Thursday, March 28, 2024
23.7 C
Haikou

Bo’ao Forum for Asia (BFA) Agenda Overview

Discussions on investment, technology, and climate action at the Boao Forum for Asia 2024 Annual Conference. Agenda Overview: March 26-29

Hainan Free Trade Port Encouraged Industries Catalogue (2024 edition)

Everything you need to know about the Hainan Free Trade Port Encouraged Industries Catalogue (2024 edition)

Permanent Residence Identity Cards now Enable Simplified Business Registration...

Hainan Province pioneers using Permanent Residence Identity Cards for simplified business registration, fostering a more inviting investment climate

All tariffs removed from NZ dairy entering China from...

New Zealand said on Monday all its dairy products were now able to enter China duty-free as safeguard duties on milk powder ended on Dec. 31st
HomeBusiness NewsSetting up a...

Setting up a Trading Company in Hainan Island, China: A Comprehensive Guide

Introduction to Setting up a Trading Company in Hainan Island, China

Setting up a trading company in Hainan Island, China can be a rewarding venture. This guide provides a comprehensive overview of the process, requirements, and opportunities available for foreign investors interested in retailing, wholesaling, franchising, or commission agency activities.

Understanding Foreign-Invested Commercial Enterprises (FICEs)

Foreign-invested commercial enterprises (FICEs) in Hainan Island engage in various activities, including retailing, wholesaling, franchising, and commission agency activities. Let’s delve deeper into each of these activities:

Retail FICE in Hainan Island

Retail FICEs are involved in selling goods through various channels such as fixed venues, television, telephone, mail order, internet, and vending machines. They can also import goods dealt in by the FICE itself, purchase domestic products for export, and engage in other relevant ancillary businesses.

Wholesale FICE in Hainan Island

Wholesale FICEs in Hainan Island primarily focus on selling goods to retailers, industrial, commercial, and other customers. They can also engage in commission agency activities, import and export goods, and conduct other relevant ancillary businesses.

Basic Set-up Requirements for FICEs in Hainan Island

Before establishing an FICE in Hainan Island, foreign investors need to meet certain criteria:

  1. Good Reputation: Foreign investors must have a good reputation with no history of violating Chinese laws, administrative rules, or regulations.
  2. Registered Capital: The registered capital is the amount of money or evaluated substances that the shareholder commits to investing in the company. For a wholesale company, the minimum registered capital is RMB 500,000, and for a retail company, it is RMB 300,000. The competent authority may require a higher amount depending on the situation.
  3. Investment Ratio: The required ratio between registered capital and total investment should be met.

Limitations for FICEs in Hainan Island

Certain limitations apply to FICEs dealing with specific products such as books, periodicals, newspapers, pharmaceutical products, agricultural chemicals, and more. If a foreign investor has more than 30 retail stores in China and distributes these products from different brands or suppliers, their share in a retail enterprise is limited to 49 percent.

Specific Considerations for Retailing in Hainan Island

When applying to open a shop concurrently with the establishment of the FICE, the proposed shop must conform to the urban and commercial development plans of the city. Additionally, larger stores (above 3,000 square meters) require additional documentation such as the certification document for the right to use the land or premises lease agreement.

Franchising Opportunities in Hainan Island

Foreign investors interested in franchising should comply with the Administrative Regulations on Commercial Franchise. This regulation governs the authorization of trademarks, trade names, and operation models for remuneration or franchise fees.

Operation Term, Business Scope Expansion, and Application Process

FICEs in Hainan Island generally have a term of operation that should not exceed 30 years, with exceptions for those in the central and western regions. If an existing FIE wishes to expand its business scope, it needs to follow legal procedures, amend relevant documents, and specify the distribution method and product list.

The application documents for establishing an FICE include

  • a written application form,
  • feasibility study report,
  • contracts,
  • bank credit and registration certifications,
  • audit reports, and more.

These documents ensure the transparency and legality of the business.

Here are some things to keep in mind:

Foreign investors are strongly recommended to retain a Chinese entity that is authorized or permitted by relevant authorities to directly submit the application documents.

The Chinese entity that acts as a sponsor is responsible for submitting the application documents to the relevant authority and following up on the application process. The sponsor will also be responsible for providing the foreign investor with the necessary assistance, such as translation and interpretation services.

The following are some of the requirements for a Chinese entity to act as a sponsor:

  • The entity must be a legal entity registered in China.
  • The entity must have a good credit record.
  • The entity must have the necessary experience in setting up foreign funded companies in Hainan.

If you are a foreign investor who is interested in setting up a Free-Trade zone company in Hainan, you should contact a professional service provider who can assist you with the process.

  • The Hainan Free Trade Port (FTZ) is a special economic zone within China that offers a number of benefits to foreign investors, including lower taxes, relaxed visa requirements, and simplified customs procedures.
  • To set up a trading company in the Hainan FTZ, foreign investors must first obtain a business license from the local government. The application process can be complex, so it is advisable to hire a local attorney or consultant to help.
  • Once the business license is obtained, the foreign investor must then open a bank account and register for taxes. The tax rate for trading companies in the Hainan FTZ is 15%, which is lower than the standard corporate tax rate of 25% in China.
  • Foreign employees working in the Hainan FTZ are also eligible for a number of tax breaks, including a reduced personal income tax rate of 15%.

Conclusion

Establishing a trading company in Hainan Island, China, offers foreign investors lucrative opportunities in retailing, wholesaling, franchising, and commission agency activities. By understanding the basic set-up requirements, registered capital, limitations, and expansion options, investors can navigate the process successfully. For more information, contact Business@tropicalhainan.com.

Related Article: Documents and Process for Registration of Foreign-Funded Companies in Hainan Island, China

Documents and Process for Registration of Foreign-Funded Companies in Hainan Island, China

Latest properties for rent

Two bedroom apartment-rental lease transfer

Room 301, Building 9, Hongdao Garden, No. 352 Yehai Avenue, Chengxi Town 海南省海口市龙华区城西镇椰海大道352号港岛花园9栋301房
2
Bedrooms
1
Bathrooms
80.57 m2
Living area
¥2700

Romantic Turkey Halal Restaurant

Experience the Essence of Turkey at Romantic Turkey Halal Restaurant!Step into a culinary haven where the heart of Turkey comes alive on your plate. At Romantic Turkey, we offer a menu that reflects the...

Middle, primary school & Kg teachers needed – Sanya, Hainan – Aug 2024

Experience the best of both worlds - a fulfilling teaching career and an idyllic island lifestyle. Join our international school in Hainan this August...

UNIVERSITY LECTURER IN EARLY EDUCATION HAINAN

For this subject, we have several courses that require face-to-face teaching by a foreign teacher, with no more than 20 hours of teaching per...

Primary Homeroom Teacher Hainan Campus

The goal of Haidian Foreign Language Academy is to develop students that have the skills to be successful in both a Chinese and Western...

Related articles:

Bo’ao Forum for Asia (BFA) Agenda Overview

Discussions on investment, technology, and climate action at the Boao Forum for Asia 2024 Annual Conference. Agenda Overview: March 26-29

Hainan Summer Safety: Preventing Poisoning from Toxic Plants

Recently, there has been a series of incidents in Hainan involving illnesses triggered by mistakenly picking and ingesting toxic plants. Learn how to avoid poisoning from toxic plants as summer approaches.

Hainan Free Trade Port Encouraged Industries Catalogue (2024 edition)

Everything you need to know about the Hainan Free Trade Port Encouraged Industries Catalogue (2024 edition)

Free Hepatitis B Vaccination Program for 20-40 Year-olds Launched in Hainan

Hainan Province launches free hepatitis B vaccination drive for 20-40 age group, aiming to boost public health resilience

Get weekly email updates for new articles published!

Haikou
overcast clouds
23.7 ° C
23.7 °
23.7 °
88 %
3.7kmh
95 %
Thu
28 °
Fri
28 °
Sat
31 °
Sun
33 °
Mon
36 °

Cosy Stays Beyond the Ordinary

Relax, Unwind, and Explore Hainan's Hidden Gems

Romantic Turkey Halal Restaurant

Experience the Essence of Turkey at Romantic Turkey Halal Restaurant!Step into a culinary haven where the heart of Turkey comes alive on your plate....

Iron Hand Coffee

At Iron Hand Coffee, we specialize in both specialty blends and classic black or white coffee—all at prices that won't break the bank. Our...

Golden Platter’s Culinary Lab Hainan Cuisine

If you're looking for a new modern take on Hainan cuisine, Golden Platter's Culinary Lab is well worth a visit. You can order straight from...
spot_img

Bored? Need to get out more?

Latest News ...

China-Thailand Visa Exemption Agreement Takes Effect: Visa-Free Travel for Passport Holders

China-Thailand visa pact begins Mar 1st, allowing 30-day stays for passport holders, hassle-free journeys for closer ties

Fourth China Int’l Consumer Products Expo: Latest Developments and Key Highlights

The Fourth China International Consumer Products Expo is nearing 90% completion, as thousands of exhibits from almost 50 countries and regions are confirmed for participation.

Hainan Cuts Down Payment for First Time Home Buyers

Hainan Province has moved to cut down-payment ratio for first-time homebuyers, the latest region in the country to ease mortgage policies to boost slumping home sales.

Hainan Responds to Lunar New Year Travel Surge

As Lunar New Year travel surges, Hainan grapples with congestion. Increased flights and ferry services deployed to ease stranded tourists
spot_img

Looking for an international pre-school in Haikou?

Flora's International Preschool has three preschools in the Haikou area. Our schools follow a European curriculum

Continue Reading ...

The Porch Café Friday Special; Baked Beef Chimichangas

Introducing our Baked Beef Chimichangas – a tantalizing twist on traditional comfort food that's sure to become a family favourite! Tender, seasoned beef wrapped in a warm tortilla, baked to golden perfection, and served with all your favourite toppings. With each bite, you'll experience a burst of flavour reminiscent of home-cooked goodness.

Haikou Bay Performing Arts Centre Grand Theatre March Events

This March, immerse yourself in the timeless ballet composed by Pyotr Ilyich Tchaikovsky as well as the melodies of Wolfgang Amadeus Mozart, Ludwig van Beethoven, and Dmitri Shostakovich as their music comes to life on stage ...

Artists and Craftsmen International Exhibition – February 2024

Join us for a celebration of creativity at the Artists and Craftsmen International Exhibition, taking place on February 23-25, 2024, from 16:00 to 22:00 at Le Cape Shopping Mall.

Get weekly email updates for new articles published!

Never miss another important notice or event. Be informed of what you need to know, when you need to know it.