Guangzhou and Shenzhen
Foreign trading companies registered in free trade zones (FTZs) are, in theory, allowed to expand their business scope to enjoy the rights of import/export and distribution in China now widely conducted through foreign invested commercial enterprises (outside FTZs). In practice, however, we have found that some of the FTZs are not implementing this locally for the time being, and still force FIEs to use local agents and traders to facilitate their transactions.
Usually, the expansion of the business scope will need to be accompanied by an increase of registered capital.
We have recently supervised a number of set ups in various FTZs, which applied different practices and regulations to the same investment scenario, even within the same city; it is therefore advisable to seek professional help and compare the practices in different zones before a decision is taken.
Not all the districts in Guangzhou are open to the registration of representative offices (ROs) of foreign companies. Currently, ROs were not allowed to be set up in the districts of Panyu, Huadu, Conghua and Zengcheng. We recommend that you check with the local authorities that you are lawfully allowed to register your local entity, especially before you commit to any lease agreement.
A labor law training program for the chief representatives of foreign companies ROs in Dongguan has been established by the local authorities. This now a compulsory step during the set up process for ROs. However, rather than attend yourself, you could authorise, through a power of attorney, local RO staff to attend the course on your behalf.
Dezan Shira & Associates maintain offices in Guangzhou and Shenzhen, advising foreign investors on legal administration, corporate establishment, due diligence and tax policy in the city. Please contact Rosario Di Maggio in Guangzhou or Alberto Vettoretti in Shenzhen for more information.
Previous Article « China expanding oil and gas networks
Next Article Chinese stocks, red chips and global financial markets »
Dezan Shira & Associates´ brochure offers a comprehensive overview of the services provided by the firm. With its team of lawyers, tax experts, auditors and...
A firm understanding of China’s laws and regulations related to human resources and payroll management is absolutely necessary for foreign businesses in...
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...
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.