China Factory

Wholly foreign owned enterprise indicates foreign company, enterprise, something economic organizations or individual to establish all capital by foreign investor who invests the enterprise in China with law. According to the rules of foreign enterprises operation law,establishing foreign enterprises have to elevate economic development and comply with as following one condition that adopting international advanced technology and equipment and export of all or most products.

Foreign enterprises are Limited Liability Company, also called one person limited liability company, but not including foreign companies, enterprises and something economic organizations set up in the branch institution, such as branch companies, offices and representative offices. Foreign owned enterprise reflects that can engage activities of business scope in China and possess import or export rights. Next, it can release stock to improving the development of stock market in China. Foreign investment enterprises are based on the way of investment, allocation, risk, return investment, responsibility and liquidation that divide into Chinese-foreign Equity Joint Ventures, Chinese-Foreign contractual joint ventures. Foreign enterprises also called foreign owned enterprise and foreign investment incorporated limited. Foreign owned enterprise is the one way of foreign enterprises that set up in China according to the laws which capital is invested by foreign investor.

1.Expect land, 100% investment foreign-invested enterprises by private investors, and not Chinese investors to shares. A business can be owned by one foreign investor, it may also be a number of foreign investors or joint venture.

2.Independent management without Chinese investor to operate it. Enterprise in the light of approved memorandum and articles of association to make business management activities which never interference.

3.Responsibility for one's own profits and losses. In addition to operating income after provisions relating to Chinese tax revenue, wholly owned by investor-owned and controlled. Finish the enterprise should be notice in time and make liquidation by legal procedures.

The rules of laws of People's Republic of China on Foreign Capital Enterprises, the basic policy and principle that establish foreign owned enterprise is:

1. For enlarge outside economy cooperation and technology exchange to improve the development for China economy. China allows foreign enterprise and other economic organizations or individual to set up foreign enterprises that protect legal rights.

2. Must upgrade the development China economy which set up foreign enterprise and adopt advanced technology and equipment or export of all or most products. China prohibits or has limitation to set up foreign enterprise in some business including military industry, postage cable business and culture enterprise.

3. Foreign investor gets the profits and other legitimate rights and interests acquired, protected by Chinese laws. Foreign enterprise must comply with laws of China, cannot damage society public advantages. Foreign enterprise law has a rule that cannot implement nationalization and expropriation, in exceptional circumstances, in accordance with the needs of social public interests, to expropriate foreign enterprise according to law programs, appropriate compensation.

4. Establish to foreign enterprise application approved by foreign economic and trade department of the State Council of the People's Republic of China or authorized organization by the State Council of the People's Republic of China. Foreign enterprise has to invest during approval deadline; if out of time, the Industry and Commerce Administration institution has rights to revoke the business license. The situation of foreign enterprise are inspected and supervised by the Industry and Commerce Administration institution.

5. The production business program of foreign enterprise should be making a statement by administration.

6. Foreign enterprise must set up account books to making independent accountability that submit financial statements in accordance with the provisions and accept supervision by the financial and tax authorities. If refuse to set up the account book, can be fined, stop to operate or revoke the business license by organization.

7. Foreign enterprise can enjoy the reduce tax, duty-free by Law of the People's Republic of China on Income Tax of Enterprises with Foreign Investment and Foreign Enterprises. The profit after tax of reinvestment in China, you can apply for a refund part of the income tax already paid on the reinvested portion.

The important problem is the scope of business with foreign-owned enterprise. The scope of businesses are strictly and precisely in China. Foreign-owned enterprise can only operate business activities in the allowed scope of business. The scope will be indicated in the business license, if need to modify, please offer the application and get the approval.