(*1) [Since March 1, 2014] No. minimum registered capital is required for WFOEs with scope of business of consulting, Trading, retailing, information technology etc. in China. It's advisable to choose a registered capital within RMB100K- 500K for most WFOEs. There are minimum registered capital still required for some industries for instance: Banking, Forwarding etc.

(*2) WFOE/ Joint Venture can only conduct business within its approved business scope, which ultimately appears on the business license. Any amendments to the business scope require further application and approval.

(*3) There are 2 major taxes for WFOEs and Joint Ventures in China: Turnover tax (which includes Business tax for service and consulting business, VAT tax for trading and manufacturing business etc.), Income tax (corporate income tax, individual income tax).
i).   Business tax: 3-5% based on the turnover;
ii).  VAT tax for trading and manufacturing business
iii). Income tax: based on the gross profit, which is 25 percent nationwide (since January 1, 2008), high-tech enterprises preferential tax policies for special economic zones and the government encourages the industry in China and the West are exempted (starting January 1, 2009).
iv). Other taxes include dividend tax: it's 20%. As for public listed company, the dividend tax is: 10% since June 13th, 2005.

Partnership Enterprise: No corporate income tax required if partners are individuals. The individual partners shall pay their respective share of the partnership income. Corporate income tax applies if partners are companies

(*4) Representative office's tax used be based on 9% on expenses. Since March 2010, it has been changed over to approx. 13% according to new regulation from local taxation bureaus in Guangzhou, Shanghai, Beijing, Ningbo and Shenzhen etc.

(*5) According to State Administration of Industry and Commerce's new rules on Foreign Representative offices in China, that: (since March 11, 2011), it's mandatory that PARENT COMPANY be established for more than 2 years;Maximum number of foreign employees in Rep. office is 4.

Advantages of Setting Up A China Company

1. No minimum capital requirements for specific industry.

2. Abundance of cheap raw materials, such as coal, iron ore, natural gas, lead, zinc, gold and aluminum.

3. 3 free zones (including Hong Kong, Pearl river delta, and Shanghai) offering companies i). zero corporation tax, ii). No customs duties, iii). Minimal registration requirements and iv).no exchange controls.

4. 54 Export processing zone (EPZ) offering foreign companies lower corporation tax and subsidized customs duties. There are including the Beihai export processing zone, Changshu export processing zone, Changzhou processing zone, and the Dalian export processing zone.