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Registration of a Shenzhen FICE - Procedures and Fees

 

Unless otherwise indicated, the FICE mentioned in this quotation refer to a limited liability company formed and registered in Shenzhen, China in accordance with the China Company Law and the related regulations and wholly owned by one or more foreign companies or individuals. A FICE in the form of a limited liability company is by far the most popular investment vehicles in China amongst foreign investors. 

 

Summary

 

This quotation applies to situations where a foreign investor intends to set up a company in Shenzhen, China to carry out the business of a trading nature, including retailing, wholesaling, import and export, distribution and agency and that nothing special license or permit other than the business license is required. A foreign-invested company registered in China for the purpose of carrying out the fore-mentioned activities is commonly known as a “FICE”.

 

Our fees for handling the formation and registration of a FICE in Shenzhen, China are USD2,000 which cover the services listed in Section 1(1) of this quotation. Our service fees, however, do not include the payment official registration charges, setting up Internet Banking Facility, legalization of identity documents of the shareholder/member of the FICE.

 

The materials required for the registration of a FICE in Shenzhen mainly include legalized identity documents of the shareholder/member, a lease agreement of the office space to be used by the FICE. A detailed list of the materials is detailed in Section 4 of the quotation.

 

The whole process for the registration of a FICE in Shenzhen, China takes 12 to 18 weeks. It should, however, be noted that most of the procedures are subject to approval by the government departments and therefore some of the procedures may take longer than expected.

 

If the business activity to be conducted by the FICE requires a special license or permit, we may need to adjust our fees and the time required may need to be extended accordingly.

 

1.      Estimated Service Fees and Costs

 

(1)     Registration Service Fees

 

Our fees for handling the registration of a FICE in Shenzhen, China are USD2,000. In particular, our fees cover the following services:

 

(1)  Preparation of registration application documents;

(2)  Performing the name availability search;

(3)  Application for approval of name;

(4)      Application for a business license;

(5)  Carving of company chops and personal chop of the legal representative;

(6)  Application for MOFCOM registration;

(7)  Setting up an RMB basic bank account;

(8)  Handling foreign exchange registration;

(9)  Setting up a capital account.

 

In any case, where the products to be traded by the FICE requires a special permit or license, we may need to revise our fees accordingly.

 

(2)    Official Filing Fees

 

Our service fees stated in Section 1 (1) do not cover any official filing fees. The estimated official filing fees shall be around USD400. The official filing fees will be billed with supporting official receipts.

 

(3)     Legalization Costs

 

Our fees stated above also do not cover the legalization of the identity documents of the shareholder/member of the Shenzhen FICE. Kaizen is able to arrange the legalization of identity documents for company or individual registered or resided in Hong Kong, Singapore, Taiwan, British Virgin Islands, Cayman Islands, and Bermuda and a few other countries. Fees for legalization will be quoted upon request.

 

(4)     Internet Banking Facility

 

Our service fees stated in Section 1 (1) cover the setting up of a bank account for the new FICE, however, it does not cover the application of internet banking facility. Should you decide to engage us for the above service, we will charge a fee of USD300.

 

(5)    Additional Foreign Currency Account

 

Our service fees stated in Section 1 (1) cover the setting up of a basic RMB bank account and a capital account for the new FICE. However, it does not cover the setting up of any additional accounts. If the FICE will receive foreign currency payment from overseas, then you must open a foreign currency general settlement account accordingly.  Should you decide to engage us to set up an additional account, we will charge a fee of USD300.

 

(6)     Translation Costs

 

Our service fees stated in Section 1 (1) do not cover translation costs for translating the documents prepared by you from English to Chinese or translation of registration documents from Chinese to English. If so required, we will charge an extra amount of USD55 per page of A4 size paper for the translation services.

 

(7)    Foreign Trade Operator Registration Fees

 

A FICE is required to complete the following Foreign Trade Operator Registration procedures before it is allowed to conduct import and export business in its own name. Our scope of services:

(a)     Handling customs registration procedures;

(b)     Filing Foreign Trade Operator Registration Form with the Commerce Bureau;

(c)     Handling E-Port registration procedures;

(d)     Handling registration with Administration Bureau for foreign exchange;

(e)     Handling inspection and quarantine registration.

 

The whole procedures will be completed within one month if everything runs smoothly.

 

Our fees for the above services are USD800, which do not cover government charges estimated to be around USD250.

 

(8)   VAT General Taxpayer Qualification Application Fees

 

A FICE is considered as a VAT small scale taxpayer when it is incorporated.  If you want to be treated as a VAT general taxpayer, then you shall apply for VAT general taxpayer qualification accordingly. Kaizen could also help you to apply for such a qualification. Our fees for handling the application for VAT General Taxpayer Qualification are USD550.

 

All the fees quoted above do not include the Value Added Tax and Surcharges of 7.5% if the Chinese tax invoice (Fapiao) is required.

 

A summary of the fees stated above is provided in Schedule 1 to this quotation.

 

2.     Payment Terms and Methods

 

Upon receipt of your order, we will issue an invoice to you for your settlement. We require full payment in advance.

 

If China’s mainland or Taiwan official tax invoice is required, Value-Added Tax or Business Tax at the prevailing rate in the respective jurisdiction will be charged.

 

 

3.     Basic Structure of a FICE in Shenzhen

 

The minimum requirements of a FICE in Shenzhen, China are as follows:

• One shareholder, one director, one general manager, one legal representative, one supervisor and one finance controller
• The shareholder can be a natural person or corporation
• Director must be a natural person with no restriction on nationality
• The general manager must be a natural person with no restriction on nationality
• The legal representative must be a natural person with no restriction on nationality
• The legal representative shall be served by the chairman of the board (if the board of directors is set up), or executive director (if it is a sole director), or general manager
• Natural person shareholder can be appointed as director
• Supervisor must be a natural person with no restriction on nationality, however, director or general manager cannot serve as a supervisor at the same time
• Finance controller must be a natural person with no restriction on nationality, however, the legal representative cannot serve as a finance controller at the same time

 

4.      Required Documents and Materials

 

The following materials are required for the registration of a FICE in Shenzhen:

 

(1)     Name of the company to be registered

 

The name of the company to be registered in Shenzhen must follow the format “Business Name + (Shenzhen) + Principal Business Activity + Limited” or “Business Name + Principal Business Activity + (Shenzhen) + Limited” or “Shenzhen + Business Name + Principal Business Activity + Limited”.

 

For example, “Kaizen (Shenzhen) Trading Limited” or “Kaizen Trading (Shenzhen) Limited” or “Shenzhen Kaizen Trading Limited”.

 

The name of the company must be in Chinese. The English name cannot be registered. Please provide the proposed name and at least 2 alternatives.

 

 

(2)     Tenancy Agreement

 

 

One set of original Tenancy Agreement and Leasing Certificate of the office premise to be used by the proposed FICE.

 

 

 

(3)    Particulars of the Shareholder

 

 

If the shareholder of the Shenzhen FICE is another company, please provide the particulars of that company, including the principal business activities, business address, contact numbers and name and nationality of its managing director.

 

 

 (4)   Legalized identification documents of the shareholder

 

One set of legalized identity documents of the foreign shareholder of the proposed FICE. If the shareholder is a corporation, the identity documents required to be legalized are its incorporation documents. In the case the shareholder is an individual, the identity document required to be legalized is his/her passport (for foreigner) or mainland travel permit (for Hong Kong, Macau and Taiwan resident). The investor’s identity or incorporation document shall be legalized by the Chinese Embassy or Consulate in the country where the investor is resided or registered.   

 

 

(5)     Shareholding Structure and Ultimate Beneficiary Owner

 

A shareholding structure and particulars of the ultimate beneficiary owner of the FICE.

 

(6)     Legal Representative

 

A photocopy of the identification document (i.e. passport for foreigner or identity card for Chinese national), email address, China mobile number and full residential address of the legal representative.

 

(7)     Director(s)

 

A photocopy of the identification document (i.e. passport for foreigner or identity card for Chinese national), email address, China mobile number and full residential address in respect of each director.

 

 

(8)    Supervisor, Finance Controller and General Manager

 

A photocopy of the identification document (i.e. passport for foreigner or identity card for Chinese national), email address, China mobile number and full residential address of the supervisor, finance controller, and the (general) manager.

 

(9)    Amount of Investment/Registered Capital of the Shenzhen Company

 

The total amount of investment of the FICE, including:

 

(a)    the amount of registered capital.;

(b)    method and time limit of the contribution of capital.

 

 

(10)  Scope of Business

 

 

A summary of the scope of business and the scale of business of the proposed FICE, including its business model, locations of suppliers and customers, products to be imported, exported or distributed.

 

 

(11)  Particulars of Preferred Banker

 

Please provide the name of the preferred bank and the designated branch at which the bank accounts of the Shenzhen FICE is to be established.

 

Please note the legal representative of the FICE is required to visit Shenzhen to open the bank account. The bank officers will go to your office to conduct a site inspection when you submit the application to them.

 

5.      Procedures for Establishing a Shenzhen FICE

 

(1)        Preliminary

 

(a)    Lease of Office Space

 

Firstly, the investor will have to enter into a tenancy agreement in relation to the office space to be used by the FICE for a term of not less than 12 months. The office must be located in a commercial building.

 

(b)    The legalization of Identity Documents of the Shareholder

 

The investor is also required to arrange to have the identity documents of the shareholder legalized by the Chinese Embassy or Consulate in the country where the shareholder is registered/resided. 

 

(c)     Other Documentation

 

The investor at the same time needs to prepare other documents, such as photocopies of the passport/identity card/China’s mainland travel permit of the director, supervisor, legal representative, finance controller, and (general) manager.

 

(2)        Application for Registration of FICE

 

(a)    Name Search and Reservation

 

The registration process of a FICE starts with a name availability search. Kaizen will perform a name availability search with Shenzhen Market Supervision Administration (MSA). If the search indicates that the preferred company name is available for registration, Kaizen then applies for the reservation of the preferred name with Shenzhen MSA.  This is called "Name Pre-registration" in China. 

                      

(b)    Registration for Business License

 

Upon receipt of the approval for reservation of the preferred name of the FICE, Kaizen will then apply for a Business Licence for the FICE with Shenzhen MSA. It will usually issue the Business Licence within 3-5 working days after receiving all the required documentation. Once the business license is issued, the FICE is deemed to be a legal person duly organized and existing under PRC law and will have full operational rights to operate its business in China within its scope.

 

 (c)      Registration Record Filing with MOFCOM

 

Upon receipt of business license, Kaizen will then arrange the registration record filing with MOFCOM. MOFCOM local branch will usually issue a registration record receipt within 3-6 working days after receiving all required documentation.

 

(3)        Post Registration Stage

 

(a)    Carving of Company Seal and Chops

 

Application for Approval for making of Office Stamp (Office Seal) from the Public Security Bureau and arrange the carving the company seal and chops.

 

(b)       Foreign Exchange Registration

        

Application for registration with the Administration Bureau for Foreign Exchange.

 

(c)    Opening of Bank Account

 

Opening of one capital account and one RMB basic account with the bank selected by the client.

 

(4)        Extra Procedures for FICE

 

(a)   Foreign Trade Operator Registration

 

The FICE is required to complete Foreign Trade Operator Registration procedures before it can conduct import and export business in its own name.

 

(b)   VAT General Taxpayer Qualification

 

A FICE is considered as a VAT small scale taxpayer when it is incorporated.  If you want to be treated as a VAT general taxpayer, then you shall apply for VAT general taxpayer qualification accordingly.

 

6.     Certificates and Materials obtained after Registration

 

        After the FICE is officially registered, it will obtain the following certificates and documents to prove its legal existence and to carry out its daily operation.

 

(1)    Business Licence (Original, Duplicate) 

(2)    FICE Registration Record Receipt

(3)    Bank Account Opening Permit and Other Bank Stuffs

(4)    Foreign Exchange Registration Permit

(5)    Company Seal, Financial Seal, Legal Representative Seal, Customs Seal, and Fapiao Seal

(6)    Foreign trade operator registration related certificates and cards.

 

7.    Estimated Time Frame

 

It is estimated that the whole registration process would take around 12 to 18 weeks, subject to the schedule of the investor and also the approval by the various registration authorities in Shenzhen. The table below shows the estimated time frame for each of the steps for the registration.

 

Step		Description	Who is Responsible	Working Days
Preliminary
1		The legalization of identity documents of the investor	Investor	Investor’s schedule
2		Tenancy agreement (for the office to be used by the FICE)	Investor	Investor’s schedule
3		Other documents	Investor	Investor’s schedule
Application for Registration
4		Perform name availability search	Kaizen	1
5		Name pre-registration	Kaizen	1
6		Application for FICE business license	Kaizen	3-5
7		MOFCOM Registration and Record	Kaizen	3-6
Post Registration Procedures
8		Application for approval and carving of company seals	Kaizen	2
9		Opening of RMB basic account	Kaizen	20
10		Perform foreign exchange registration	Kaizen	10
11		Opening of capital account	Kaizen	10
				Around 12-18 weeks
Additional Registration Procedures
12	Foreign trade operator registration		Kaizen	20
13	Application for VAT general taxpayer qualification		Kaizen	5

 

8.      Compliance Requirements of a FICE in Shenzhen

 

Immediately after a FICE is officially registered in Shenzhen, it is required to comply with various monthly, quarterly and annual filing and reporting requirements. These filing requirements include monthly tax filing, filing of annual audit report, which has to be issued and signed off by a local CPA firm, filing of annual tax reporting to the Shenzhen State Administration of Taxation and filing of annual reports to the competent government authorities, etc. In any case, if any of these annual compliances are not handled in a timely manner, the FICE may subject to penalties or at the risk of getting their license suspended or canceled by the MSA.

 

Kaizen is well equipped with experienced personnel and capable of providing all the services that your Shenzhen FICE may need, including but not limited to monthly book-keeping, preparation of tax computation and filing of various tax returns and also performing annual tax clearance and etc.

 

9.      Real-Name Certification of the Legal Representative and Finance Controller

 

Provided the legal representative or finance controller of a FICE is a foreigner or Hong Kong/ Macau/Taiwan resident, then s/he is required to visit the local office of State Administration of Taxation (SAT) in person so as to enable the SAT to verify their China’s mainland travel permit. This is what we called real-name certification with the tax bureau. Failure to complete the real-name certification will affect the company’s tax-related matters, such as the purchase of Fapiao and application for the tax rebate, or in the worst scenario, may not be able to file tax returns, with the SAT.

 

Since the legal representative or finance controller is required to visit the SAT in person to perform the real-name certification, we would recommend that s/he should be accompanied by local staff, so as to avoid any language or communication problems. If you want us to send our staff to go to the SAT with your foreign legal representative or finance controller, we can also arrange for it accordingly. Our fees for the foregoing service are USD250 (tax exclusive).

 

10.    Application for Food Business License

 

In accordance with PRC regulations on food safety, a company engaged in trading and distribution of food products must apply for a food business license before it is allowed to carry relevant business activities. Kaizen could also help you to apply for such a license. Our fees for handling the application for food business license (for pre-packaged food) in Shenzhen are USD700. The time frame required is around 10-20 working days.

 

11.    Application for Class II Medical Devices Registration

 

In accordance with PRC regulations on the supervision of medical devices, a company engaged in trading and distribution of medical devices such as medical sterile gloves and masks must apply for class II medical devices registered with the Food and Drug Supervision Administration before it is allowed to carry relevant business activities. Kaizen could also help you to apply for such registration. Our fees for handling the application for class II medical devices registration in Shenzhen are USD800. The time frame required is around 5 working days.

 

Schedule 1 – Summary of Costs for Registration of FICE in Shenzhen

 

1. Registration of a FICE in Shenzhen

 

Item	Description	Amount  (USD)
1	Service fees for Company Registration (Note 1)	2,000
2	Official filing fees for Company Registration (Note 2)	400
3	Disbursements	80
4	Service fees internet banking facility application (Optional)	300
5	Application for an additional foreign currency account (Optional)	300
6	Legalization fees for the investor (Optional)	TBC
7	Translation fees (Optional)	TBC
TOTAL		3,080

 

2. Additional Registration Procedures

 

Item	Description	Amount USD
1	Application for Foreign Trade Operator Registration	800
2	Official filing/registration fees for Foreign Trade Operator Registration (estimated)	250
3	Application for VAT General Taxpayer Qualification	550
4	Real-name Certification of the Legal Representative / Finance Controller	250
5	Application for Food Business License (for pre-packaged food)	700
6	Application for Class II Medical Devices Registration	800
TOTAL		3,350

 

Note:

1.    If the business to be conducted by the FICE in Shenzhen requires special license or permit, Kaizen can handle the application and our fees will be quoted upon request.

2.    The government fees will be collected before the commencement of services and any shortfall will be billed after completion of registration of the FICE.

3.    Item 4 to 7 will only be incurred if we are being engaged for such services.

4.    If the Chinese tax invoice is required, a Value Added Tax and Surcharges of 7.5% would be applicable.

 

 

If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:

Tel: +852 2341 1444

Mobile: +852 5616 4140, +86 152 1943 4614

WhatsApp/ Line/ Wechat: +852 5616 4140

Skype: kaizencpa

Email: info@kaizencpa.com