May 10 – In order to create a healthy environment for the development of China’s international freight transportation industry and to establish a regulatory system for business operations, the Ministry of Commerce issued the “Administrative Measures for Foreign-Funded International Freight Transportation Agency Enterprises (Order of the Ministry of Commerce  No.19, hereinafter referred as the ‘Measures’) in 2005.
According to the Measures, foreign investors are allowed to establish foreign-funded international freight transportation agencies in China in the form of a joint venture or cooperation. From December 11, 2005, solely foreign-owned international freight transportation agencies are allowed in China with a minimum registered capital of US$1 million. Foreign investors may acquire established international freight transportation agencies through stock equity purchases. However, the ratio of the equity and investors’ qualifications shall comply with the requirements prescribed in the Measures. Relevant laws and regulations shall be followed if state-owned assets are involved.
Scope of business of foreign-funded international freight agencies
Upon approval, foreign-funded international freight agencies may conduct all or some of the following businesses:
Those enterprises that conduct document express delivery (not including delivery of personal letters and government documents above county level) shall go through the requisite authorization procedures with the postal service once approved by the department of commerce.
Application for setting up international freight transportation business
To set up a foreign-funded freight transportation agency, the investor should submit an application according to the existing laws and regulations concerning foreign investment in China to the provincial departments of commerce, who will reply within 30 days after receiving the application. Once approved, an Authorized Certificate for Foreign Invested Enterprise will be issued to the applicants, otherwise a written statement outlining the reasons for disapproval will be provided.
Applications for setting up an international freight transportation business shall be reviewed and processed by the Ministry of Commerce after a first round review by the provincial departments of commerce, which may require up to 75 days for approval.
Application for setting up a branch
After one year of business, the foreign-funded freight transportation agency can apply for setting up branches elsewhere in China if the registered capital is ready. The scope of business of the branch should not exceed that of the parent agency, and the parent agency holds the civil liability of the branches.
An increase of at least US$500,000 is needed for setting up one branch of the foreign-funded freight transportation agency. If the agency has a registered capital above US$1 million, the exceeded part can be used for setting up branches.
The application procedure for setting up a branch is similar to setting up a foreign-funded freight transportation agency, except for the required documents.
Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China, Hong Kong, India, Singapore and Vietnam. For advice on these measures, please email firstname.lastname@example.org, visit www.dezshira.com, or download the firm’s brochure.
China Grants Tax Incentives to Logistics Industry
China Offers New Incentives to Logistics Industry
Shanghai to Offer Incentives to Shipping-Related Industries
Previous Article « China RO vs. FICE
Next Article China FICE vs. Manufacturing WFOE »
Dezan Shira & Associates´ brochure offers a comprehensive overview of the services provided by the firm. With its team of lawyers, tax experts, auditors and...
Doing Business in China 2022 is designed to introduce the fundamentals of investing in China. Compiled by the professionals at Dezan Shira & Associates in...
With the scope and penalties of China’s social credit system being further clarified in 2021, legal and regulatory compliance has become more important than...
As a legitimate tool for reasonable tax planning and cost saving, tax incentives play an important role. Companies also use tax incentives as a useful...
A firm understanding of China’s laws and regulations related to human resources and payroll management is absolutely necessary for foreign businesses in...
Over the last few months, China has been quickly expanding the pilot program on electronic special value-added tax (VAT) fapiao (hereafter special VAT...
Dezan Shira & Associates helps
businesses establish, maintain,
and grow their operations.
Stay Ahead of the curve in Emerging Asia. Our subscription service offers regular regulatory updates,
including the most recent legal, tax and accounting changes that affect your business.