Update on the COVID-19 Situation in China
How has the pandemic impacted the Chinese economy?
The pandemic brought a negative impact to the Chinese economy, especially on the traditional service industry and some labor-intensive manufacturing industries. However, China’s outstanding disease prevention measures exceeded the international community’s expectations and China has recovered continuously since March 2020. The economic impact on the Chinese market is short-term and temporary. Nowadays, China’s economy is pushing the world economy.
Figures from the General Administration of Customs show that China’s exports and imports both grew by more than 25% from January to May 2021, compared with the same period last year. Even as much of the rest of the world continues to suffer from the epidemic, China’s orders for foreign trade products continue to grow. China continues to export goods abroad, and also introduces a large number of raw materials and products that meet the needs of the Chinese market. Imports of iron ore, oil, and soybeans were no less than in previous years, while imports of mechanical and electrical goods increased 21.8 percent. The demand power of the Chinese market is growing, which will help other economies recover and give a strong boost to the global economy.
Read MoreEverything You Need to Know About Tax Rebates in China
The Chinese government had many policies on tax rebates to encourage foreign companies to enter China as well as foreign professionals to work in China. These rebates are usually on taxes that have been paid, including income tax, import tax, VAT (value-added tax), and many others. However, in order to know the qualification of a tax rebate/tax treaty benefits and to claim such privileges, companies or individuals must complete certain forms and submit them to local authorities.
For business, you will need to first submit all the required documents including the business license and any other applicable operating license to the local tax authorities. And then you will need to complete several forms (all of the forms are in Mandarin Chinese). To key here is to prove that you have paid tax on an item that could have returned them as a rebate, under the VAT exempt, or having a preferential common tax refund rate.
Tax Bureau
One consistent feature of our business style at Incorp China is the emphasis we put on going the extra mile for our clients. As a boutique, white-glove China consulting firm, Incorp China prioritizes resourcefulness, close communication, and building personal relationships.
This was recently demonstrated when one client who wanted a Consulting WFOE was not able to travel to Shenzhen to meet local government officials in person, as is required during normal times. Even with vaccines being distributed worldwide, the coronavirus pandemic is not yet over, and traveling to China is explicably difficult as a result.
How to Set Up a WFOE in China
Wholly-foreign owned enterprises, or WFOEs (sometimes abbreviated WOFE) is a topic we have written about extensively in this blog series. Unlike most other investment vehicles , a WFOE does not require a foreign company operating in China to have Chinese investors, giving the foreign company the most autonomy over its own affairs.
WFOEs come in three basic forms:
- Consulting WFOE, which is the easiest to acquire;
- Manufacturing WFOE, which allows companies to manufacture in China. Because Incorp China is located in Shenzhen, the famed factory city of the world, we are quite familiar with these;
Post-Covid Tax Cuts in China—Do you Qualify?
As the economic aftershocks of the worldwide coronavirus pandemic are still prevalent, the Chinese government has cut an array of taxes and fees for both large and small businesses. The stimulus has focus on industries particularly hurt, such as high-tech manufacturing, foreign trade, and medical equipment.
These tax cuts amount to RMB 550 billion (about $85 billion) and are not schedule to be fully phased out until 2025. As we have written before in this blog series, some of the stimulus measures end in 2023, the other in 2025.
They were announced by Vice-Premier Li Keqiang in Beijing’s 2021 two sessions (NPC & CPPCC National Committee annual sessions) that concluded on March 11th 2021.
China’s Economic Stimulus in Response to the Coronavirus Pandemic
In recent times, due to the coronavirus epidemic, it has become more valuable for businesses to open in China. They have waived fees and given credits to small businesses to stimulate the economy. While they have a wide variety of credits, they do prefer certain businesses, including those like manufacturing business or medical businesses. This is not for the short term, as the benefits could last all the way through the end of 2025. In total, all of the benefits and waived fees total up to around 85 billion dollars.
These benefits were made by Li Keqiang this year (in 2021), during the yearly meetings of the NPC and CPPC national Committee. Li Kequiang is the Premier of the State Council of the PRC and a key architect of the country’s current economic reforms. This isn’t the first time incentives have been set in place for small businesses to come to China. Due to the Coronavirus epidemic, a new volley of such efforts have been made.
Investment Provinces: a Quick Look at China’s Richest Regions
It is quite well-known that China had made stupendous economic growth in the last 30 years. Today, we compiled a list of the richest provinces where the growth most rapidly occurred.
Guangdong
The three main cities are: Jiangmen City, Kaiping City, and Foshan City. The GDP (Gross Domestic Product) is the total of 12.5% of the entire nation. This province is considered one of the most notable provinces in China, giving it dominant economic and financial strength. Being China’s most populous province with over 100 million residents, this province is also known for benefiting greatly from the “reform and opening” policies such as the Open Door Policy.
What is an Internet Content Provider License?
First, let’s get down to the nitty-gritty of Internet Content Provider (ICP) licensing. What is it?
An ICP license is an essential prerequisite for attracting customers in the Chinese mainland. As we have written before, it is a registration issued by the state that allows legal operation of China-based websites to legally operate in the country.
In order to establish and expand your business globally, especially to China, one must consider the necessary steps to file for a separate legal entities, as well as consolidating electronic commerce, so that your business will thrive- not only are these steps to getting an ICP License encouraged, but it is also requirement in order to officially set up your site in China. The only possible exception to this is if your site is not accommodated in mainland China.
What You Need to Know: China Visa Requirements
Chinese has become home for many Western expatriates who desire work outside their home countries. The Chinese government’s visa application process has been greatly simplified in recent years, but is still rather complicated. Anyone looking to acquire a Chinese work visa should keep in mind some crucial tidbits of information that will be crucial in deciding the status of your work permit.
There are three different kinds of work visas one can apply for:
Profit Repatriation: How to Get Your Money Out of China
As China’s economy continues to grow, it appears to foreign companies as an increasingly attractive place to do business. China is the only major economy to have grown during 2020, a year remembered by many for the coronavirus pandemic and concomitant economic recession. But as foreign businesses invest in the China, a growing number of them are also looking for the most efficient way to bring their profits back home. r repatriating funds are different for individuals and companies, regarding both the preconditions one must meet and limits on the amount transferred. Here, we will can compare the regulations for companies and people: