing and automation equipment. From 2003 to 2012 he had overall responsibility for the relocation of all manufacturing to China. Potential locations were identified and selected, Chinese equipment was sourced and purchased and installed in a pilot operation in parallel with the design and construction of a new Greenfield plant and later expansion into a second facility. The Asian expansions required the creation of two wholly-owned foreign enterprise. From his experiences he wrote and had published by Palgrave MacMillan in 2012, “13 Steps to Manufacturing in China, The Definitive Guide to Opening a Plant, From Site Location to Plant Start-Up”. Purchase from Amazon. Bruce held numerous engineering supervisory and managerial roles at Honeywell Corporation from 1974-1989. Mr. Mitchell received his Bachelor and Master of Science degrees in Mechanical Engineering from Virginia Polytechnic Institute & State University (Virginia Tech), Blacksburg, Virginia and a Master of Business Administration from Virginia Commonwealth University, Richmond, Virginia.