Review:HIBC – Laws and Policies of Foreign Investment in China

HIBC – Laws and Policies of Foreign Investment in China

As China’s economy continues to grow, more and more people are looking towards this industrious country to take advantage of its investment prospects.

Entrepreneurs and investors alike are crowding to park their wealth here and get in on the high growth opportunity. Hosting this event seemed to us like the perfect opportunity to help interested parties learn more about how to make this desire a reality.

Thank you to all the business professionals and aspiring entrepreneurs who took advantage of the valuable information provided by Anita Wang and her team of highly skilled legal consultants. Much was learned from the hour long presentation on legal policies foreigners must recognize prior to business set up in China, business cards were exchanged while new alliances were created during the networking session, and those questions that have been keeping you up at night were finally answered during the Q&A segment. Some key takeaways from this event include; best practices for setting up WFOE, labor laws and tax considerations.

Our guest speaker, legal expert Anita Wang, is a Senior Partner Lawyer at P.C. Woo and Zhonglun W.D. LLP. She graduated with a Masters in Law and is a Certified Tax Agent practicing in Guang Dong Province. The insights she provided during this event were extremely relevant to anyone serious about setting up business in China. The following points are just a summary of the information received during the event. If you have any questions about how this information relates to your business; more detailed information can be received by reaching out to our supportive team here at HIBC. Our door is always open!

What type of business entity is usually best for foreign investment? Well… a WFOE of course! With the right guidance, WFOE setup can be easy as there is currently no capital requirement for setting up this type of business, except in  some special fields like banking or insurance industries relating with finance.  We suggest having a minimum of 100 – 150 thousand RMB available for your business endeavor to give yourself adequate room to operate, but you do not need to have these funds in your Chinese business bank account all at once. One common misunderstanding of the WFOE is that a Chinese partner is required for incorporation, which is untrue as a WFOE can be set up without a Chinese national. But maybe you do have a Chinese friend you know would make an excellent business partner… Great! The other common type of business structure that many foreigners also undertake and with a Chinese person is a Joint-Venture. Now that you have your business structure set up, it’s time to think about hiring the right people for the job.

Another major area touched on by Anita was labor law, where she raised some interesting points one must acknowledge. A commonly overlooked requirement of a Chinese labor agreement is that an employer must provide social security insurance for all employees. Anita noted that if you want to end a labor arrangement, you are responsible for paying the employee a severance of [n+1 (n= years)]. For example, if an employee works for the company for 3 years, to legally terminate the employment contract, you must pay the employee a severance of 4 months wages (3+1). Anyways, the severance is up to 13 months wages (12+1).   So now you have your business structure in place AND you have a team behind you BUT are you operating within policies set in place by the government?

The final key point Anita discussed with the group was tax considerations. As she points out, the majority of businesses are taxed at an Enterprise Income Tax rate of 25%, unless operating as a Micro business enterprise or certifited Hi-tech enterprise. Other major taxes to consider are the Value Added tax and the Withholding tax. Failure to comply with appropriate tax obligations can result in some severe punishments, such as lifelong imprisonment and enormous fines. HIBC can help set up and operate your business legally to ensure proper tax obligations are met so that you can focus on what you do best, expanding your business and brand.

The Q&A session was particularly constructive as attendees raised their concerns with Anita and Cassie (Founder of HIBC). The duo took turns filling the audience in on their areas of expertise, and often the whole group converged on a topic together. These are some of the questions that were answered during this productive session.

Digant Lakhani (Manager at Kiran Gems) asked:  “When can we inform employees if we want let them go before their contract ends?”HIBC: The employee can be fired anytime during probation, if they breach the rules of the contract such as: they are found to be doing another job that seriously impacts their formal work as a consequence or they commit a crime. Due diligence must be performed to make sure the employee cannot perform the job as specified. 
Pavel Drbalek  (Purchase Manager at Evrazio Center) asked: “Is it okay to register a WFOE with a virtual office?”HIBC: If the virtual office space can provide a leasing certificate (known as Red Book), as proof that business is operating within governmental jurisdiction. At HIBC, we provide the leasing certificate to purchasers of our virtual office space, giving your business a legitimate registered address from which to operate from. 
Mathew (Founder at Pandora Parties) asked: “Can my business be registered in Qian Hai Free Trade Zone but my office location be in another area?”HIBC: Yes, this is legal for companies registered in the Qian Hai Free Trade Zone as registration in this particular area provides special allowances. Setting up business in districts such as Luohu or Futian is perfectly legal despite the business being registered in Qian Hai.
Pax (Office Manager at BM1 Trading) asked: “Why do you need a Fapiao?”HIBC: A Fapiao is proof that a transaction took place and the tax has been paid. Unlike a regular receipt that anyone can write up, a fapiao contains the official seal of the government and registers that transaction within the tax system.
Yogev (Vice-general manager at Yuan Quan Hui) : “Why have I been advised that I should first register my company in Hong Kong and then use that company as the investor company to open a WFOE in China?”HIBC: Setting up a company in Hong Kong provides many benefits which include ease of startup, proximity to mainland China, a business-friendly tax system and the ability to easily receive payments from overseas. HIBC provides business setup services for both Hong Kong and mainland China. 

Remember that laws and policies in China are constantly changing, so be sure to stay up to date when new information is available or hire qualified professionals that will keep your business in compliance so that you can focus on what you do best. At HIBC, we strive to provide our customers with a work space tailored to fit their needs and provide the best possible resources to promote and grow their business. We are happy to provide our members with exclusive events that integrate with global business trends and client interests. We hope to see more of you entrepreneurs with exceptional motivation to succeed at one of our upcoming events. Stay posted for information regarding our upcoming events by following our official WeChat account.

At HIBC, we aim to create an inclusive ecosystem that acts as a catalyst for your business. With people from diverse backgrounds and sectors all under one roof, special ideas turn into special projects. We are proud to host unique events for our members that dive deep into the latest social, cultural, technological, and business developments. That way, our community constantly stays informed and at the front of the pack as well as becoming connected with new friends and partners that attendWe hold your start-up’s hand every step of the way and supply all the tools necessary for it to grow; from company set up,  tax accounting, IP rights and strategic partnerships.

    What we do:

– Co-working space/ Serviced Office/ Co-living space

– Relocation service

-Company Registration ( WOFE & HK company)

-Accounting and Tax

-HR Service

-Law Advice

Please scan the QR code to contact us!

Contact:

Tel/联系方式:+86-755-23823860

Email/邮箱:info@hibcsz.com

Web/网址:www.hibcsz.com

Weibo/ 微博:弘夏国际HIBC

Add/地址:

Room 3807~3809/1601, Block A, Xintian CBC building, Fumin Road, Futian,

深圳市福田区福民路新天世纪商务中心A座38楼3807~3809/1601

HIBC promotion 

Prmotion 1

Co-working Space Buy 1 Get 1 Free

HIBC Co-working Space

Limited Time Special Offer

Buy One Get One for Free!

1500rmb/desk/month

√ Pay for 1 desk get another desk for free.

√ Pay for 1 month get 1 month for free.

(you can enjoy one of the promotions above.)

 Promotion 2

Private office for 3 desks

¥4,800

Now is only ¥3,680/month  ALL FEES INCLUDED

( can provide Rental Certificate)

Prmotion 3 

20% OFF Address for registration &WOFE registration

 (All fees included + Rental Certificate)

Come here, you can make friends with people from different industries all over the world. We will hold an international business event regularly to make you work and networking together.

√ Futian CBD location, 1 min to 2metro lines, close to coco park

√ Large window, bright light, amazing view

√ Brand new western decoration,fully furnished

√ Free coffee, tea, High-speed Wifi support

√ 24/7 access

√ Flexible lease term, all fees included

√ One-stop expat business services: registration, administration, finance and tax, translation services.

Startup Mentor & Entrepreneur Daniella Santana

Written by Peter Fenton

Startup mentor and entrepreneur, Daniella Santana, first arrived in Shenzhen in 2005. The vibrant Brazilian has high energy, a generous spirit and real insight into the challenges foreigners face operating a business in China. Recently, Peter Fenton, from Evertop Legal Solutions, caught up with Dany between her keynote addresses, master of ceremonies duties, and running her own business.

Shenzhen Party (SP): What was your first impression of Shenzhen?

Daniella Santana (DS): When I first arrived in Shenzhen, there was not much going on in the city. The foreign community was very small and most of the people were in the export business. In those early days, I left and came back to China twice, but now I have lived in Shenzhen for a decade.

Shenzhen is a great place to start a career. Compared to some cities, there are still plenty of great opportunities for those who can offer certain skills and services. If you come to Shenzhen to start a local business, you have a great chance to succeed.

The rapid development of the city is what impresses me the most. When I first arrived, there was only Line 1 on the metro, which was half the length it is now. Today, the metro has 11 lines. The city now has a wide variety of restaurants, bars, five-star hotels, and lots of business and networking events.

SP: You have a wealth of experience in logistics and assisting companies with OEM. Based on what you are seeing, where do you see the trade opportunities in Shenzhen at the moment?

DS: Shenzhen has diversified and developed. The city has had a great number of startups, both in tech and in hardware, working on all kinds of projects. In terms of trade, the market with the most potential is to import products into China for the country’s growing upper and middle classes. The domestic consumer market is booming, especially for high-quality goods and healthcare products.

SP: You facilitated the first TEDx event in Shenzhen. What interested you the most about the TEDx experience?

DS: TEDx was one of the best experiences of my life. A few years ago, I decided I would like to give a talk at TEDx, but I could never have imagined that one day I would help to put together, what has so far been the best TEDx event in Shenzhen. Held at the Shangri-la Hotel, we had 150 people attending the event, with top speakers coming from all over the world including London. It was the first time that the foreign community could attend a TEDx event in Shenzhen.

What I loved most was, firstly, to organize my first ever live TEDx talk, and secondly, to provide the foreign community with a TEDx talk in English, which for many of them would also be the first time they attended such an event.

SP: What do you see as the opportunities and the challenges for women in business in China?

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DS: China is far ahead of many other countries and also gives more opportunities to people, no matter their age, race, or gender. As long as you can deliver a good job, you can have the world at your feet.

There have been few instances where I felt it was difficult to do business as a woman in China. Most of the experiences here have been overwhelmingly positive and have helped me to get to where I am in my career today. I don’t think I could have achieved what I did, if it wasn’t for China.

China inspires you to be an entrepreneur. There are so many opportunities to open your own business here, and this is very inspiring and empowering for women. In China, it’s very easy to meet and develop relationships. You may meet someone at a networking event today and next month you could be starting a business or working on an amazing project with this person.

For instance, we have the first international Female Book Club of Shenzhen since July last year. All the books are free and we read one book per month then meet at the end of the month to discuss what we have read.

All the books are meant to help the women with their development, both in their business and their personal life. This non-profit event has helped and inspired many women to start a business or to get back into business after many years of being a stay-at-home mother. For me, this is a great source of inspiration.

SP: You recently addressed the Cross-Border Summit in Shenzhen. What was it like and which topics did you address in your presentation?

DS: The Cross-Border is a great initiative from Mike Michelini, which helps entrepreneurs and business owners to fill in the gaps for those who have a cross-border business in Asia. It covers quality control, logistics, Amazon, import/export, among other important topics.

Additionally, I also recently participated in the first “women only” fireside chat alongside other amazing women who are doing incredible things in China. I was very flattered to be invited this year. We talked about the challenges women face in business, how we got to where we are, and we gave a few tips for female entrepreneurs on how to get started and how to pursue their dreams.

SP: You also assist with Startup Chile. What opportunities do you see Chile has in China?

 DS: At Startup Chile, I mentor female entrepreneurs on manufacturing in China and business development for the Asian market. Startup Chile is the number one accelerator in Latin America, and my idea is to help as many startups as I can to not only enter the Chinese market, but also create their prototypes and products here and export them to Chile.

Due to the free trade agreement between both countries, products coming from China are more competitive in Chile, and the same applies to Chilean products going to China such as wine, blueberries, and avocados. Also, I have been working closely with the Chilean Consulate in Guangdong to increase awareness of Chilean products in Shenzhen.

 

 

 

Ascension Into The Future Of Cross Border Business: Recap of Third Cross Border Summit

Saturday , April 21, 2018: Shenzhen, China

For 2 days, from Friday April 20 to Saturday April 21, Over 200 e-commerce business owners from both inside and outside of China assembled to take part in the third annual Cross Border Summit. Hosted by the organizations, Global From Asia, it was a conference to bring together top e-commerce business owners from all corners of the globe.

With over 40 top experts in the industry sharing strategies for optimizing your Amazon FBA listing to building an international brand and internet marketing (SEO) — the audience was filled with information and advice on how to take their e-commerce businesses to the next level.

Many international speakers had their first experience in China and Shenzhen. Brian Johnson , CEO and founder of PPC Scope , an American Amazon PPC expert had arrived to Shenzhen, China for the first time to speak at this conference. He was pleasantly surprised by the modern style of the city and the very positive minded sellers in the audience. Will Tjerlund, a top Amazon seller from Minneapolis, Minnesota also returned to share his story on scaling his business to over 2600 products in under six months . He enjoyed sharing his knowledge and the data he has gathered from his years on e-commerce and working with multi-million dollar brands in his consulting firm Goal Consulting.

The summit held a panel where we brought top international sellers such as Danny McMillan, host of Seller Sessions, Anthony Lee COO of Six Leafs, and Meir Simhi from Brand Masters to share the perspectives of the Western side of the sellers mind. Multiple sessions were quite amazing where we took top sellers and experts from both China and overseas and learned their tactics and strategies in a “head-to-head” format.

Michael Michelini, founder and host of the Global From Asia podcast said “We are so happy to bring together top leaders from around the world in the cross-border business industry. This is not your normal corporate gathering, we are here to make business deals, share actionable knowledge, and build long term relations with leaders around the world. We are growing to a new level as the industry matures and governments adopt new and more strict policies.”

“I skipped the after party in the first night to implement what I learned. Very valuable and actionable advice is what I would say this conference is all about.” Said Rolands, a Latvian B2B distributor based in Taiwan who is venturing into B2C e-commerce.

Chinese attendees also enjoyed their time at the third summit: My company is a cross border ecommerce business in China. It is my first time in Cross border Summit. First of all it is a great chance to know the different people from different countries. A good chance to know what foreign people think of China.” said Vicky from YKS Group.

More big sellers from Singapore were present “I definitely recommend coming to the summit to learn, enjoy the food, and build great relationships” said Daniel, an Amazon seller who had his first Cross Border Summit experience.

A highlight of this year’s summit was the announcement of the summit’s expansion into Latin America, with a major trade show planned for Q3 2019. On top of that, a new virtual reality China tour experience was debuted — so people from around the world can enter a Chinese factory, check it out at https://www.globalfromasia.com/vr/ and get in on the ground floor for a brand new way to find and verify Chinese factories.

Using Hong Kong For Your Import/Export Company

Looking for the right place to establish your import and export company? Hong Kong definitely should be one of your top choices! Let’s dig into why, what you’ll need, and how to put in place your business.

What Actions You Do For An Import and Export Company

First, what do you do with a trading company, or an import and export company. Breaking it down today into functions so that you can best find where to establish the corporation.

You will be:

  • Buying (Sourcing) products

    Sourcing is the common word here. You’ll be hunting through B2B directories like Alibaba and Global Sources. You will be going to trade shows and visiting factories. Building up a network of relationships with quality suppliers for you to buy in volume from. This will be for mass production. They will be doing production in at least 1,000 pieces (MOQ, minimum order quantity). You will order and pay an initial deposit so that they can get the materials and start the process. Most likely the countries you will be buying from are Mainland China and Southeast Asia. Maybe some India in there too.

  • Selling These Sourced Products

    Most likely you won’t be the one taking the end shipment. Instead you will immediately sell these products you sourced and then made your commission or your cut. You will be in charge of finding the quality suppliers. The big key is ensuring the manufacturing goes smooth and the products are of acceptable quality. Arrange the shipment to port and you’re paid. Most of the time your buyers are in the West like USA and Europe.

  • Office and sourcing staff

    You will employ, full-time or part time staff to help you manage the business. They could be in your customer’s market such as USA or Europe. They also could be on the ground in China working with the suppliers and logistics. If you are just starting out you may have freelancers helping out here plug holes. Soon you will get your volumes up big enough to have your own in-house team.

  • Travel and conference expenses

    You will be investing a lot of money in traveling and trade shows. You will need to often visit suppliers in China, and buyers in your target market. It is key to keeping your business stable and the main selling point and differentiator is your relationships.

Am I missing something?

Benefits of Hong Kong

A trading company and hong Kong are like 2 peas in a pod. With the rise of China, so has Hong Kong risen. And many companies, both in China and around the world, establish trading companies here to bridge China to the world.

Why?

  • It has English on all corporate and banking documentation. It leverages the British influence it learned as a British settlement.
  •  Foreign currencies – no problem! Having a multi currency bank account is normal. No need to have to force exchanges of all your incoming remittances to USD or Chinese Yuan. You’re free to operate in the currency(ies) that make you comfortable.
  • Chinese suppliers also have hong Kong companies and banks. A big one here is that a lot of times you can save big headaches by just transferring from your HSBC Hong Kong bank to their HSBC HK bank account. Same day, no fee, almost instantaneous. (See related post on Chinese suppliers also like HK companies)
  • Can operate in Chinese Yuan (RMB). Only Mainland china and Hong Kong have permission to hold this restricted currency. Pay your factories direct in the currency the operate in and hedge the foreign currency risk of USD/CNY

There are plenty more, but I’m sure you’re aware. These are the specific benefits for an import and export company.

Main Features You’ll Use

So what do you need to operate an import and export company via Hong Kong? Here we go:

  •  Bank Account

    Yup, you don’t have a business without a bank account. Unfortunately it has been getting harder to get a bank account (read related post). But once you have it, this is where you’ll be doing you’re buying and selling from. Most likely you’ll use HSBC – and most of your factories will have it too.

  •  Paypal

    I don’t recommend using Paypal to buy and sell from factories. Yet you may use it for purchasing small things online and paying freelancers. See our related post on Paypal Hong Kong guide.

  •  Accounting Software

    Well every business needs it. I’m a Quickbooks Pro Advisor in HK, and I do feel it stands out here as it integrated with HSBC online banking – see full post . You should also use this software to create purchase orders for suppliers and invoices for buyers. Keep track of all income and outcome here to manage your P & L (profit and loss).

  •  Credit Card

    You’ll want a business credit card to separate your business purchases from your personal. While it may be hard to get a “true” credit card, you’ll need to put up a security deposit. You’ll use this to book your travel expenses and other online tools and systems.

I think that is it! A trading company is pretty straight forward. You find your suppliers, line up your buyers, make sure the production goes good. Then the magic of getting paid, and keeping the profit and paying out to the supplier. Some Paypal too, but try not to get paid in Paypal as you’ll lose a lot of money on the exchange rate.

Keep Your Books Simple & Up To Date

Keep all your invoices together. Use a system. And then when your audit comes up, things will be straightforward. A B2B (business to business) trading company won’t have a ton of transactions. So the auditor shouldn’t charge too much.

Also, run monthly reports to check your profits. Many times when I did sourcing I wasn’t watching my expenses and only looking at my profit margins. Things creep up and by staying on top of your expenses and other fixed costs, you will know your monthly break even.

Hong Kong is your Top Choice For Trading Businesses

This to me is a no brainer. If you’re buying and selling between China and the world – Hong Kong is your number one choice. Check with your suppliers, and see what banks they are using. Then you have a company with a bank account doing your deals. You may still keep a company open in your home country for local operations there (staff, office, local salary). Keep a trading company over in HK for the B2B deal flow and quicker wire transfer turnaround time.

What do you think ? I’d love to hear your comments and feedback in the comment section below!

Shekou ferry terminal to be moved to new Prince Bay Cruise Ship Terminal

Prince Bay Shekou, Shenzhen, China
Prince Bay Cruise Terminal Rendering

The Shekou Ferry Terminal is looking quite old in the tooth and finally the decision has been made to move the terminal to the upcoming Prince Bay Cruise Terminal project. Cruise Ships will doc as well as ferries at this new location and it will include a shopping arcade, restaurants, and even a Maritime Museum. Ferries will stop at the new ferry terminal from Hong Kong, Zhuhai, Macau and more.

Source: 【Hot】Shekou to get new ferry terminal 蛇口客运码头2017年进驻邮轮母港

See other Artist renderings from OMA of Prince Bay Cruise Terminal