Amicorp has been serving the Chinese market for over 10 years, first from the office in Hong Kong and since 2006 from offices in mainland China. Amicorp (Shanghai) Consultants Ltd. provides clients a network of local professionals to assist foreign clients entering the Chinese market and Chinese clients developing overseas strategies. Amicorp helps clients implement trade and investment structures for investments in to or out of China.

For Chinese Outbound Investments
For some time now, state-owned entities have been making outbound investments into natural resources. An increasing number of Chinese companies are following suit, using outbound investments to acquire distribution partners, technical or management know-how, or to expand their market reach. To ensure that these investments are structured efficiently and effectively, Amicorp helps clients set up and maintain holding, financing, and leasing companies in over 30 jurisdictions.

For Chinese Inbound Investments
Already one of the safest destinations for global investors, the PRC unified its tax system in 2008. The simplified local tax system and an extensive treaty network offer investors many opportunities for structuring trans-border investments and more tax efficient trading.

Some tax treaties provide more beneficial withholding tax rates than others. The China-Hong Kong and China-Singapore treaties, for example, allow very beneficial dividend, interest and/or royalty withholding tax rates.

If you require a presence in China, consider one of the following entity types:

Representative Office (RO)
An RO is an entry-level entity for doing business in China. Functional but inexpensive, it is easy to set up. An RO is the entity of choice for those desiring a simple presence in China to carry out liaison activities, market research, sourcing, and quality check, and for foreign law firms not yet allowed to operate as China-based legal entities. Properly structured, an RO effectively caters to international traders buying or selling goods in China.

An RO does have limitations. It is not entitled to issue invoices or enter into sales contracts. It can employ expat or domestic staff, but only via a foreign enterprise service company (FESCO), a semi-governmental body. An RO is not allowed to do business, that is, earn revenues, but is still subject to business and corporate income tax on a deemed income basis, 5% of deemed income and 25% of deemed profit, respectively.

Wholly Foreign Owned Enterprise (WFOE)
Some investors partner with local Chinese companies and thus hold shares in foreign invested enterprises (FIEs). Most wish more control of their China venture and prefer a WFOE, a type of regular company. A WFOE has all the properties of a normal limited liability China company. Requirements include a minimum registered capital of CNY 30.000 (approximately USD 4,500), business premises, and a certain number of staff. The competent local authority may also stipulate other requirements.

Before making investment decisions, a foreign investor must refer to the periodically updated Directory of Industries for Foreign Investors. Some industries are not, or not fully, open to foreign investments.

A WFOE can carry out production and/or services as encouraged or allowed by the Directory of Industries for Foreign Investors. It pays business tax or VAT in the case of a production company, as well as corporate income tax and other minor surcharges imposed by the government.

Branch offices
Branches are particularly relevant to foreign financial institutions seeking to establish a presence in China. Generally, setting up branches requires upfront approvals.

A branch is useful where a WFOE wishes to expand to locations other than its original registration city. A branch is not an independent entity, although it can open a bank account under its own name, issue invoices and enter into sales contracts. All financials and taxes of a branch are consolidated and paid by the parent company.

What can Amicorp Shanghai do for you?
With its China office now in Shanghai, Amicorp can assist clients with the following: