STAR Accouting & Tax

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Foreign citizens switching jobs? What about the Visa?

For any foreign citizen, a visa is always an issue that could create lots of stress. A new visa is required when they are switching employers or decided to be an entrepreneur. Although the process and documents required are similar, for those who decided to set up their own business, they could apply for the new visa as if they are the employee of their own company. Therefore, the establishment process of the company would be the first step. The general application processes 1. Temporary residence registration with police station (1 business day) 2. Employer registers a new account in the system if there is no existing account (2 business days) 3. Application for Work Permit (15 business days) 4. Application for Residence Permit (7 business days) Once the Working Permit application is lodged under the new employee, the Entry ad Exit Administration Bureau should be notified and process to cancel the existing Residence Permit under the previous employee. The applicant would be granted with 1-month M visa (bridging visa) that allow them to stay on shore until the new RP is obtained. The new employer company are required to provide: 1. Copy of the business license 2. Request Form for employment Note:  1.  If the application for switching visas is lodged while the current one is expiring within 30 days, the process will essentially be the same as applying for a new visa. Therefore, if possible, prepare for switching process early. 2.  For Read the full article

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FAQ - Chinese Representative Office, Consulting WFOE or Trading WFOE?

A few options are available for foreign investors to establish a business in PRC. The most popular ones are Representative Office (RO), Consulting WFOE or Trading WFOE. Representative Office: 1. It is the office set up by a company in a foreign country to conduct non-operational activities such as marketing or basic client consulting. Therefore, in theory, ROs do not generate revenues. Consequently, the taxable amount is not based on revenue, but expenditures incurred during the operation. 2. The registration address of RO is required to be Class A office. 3. RO is not considered as a legal entity. Consulting / Service WFOE: 1. Consulting WFOE is considered as a legal entity and enabled to carry out revenue generating business activities. Therefore, the taxable amount is calculated based on revenue. 2. There is no specific requirement on office address selection. Although, we usually suggest clients to register under a virtual address as it will save the hassle to notify all relevant authorities with each office relocation  Trading WFOE: 1. It takes longer time and more steps to register a trading WFOE compare to a consulting WFOE. Typically, the volume of transactions higher than that of other types of WFOE. Thus, the cost involved in registration and accounting component are higher. 2. Trading WFOEs are legal entities and tax is calculated based on revenue. Contact us for more information regarding entity registration.  Read the full article

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Quick FACTS of Chinese PRC Income TAX

Tax Residency You are a Tax Resident of PRC if either of the following criteria is satisfied: 1. Individuals who domicile in P.R.China, Or 2. Individuals who are physically present in P.R.China for aggregated 183 days or more in any given 12 months period (commencing or ending in the fiscal year concerned). If employees are deemed to be tax resident, they will be liable to pay individual tax. And the non-resident company that perform the service is considered to have a permanent establishment in China. Income attributed to the business operation is taxable locally. Tax Loss Tax losses can be used to offset income earned in subsequent years. In the absence of any income, the losses cannot be utilized. And the tax losses can only be carried forward for 5 years. Tax deduction on expenses -  foreign nationals working in China Under PRC individual icome tax law, there are tax exemption (or deduction ) on benefits such as international school fees and housing allowance, provided that these items are cludded in the employement contract. Make sure to obtain the fapiao (tax invoice) from the landlord and the school as the Tax Bureau will require the applicant to present the copy of employment contract as well as fapiaos. Read the full article

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Chinese General Taxpayer Can Now Apply for Small-scale Taxpayer

With the intension to encourage and support all sectors to resume production and operation, the Tax Bureau is now allowing General Tax Payer to be registered as Small Scale Tax Payer, given they are eligible to apply.  Q：What are the differences?A A: One of the decisions for investors when setting up a business in China is whether to classify the new entity as a Small-scale or General Taxpayer. Here are some quick facts of both categories:  · Small-scale Taxpayers are exempt from income tax given the business revenue is less than RMB 100,000. The corporate income tax rate applicable is 5%. 3% of value-added tax (VAT) applies to them in ALL business transactions. This VAT rate was just reduced to 1% for Small-scale Taxpayer for all sales that occurred between 1st March to 31st December 2020. (VAT is a similar concept to GST（goods and services tax）in certain countries.) · 6% VAT applies to the General Taxpayer, which could be claimed back from the tax bureau during the annual tax refund. Enterprises with a revenue figure between 1 million to 3 million RMB, the corporate tax rate applicable is 10%.  · Business owners have the freedom to stay in the category of Small-scale Taxpayer until the accumulated business revenue exceeding five million RMB.  · Once business owners declared themselves as General Taxpayer, the option of being a Small-scale Taxpayer is no longer viable to them.  There is no absolute advantage of being either. Read the full article

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FAQ – WOFE registration in China

Definition of WFOE Wholly foreign owned enterprise – is a common investment vehicle for foreign parties (either individuals or corporate entities) to establish a foreign-owned limited liability company in mainland China. The unique feature of WFOE is that the involvement of a mainland Chinese investor is not required, as oppose to a joint venture establishment. Why WFOE · Able to implement the worldwide strategies of the parent company without the complication of having a Chinese partner ·  Unlike representative office, a WFOE is able to receive and remit RMB to the investor company overseas · Higher operational, management control and future development efficiency ·  Lower risk of IP leakage (trademarks, patents and others) ·  Simplified process of establishment and termination Preparation required STAR Accounting & Consulting specialized in helping foreign investors with company formation, finance outsourcing, tax planning, banking, HR & payroll and other relevant services for 13 years. Instead of pulling your hair out to try to figure out how to properly setup a WFOE, having STAR to assist you from beginning to end will save your time tremendously. The only document the investor needs to provide us is: · The original passport of the WFOE investor. Or the passport notarization issued by the local Chinese embassy. · If the WFOE is to be setup by a corporation overseas, the business license required to be notarized by the local Chinese embassy. Read the full article

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Best 5 Cities in China for your Startup Business

Hey there! I hope you guys are doing great by staying indoors :). Today we are going to discuss the 5 Best cities for Startup Business. So, let’s dive into it. Before knowing the best cities, let’s do some groundwork whether this country has any scope for a business or not. Is China is Good place for startup business…? Yes! Of course, China is one of the top countries in our world which is investing more in this Business field for many years. So this country would be the best choice for the people who are thinking about starting their business. Now let’s get into the picture. In China they are four key options to choose by Foreigners they are given below WFOE (Wholly Foreign-Owned Enterprise) Joint Venture Representative office An Umbrella Company   Top 5 cities in China to Start a Business    Shanghai- This city is the first biggest city in China with 27,058,000 crores of population. And is popularly known as the Pearl of Asia. Beijing- It is the second-largest city in China after Shanghai. You all know that Beijing is the Capital City of China with 20,463,000 crores of population. Shenzhen-is the city which is surrounded by hills, islands, and many more and the scenery attracts us more. The population of Shenzhen is 12,357,000 lakhs. Hangzhou- is the fourth-biggest city in China with a 7,642,000 lakhs of population. Wuhan- is also one of the biggest cities in China with a population of more than 11 million. Read the full article

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steps to start business in China

Deciding to open up a business in china is a move towards the right direction. The country has a large population, making consumers available. It is also trading with countries all over the world. This means that China has ready market. China is also determined to open up its growing economy to all players, both local and foreigners. Given the swollen, growing economy and ready market, it is no wonder that very many people want to start a business in this country. But how do you start a business in China? Well, here are the 7 main steps to follow: Do your research well The government of China is allied to its businesses so tightly. So, it is good that you know what the Chinese government wants first as this will go a long way to helping you construct a business plan. China has a clear guideline on what kind of businesses it wants set in its territory. Precisely, it doesn’t want businesses that pollute the environment. High-tech businesses are what China wants. It wants businesses which will create a lot of good jobs to its people. Also, do research about the industry you are interested in. Talk to business people who have already doing great in the industry and ask them how they succeeded. You also need to ask them how they had failed. Pick the right location Now that you already know what kind of business you want to set up, the next step is to find a good location. For your business to be successful, you have to set it at the right location. Read the full article

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Best business to start in China

China is the nest big business frontier in the world. U.S. Exporters and expert entrepreneurs are scrambling continuously to tap on market and disposable income driving the economy of China. Business ideas for this country, particularly the best ones, are typically rooted in the industries in the Western countries. These opportunities are easily adoptable to suit the Eastern culture. With that in mind, you should easily be able to tell what business is the best one to start in this country. Without much ado, here are some of the top businesses to start in the world’s second-largest economy. Processed food supplier The Chinese, just like the citizens of many other countries, are migrating to the big cities for 21st century lifestyles and for professional jobs. With such trends usually comes the need for things like convenient food tends to grow exponentially. Actually the need for such convenient products such as food usually grows along with the brand awareness. Whole there are many players in the food and beverage industry in the big cities of China, there are still large market shares available for grabs. You can set up your distribution through a popular, established supermarket chain. You can also set up eateries in strategic locations that experience huge human traffic. You can also have few mobile food tracks and also provide door-to-door delivery services. Read the full article

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Regulations for Starting a Business in China

China has a GDP of more than $13 trillion. The companies and businesses in both the Mainland China and coast are playing a critical role in building and maintaining the country’s economy. The emerging business and employment opportunities which have grown across several market sectors and industries are granting a great scope for companies and investors. This makes it a great place for starting a business. But before setting up a company in this country, you should first be aware of the regulations for doing so. We have written this article to inform you of some of the most important regulations for setting up a business here. Jurisdiction of registration Before starting any business in China, it must be registered. There is a body responsible for registering different companies in the republic of China. Read the full article

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How to Start Small Business in China

Starting a business in China comes with many advantages. Many entrepreneurs from abroad are rushing to start businesses in this country. The country is now becoming very popular option for those who want to set up small businesses from other countries. Because you are here, I bet starting small business in China is a possibility you are considering. If that is the case, then you should know one or two about doing business here. Among the things to know is how to go about the whole process of setting up a small business within the territories of the Republic of China. Whether you are considering starting importing or exporting goods, starting a school or college, dealing in beauty products, selling or manufacturing pharmaceuticals, or investing in the healthcare sector, this post takes you through the process of starting your business. Setting up a small business The first thing to do is to make a decision on whether you would want to establish your business entirely in China. You may also want to base just a part of your business such as manufacturing operations in the world’s most developing economy. You should start by exploring the advantages and disadvantages of having operating entirely in this country. You should also consider the overall costs of doing business here. You will find out that the cost of doing business in China is far much lower than operating a business elsewhere. Read the full article

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Cost of Starting a Business in China

To register any business, China government requires that you indicate the total amount of capital you will be investing into your business. Investors can invest this registered capital in a number of tranches, which can spread over a couple of years. In most cases, many investors ask about the least required amount of registered capital that they can invest. We intend to support your goal of starting a business successfully in China. We are going to do so by providing you with the general figures that are closely related to the cost of setting up your business in this country. Registration cost The cost of registering a Joint Venture or Wholly Foreign Owned Entity for foreigners, usually differ, depending on the service provider. You can get a local service provider that offers relatively low fees, but will still prepare your documents quickly. You can also work with an international legal firm. Averagely, service providers will charge you about 44.500 RMB for assisting you with the registration process. The services generally include picking a name and opening an account with the local bank. The registration process takes about 3 to 9 months. Cost of hiring stuff Employment costs differ from region to region. For example, you will find that hiring employees in Guiyang will not cost the same as hiring employees in Shanghai. Read the full article

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How to Start a Manufacturing Business in China

It is also important to mention here that China is currently the largest manufacturer in the world. Despite this, China’s labor costs are far much lower than those in most developed countries like U.S., Germany, and UK. This makes it a perfect place to manufacture products which require vast scale or high labor. Corporation China will help you to easily navigate everything you need to know about China’s manufacturing sector. For you to have a manufacturing in China and operate it successfully, you should ensure that you are not running into any product quality or safety problems. We have dedicated this post to explaining to you how to go about starting a manufacturing business in the world’s second largest economy. We will explain to you the steps you will need to take to start your business. Setting up a manufacturing business in China can be a daunting process. The country now imposes strict rules and guidelines for setting up any factory in its territory. For example, it imposes several anti-pollution, local transport, local energy supply, and safety issue regulations which you will have to comply with when setting up any new factory. You need to comply with all these rules and regulations even if the proposed location of the factory is somewhere in a well-known industrial zone. Let’s get straight to the process of setting up a factory in this country. Read the full article

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advantages of stating business in China

Understanding China’s customs is among the most vital things you need to do if you would want to have a successful business. But before going into that, you should assess what opportunities China offer for your line and scope of business, and also the advantages which you are likely to benefit from if you start a business there. Such an understanding will be important at the time you will be laying out entry strategies. Of course, setting a business in China can be very daunting especially for new entrants. In other words, the road might not be as smooth as you would want it to be. However, there are so many advantages of starting a company in this country. Discussed here are the main ones. Stability Political, economic, and social stability has greatly helped China to consistently grow in all spheres in the last few decades. In fact, for the last three decades now, the country has been very stable. Economic, social, and political stability is very important in guaranteeing a conducive business environment. These three makes a country’s market predictable. Therefore, the businesses can be able to strategize and predict the future accordingly. In fact, such stability is the reason hyperinflation cases and occurrences of business-crippling have not been reported here for a very long time. Favorable policies Another advantage of doing business in China is that the government policies are favorable. Read the full article

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Setting up a Company in China.

Before we set up our Business in China, we need to know some main points. Follow the Key options (tips). Choose a well-populated locality. Be careful while hiring your employee Setting up the Financial Budget. The way you treat your employees is very important Assigning and managing the tasks Start your profession. Communication with Public Extension of your Business.  In China, they are four key options to choose by Foreigners they are as follows: WFOE -It is a limited liability program that stands for Wholly Foreign-Owned Enterprise. Sometimes it is also called as  This type of program is for starting a production by foreign firms in China. But this program will get varied from one place to another. JV Company-It is a partnership program that stands for Joint Venture This type of program is created between Foreigners and Chinese investors to share their profits and losses in a business. Sales Office- It is an agreement type of program in China. This method useful when a Foreigner needs to increase the control of the workforce. Representative Office- This is a program in which it doesn't allow a Foreigner in China to conduct or implement business activities. Choose a well-populated locality. As I discussed in my previous article (Best 5 Cities in China for your startup Business), select a location where the Government and Industries are centered. Read the full article

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Best 5 Cities in China for your Startup Business

Before knowing the best cities, let’s do some groundwork whether this country has any scope for a business or not. Is China is Good place for startup business…? Yes! Of course, China is one of the top countries in our world which is investing more in this Business field for many years. So this country would be the best choice for the people who are thinking about starting their business in China. Now let’s get into the picture. In China they are four key options to choose by Foreigners they are given below WFOE (Wholly Foreign-Owned Enterprise) Joint Venture Representative office An Umbrella Company Top 5 cities in China to Start a Business    Shanghai- This city is the first biggest city in China with 27,058,000 crores of population. And is popularly known as the Pearl of Asia. Beijing-It is the second-largest city in China after Shanghai. You all know that Beijing is the Capital City of China with 20,463,000 crores of population. Shenzhen-is the city which is surrounded by hills, islands, and many more and the scenery attracts us more. The population of Shenzhen is 12,357,000 lakhs. Hangzhou- is the fourth-biggest city in China with a 7,642,000 lakhs of population. Wuhan- is also one of the biggest cities in China with a population of more than 11 million. Based on the earlier-mentioned, these are the top 5 cities that are most populated in China to start a business, and also they are having the best infrastructure in their respective cities. Read the full article