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Tax Insights

2018-08-11
929 | 42 | 5

Logistics Co- Registered Capital

With the rapid growth of the Chinese economy, international logistics companies are now starting to boom. However, there are many problems encountered by investors regarding whether the registered capital amount and payment amount and timing.




RTF comments regarding the relevant policies are as follows:
1.Registered capital
According to People's Republic of China International Logistics Industry regulations published by Ministry of Foreign Trade and approved by the State Council, the minimum registered capital of international freight forwarding companies shall meet the following requirements:
1)For companies engaged in the maritime international cargo transport business, the minimum registered capital should be at least 5 million RMB.
2)For companies engaged in the air international cargo transport business, the minimum registered capital should be at least 3 million RMB.
3)For companies engaged in the land international cargo transport business, the minimum registered capital should be at least 2 million RMB.
Companies engaged in the former two businesses, the minimum registered capital should be based on the higher amount.

For any logistics company branch set up, another 500,000 RMB should be added as registered capital.

From the above regulation, what is the correct amount of capital to be paid and does the capital need to be paid in full instantly?

The issue of the newest corporate law in 1st, March, 2014 caused confusion among companies because according to the newest law, there is no restriction regarding the amount of registered capital, meaning with 1 RMB only, you can register a company.  Also, the registered capital can be paid in installments within a reasonable time period.

Overall, these are the issued regulations but they not apply to all industries.  Logistic companies, for instance, still have to meet the International logistics industry regulations capital requirements but it is not necessary to pay the full capital at one go.

2.Set up process
The common company set up process is as follows:
1)Company name check
2)Obtain the approval certificate from the Commission of Commerce (COC)
3)Obtain the business license from Administration for Industry and Commerce (AIC)
4)Obtain the company seal from Public Security Bureau
5)Obtain the Organization Code from the Administration of Quality and Technology Supervision (AQTS)
6)Apply for the foreign exchange registration and open a bank account
7)Apply for the Tax registration and invoice registration

According to the Shangmaofa [2005] No. 32 and the (Guo Fa [2004] No. 16), the company approval for international logistics companies has now been cancelled. The company just has to register at the AIC with no registration at the COC and it can directly operate its business. After obtaining the business license from the AIC, only filing at the COC is required.

So, RTF reminds all the foreign investors, before investing into china, to check whether their business industry requirements. Some industries as seen above for the logistics industry still need to pay a specific amount of capital and security deposit. Remember, RTF is always here to provide your enterprise with the right support.  Contact us at 400 700 7472.

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