Shanghai Company Registration – FAQs
Q: What is the service coverage of Evershine in Shanghai Company Registration?
*International Tax planning
*Company Registration
*Work Permit Application
*China Z-Visa Application
*Work Certificate Application,
*Residence Permit Application
*Food and Drink Business Permit and License Application
*Medical Device Business Permit and License Application
*ICP (Internet Content Provider) Permit and License Application
*Domain Name (.cn) Application
*Other Special Industry Permit and License Application
Q: How to assess what kind of entity to register in Shanghai?
| With Tax ID? | Issues Sales Invoices? | Legal Entity? | Wholly Owned by a Foreigner? | |
| Representative office | Yes | No | No | Yes |
| Service WFOE | Yes | Yes | Yes | Yes |
| Trading WFOE | Yes | Yes | Yes | Yes |
| Manufacturing WFOE | Yes | Yes | Yes | Yes |
| Joint Venture (with Local Partner) | Yes | Yes | Yes | No |
1) Representative Office
1.1 RO can be used to pay out expenditures to vendors and employees.
1.2 Its aim is to handle the issues with payroll compliance when recruiting employees.
1.3 Not allowed to issue local invoices.
1.4 Sales are directed to the parent company.
1.5 It must confine its activities to the acting liaison office on behalf of its parent company.
2) Service WFOE
2.1 Legal entity and independent Chinese domestic company, but wholly owned by foreigners.
2.2 Suitable for a business to provide services like consultation, software, design etc.
2.3Can issue sales invoices with 5% or 3%. Or a more different tax rates in terms of what activity the transaction is.
2.5 May be used to pay out all expenditures.
2.6 It needs to obtain approval from 6 relevant Government Authorities in Shanghai.
2.7 Some industries would require special approval from more authorities.
3) Trading WFOE
3.1 Legal entity and independent Chinese domestic company, but wholly owned by Foreigners.
3.2 Includes the buy-and-sell of goods, excluding manufacturing goods.
3.3 May also provide service.
3.4 Can issue VAT invoices with 13%, 9%, or 6%. Or more different tax rates in terms of what activity the transaction is.
3.5 May be used to pay out all expenditures.
3.6 It needs to obtain approval from 6-8 relevant Government Authorities in Shanghai.
3.7 Some industries would require special approval from more authorities.
4) Manufacture WFOE
4.1 Legal entity and independent Chinese domestic company, but wholly owned by foreigners.
4.2 Manufactures goods.
4.3 Includes the buy-and-sell of goods
4.4 May also provide service.
4.5 Can only issue VAT invoices with 13%, 9%, or 6%. Or more different tax rates in terms of what activity the transaction is.
4.6 May be used to pay out all expenditures.
4.7 It needs to obtain approval from 8-10 relevant Government Authorities in Shanghai.
4.8 Some industries would require special approval from more authorities.
5) Joint Venture with Local Partner
5.1 It is a legal entity and independent china domestic company.
5.2 China natural persons or existent companies can directly be your local partner.
5.3 It can be in the Service industry, or Trading Industry or Manufacturing industry.
Please note that if the company register place is over 300sqm, special approval from the fire department is needed.
Q: What is the minimum capital of a Shanghai WFOE?
There is no limit on capital amount, but in practice, Service WFOE’s minimum capital is RMB100,000 as required by the Local Foreign Investment Bureau.
While the minimum capital of a Trading WFOE is RMB 500,000 as a requirement of the Local Foreign Investment Bureau.
As for how much capital will pass, it will depend on the trading products and business activities you put into your business scope; the more products you offer, the higher registered capital will be required.
Q: Who can be shareholders, directors/legal representatives and supervisors?
Any foreign individual or entity can be a shareholder. However, Chinese citizens can not be one of your shareholders, only Chinese local companies. A legal representative, manager, and supervisor are needed to register a new company in China. They can be foreigners or Chinese locals. The legal representative and manager can be the same person although the supervisor must be independent.
Q: Who are the legal representative and supervisor? What kinds of roles do they undertake?
The legal representative is the main principle of the company who holds the legal power to enter into binding contracts and obligations on behalf of the entity in accordance with the law or the Articles of Incorporation. His/her acts are binding with the entity when entering into a contract.
The main role of the supervisor is to safeguard and supervise the smooth and lawful operation of the company. The law has delegated him/her rights such as inspecting the company’s finances, supervising the company directors and senior managers, recommending dismissal of directors etc.
To act as the legal representative/supervisor he/she shall not satisfy any of the following conditions and, in practice, the company registry authority will also review those conditions:
(1) Without civil capacity or with only limited civil capacity;
(2) Pursued with criminal punishment or other criminal compulsory measures;
(3) Ordered for arrest by public security bureau;
(4) Been sentenced to any criminal punishment due to an offense of corruption, bribery, encroachment, misappropriation of property or disrupting the economic order of the socialist market and five years have not elapsed since the completion of the execution of the punishment;
(5) Was a former director, factory director or manager of a company or enterprise which was bankrupt and liquidated, whereby he/she was personally liable thereof, and three years have not elapsed since the bankruptcy and liquidation;
(6) Was a legal representative of a company/enterprise, but the business license thereof was revoked and this company or enterprise was ordered to close due to violation of the law, whereby he/she was personally liable thereof, and three years have not elapsed since the revocation of the business license; or
(7) Has a relatively large amount of debt which is due but unclear.
Q: What kinds of work permits and china visas can be applied when completing a set up of WFOE?
Apply Work Permit-> Apply Z visa (employment visa)-> Apply Work Certificate-> Apply for Residence Permit
Each shareholder in your WFOE, as investors, can apply Work Permit, China Z-visa, Work Certificate, and Residence Permit. Their spouses and children may accompany them.
If your employees would like to apply for China Z visa, a Service or Trading WFOE with a minimum capital of RMB 3million will be qualified. While a Manufacturing WFOE will only be required of RMB 1million.
Work Permit: To get a work permit, you need to provide a foreigners’ resume and qualifications certificate (degree certificates and professional skills qualification certificate and two years or above related working experience); valid passport photocopy; health certificate issued by the Chinese embassies, consulates, the authentication of the foreign medical organization or the Chinese government-appointed health and quarantine departments.
Z-visa: Issued to those coming to China for employment. To get a Z-visa, you’ll need to submit a Work Permit or a Foreign Expert’s License, obtained by the company in China you will be working for, and a letter of invitation from your employer, as well as the marriage certificate and birth certificates for accompanying spouse and children, respectively. In the application for Z-visa, foreigners shall be depending on different situations, provide the Foreigner Employment Permit of People’s Republic of China (obtained from labor and personnel departments of province, autonomous regions, or municipalities directly under the central government by employer organizations in China), or a company representative certificate in China, or a telegram from an authorized organization, or approval from Ministry of Culture of People’s Republic of China, or visa application letters issued by foreign affairs office of province, autonomous regions or municipalities directly under the central government.
Work Certificate: Obtained from labor and personnel departments of the province.
Residence Permit: It is not the visa but the residence permit that gives you the legal right to live in China. Once you arrive in China, you’ll have 30 days to secure your residence permit. Your initial visa will expire within a few months, but your residence permit will function like a multiple-entry visa, allowing you to leave the country and return without an additional visa as long as the permit is valid. The Foreigner Residence Permit, typically good for one year and renewable annually, is a standard issue for the majority of foreigners working in China, though some (such as company executives, legal representatives, or investors) qualify for a permit that is good for two years. With a valid residence permit, you are allowed to leave the country and return, even if your initial entry visa has expired. Accompanying spouses and children are given the same type of visa and residence permit as the one who will be employed in China, though each family member will have to fill out an individual application and pay the application fees. If the stork should find you in China, you’ll need to bring your new baby’s birth certificate to the local PSB for registration.
If you have an employment visa and residency based on a family member’s employment, you may find your own employment while in China. However, your new employer will then have to register your employment and file the necessary paperwork to make it legal.
Q: What are the service charges and out-of-pocket expenses?
Setting up a Service WFOE is US$2200, Trading WFOE is US$3000 & a manufacturing WFOE is US$4000. Aside from out-of-pocket expenses which are about US$200-US$400. The aforementioned fees exclude the special permit application fee.
If you need us to arrange a virtual registered office for the trading industry, where it’s allowed to issue General GUI (General Unified Invoices), it will be a one-time charge of RMB20000 for the first 12 months (about US$3200).
For the service and consultation industry, it’s a one-time charge of RMB10000 for the first 12 months (about US$1600).
For the application of Work permit, Z-visa, Work Certificate to Resident Certificate, a service fee will be in one application per person (USD700). For dependents, service fee = USD700+(applicant number minus first one)*USD300. Government fees (RMB2000 = USD333) for each applicant shall apply.
Out-of-pocket expenses: handling fees during company set up including transportation, stamp, express, etc.
The final fee breakdown will be included in the signed Engagement Letter.
Q: How can Evershine serve you? What are the processes?
The procedures to register a WFOE (Wholly Foreign Owned Entity) are:
Require → Consult → Engage → Register
We always allow Taipei HQ staff to join the consulting period until the Engagement letter signing as company structure is usually relevant to international tax planning issues. Evershine will provide general information, if thorough research is required, an hourly rate of US$100 shall apply.
Based on our internal SOP, we need to do the so-called KYC (Know your Client) to check if we are capable to serve you and how to meet your expectations.
Engagement Letter will include all the detailed procedures, required documents, service fees, out-of-pocket expenses, etc.
After your signing of the Engagement Letter, a retainer fee shall be required.
Then, our Shanghai staff will execute registering procedures.
During the execution period, we will use the BPM (Business Process Management) system to monitor service-delivery time and documents’ quality.
After finishing the company registration, we will bill you the final service fee and out-of-pocket expenses.
Question: After getting a company license, what kinds of services Evershine can provide?
After-Set Up Cloud Accounting, Tax and Payroll Compliance Services:
*Accounting service using Cloud collaboration system
*Cashier role as ”Maker” in your internet-banking account
*China Tax Compliance services
*Payroll Compliance services
We will act as your in-house accountant in your Shanghai subsidiary. When you adopt our services, we will use our proprietary Cloud platform to build up a collaborative working environment among your staff and Evershine staff.
Any authorized person can key-in, review, approve and query anytime, anywhere!
We use BPM Business Process Management) system to monitor service quality including on-time delivery and correctness. Our business model has been providing very high-quality services at a competitive cost. Several hundreds of MNCs (Multi-National Companies) are our clients. The client list will be provided upon request.
For more information, please don’t hesitate to contact us. You can also visit the website to learn more: http://evershinecpa.cn/ Shanghai-wfoe-accountant
Q: Where are the service territories of Evershine?
Evershine has its 100% owned office to provide you services in:
Taipei, Beijing, Shanghai, Xiamen, Hangzhou, San Francisco, Seoul, UAE
We have been catering our services with our partners in:
Kaohsiung Taiwan, Singapore, Hong Kong, Seoul Korea Tokyo Japan, Hangzhou China,
Nanjing China, Guangzhou China, Kuala Lumpur Malaysia, San Francisco USA
We can arrange co-serving partners for other locations not mentioned above, please click the links to find out more: IAPA Members and LEA Members. There are many Evershine CPAs Firm associates around the world. We have around 980 firms with 38,000 employees in about 450 cities. If your firms are located in the above-mentioned cities, we can serve you right away.
Please send email to HQ4sha@evershinecpa.com
Q: Where is the location of Evershine in Shanghai?
Shanghai Evershine BPO Service Corp.
Room 705 7F Building B, No. 288, Hongjin Rd.,
Minhang District, Shanghai, PRC 201103
Located near MRT Line #10
LongPo New Village Station (地鐵10號線,龍柏新村站)
Q: How to expedite Shanghai Company Registration processes?
Please send an email to sha4ww@evershinecpa.com with answers to the below questions:
1) What is your business category? Is it Service, Consultation, Trade or Manufacture?
2) What are your business items? We need to assess if it requires a special permit industry.
3) What is your business model? What is your revenue source? Please send a link to your website.
4) How are your shareholders composed? Where is your parent company established? Are the shareholder’s companies or individuals?
5) Do you have your own registered address already? If not, how much time do you need to locate your own address? Do we need to arrange a virtual registered office for you during the initial period?
6) What are your company phone numbers and your personal phone number? We may discuss over the phone, if necessary.
Contact Us
Shanghai Evershine BPO Service Corp.
Room 709, No.96, Lane 1333, Xinlong Road.,
Minhang District, Shanghai, PRC, 201101
Tel. No.: +86-21- 6402-0100
E-mail: sha4ww@evershinecpa.com
or
Call us by phone in the day-work-time of China (GMT+8)
Manager Bing Weng, UK Graduate School Alumni and a well-English speaker
Mobile: +86-180-5008-2372
or
For investment structure relevant with multi-national tax planning and Financial & Legal Due Diligence for M&A (Merge and Acquisition), send an email to HQ4sha@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable to your case.
Email address:dalechen@evershinecpa.com
linkedin address:Dale Chen
Additional Information
Evershine has 100% affiliates in the following cities:
Headquarter, Taipei, Xiamen, Beijing, Shanghai,
New York, San Francisco, Houston, Phoenix
Tokyo, Seoul, Hanoi, Ho Chi Minh,
Bangkok, Singapore, Kuala Lumpur, Jakarta, Manila,
Melbourne, Sydney, New Delhi, Mumbai,
Frankfurt, London, Toronto.
Other cities with existent clients:
Miami, Atlanta, Oklahoma, Phoenix, Michigan, Seattle, Delaware;
Berlin, Stuttgart;Paris;Amsterdam; Prague; Czech Republic; Bucharest;
Bangalore; Surabaya;
Kaohsiung, Hong Kong, Shenzhen, Donguan, Guangzhou, Qingyuan, Yongkang, Hangzhou, Suzhou, Kunshan, Nanjing, Chongqing, Xuchang, Qingdao, Tianjin.
Evershine Potential Serviceable City (2 months preparatory period):
Evershine CPAs Firm is an IAPA member firm headquartered in London, with 300 member offices worldwide and approximately 10,000 employees.
Evershine CPAs Firm is a LEA member headquartered in Chicago, USA, it has 600 member offices worldwide and employs approximately 28,000 people.
Besides, Evershine is Taiwan local Partner of ADP Streamline ®.
Please send an email to HQ4sha@evershinecpa.com
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