SJ Grands, expert team on WFOE in Beijing

Today, WFOE Beijing had the chance to sit down with the staff of a major financial firm in Beijing.

SJ Grand is a leading company among the professional services boutique in China. It helps foreign companies to develop their investments in China, by providing tax, accounting, optimization and corporate finance solutions. For more than ten years, SJ Grand built a reputation through its strong expertise on a wide range of services and project.

SJ Grand developed specific services for WFOE creation in Beijing and has valuable experience on this segment. For SJ Grand, WFOE is the most adapted structure to enable foreign company to fully own and control of their investments.

SJ Grand is involved in all the process of WFOE incorporation in Beijing

Thanks to its large and valuable experience, SJ Grand can provide consulting and assistance in every step of the WFOE incorporation in Beijing.

SJ Grand’s team told us that the Shanghai Free Zone significantly changed and simplified the process of WFOE Creation in Shanghai. Indeed, the company incorporation process can be divided by 2 in this zone. It can be completed within 1 month there, while outside the free zone it can be done in 2 months at least. There is not such zone in Beijing, but the possible success of the Shanghai’s project could give some idea to authorities in Beijing, to favor foreign investments.

http://www.sjgrand.cn/wfoe-china

SJ Grand analyses the evolution in regulation law of WFOE registration in Beijing

SJ Grand also described us some revisions in the PRC company law. The purpose is to make the business set up more flexible for imported investments. Thus, there is no limitation on the share of initial capital contribution anymore except for certain companies specified by the law or the State Council.

However, according to SJ Grand, it is still crucial to have large registered capital to start their activity.

SJ Grand gathered Taxes applicable to WFOE in Beijing

See below a table from SJ Grand which describes perfectly the different taxes you will have to look for when registering a WFOE in Beijing.

Christophe Folx

See also : http://marketingtochina.com/sj-grand-celebrates-10-years-china-new-projects/
http://www.wfoe.org/
http://topics.bloomberg.com/china's-economy/

Negotiation in China

The negotiation

The negotiation in China is made on a specific mode. It is essential not to lose its cool and to remain patient during the negotiations.
Business relationships are before any long-term relations implying a confidence and even a common friendship. They are punctuated by numerous dinners, toasts and long interviews.
The identification of an interlocutor having the required qualities is essential at the risk of losing several months, even several years for nothing.
The first gesture during a meeting is the exchange of business cards (card turned to the interlocutor, in two hands).
The given word is a fundamental notion in China, but the signature of a contract remains essential.
The negotiation implies that there is not of losing

How Chinese negotiate with French

For reasons at the same time historic, political and sentimental, France benefits in China of a real capital of confidence and sympathy, which you should not hesitate to exploit. We are besides credited with excellent technical skills, sometimes better than those were attributed in Americans, and of an unequalled innovative potential.

In fact the major difficulty is most of the time the cultural obstacle, with which are confronted all the western companies in China, which is their size or the business sector in whom they intervene. The French people often behave as if they were the most representative sample of the universal humanity and this French "smugness" annoys particularly
Chinese, even if themselves is not outdone on the ground of the national pride and the feeling of superiority. Undoubtedly, the Chinese are proud of their culture and attached to the values which it carries; in the difference near that they do not claim to impose them to the others, but also that they have a deep consciousness of the relativity and the movement of things, ups and downs.

How French can negotiate with Chinese

Many French see in Chinese businessman of very hardly négotiateurs and feel threatened. The least introduced or the most naive think of warning the danger by frontal attacks. Most of the others begin a trench warfare. In both cases, they are wrong of strategy and choose the bad ground. The Chinese become formidable only when their interlocutors put on the uniform of the fighter. In reality, the level of the Chinese negotiators is extremely variable. The sharpness or the spirit of guile which we attribute to the Chinese is unevenly distributed.

In well led negotiations, the first stage of the discussions will aim at determining at the opposing party these not negotiable points. During this phase, the Chinese develop their skill in the art of the covering of the ground and the travel. Supplied questioning and crusader, under diverse angles to whom will be added some laborers of provocation or blocking persisted to arouse your reactions. Most probably, several Chinese interlocutors will take turns in the course of days, even weeks, to test as long the coherence of your proposes, that the resistance of your nerves. It will not be rare that the Chinese question then what will have been said the day before.

Frequently the French negotiators are faulted on two points. A tactical error at first, which consists in taking care of the ground of the opponent rather than with working on its own ground. Try " to explain " to the opposing party where are situated its interests and how it should redefine its position does not appear the best way to protect its own defense, nor to convince moreover. A big strategic fuzziness comes then. No axis of defense, no impassable border result: after hard skirmishes and some psychodramas the French people release everything, and often much more than the Chinese could not hope for it.

Forbes

Harvard

La création de WFOE en Chine

Pour commencer ce blog, une présentation plus précise du WFOE s'impose.

Avantages du WFOE

Le WFOE est une entreprise dont 100% des capitaux sont étrangers (Wholly Foreign Owned Entreprise pour les angliciste). Cette structure permet un contrôle totale de la gestion, des revenus, de la politique RH (si sensibles pour les entreprises étrangère depuis 2013) et des opérations de l'entreprise.

C'est également la garantie de ne pas subir les aléas propres aux partenariats avec des entreprises chinoises.

Mais attention, cette structure peut ne pas être autorisé selon les secteurs. Dans les domaines de l’énergie, des médias ou encore des assurances par exemple. De façon générale, cette pratique est extrêmement réglementée par des dispositions propres au lieu d'implantation. Il est donc bon de connaitre les principales exigences :

Reglementation du WFOE

Au niveau du capital, le minimum requis dépend du domaine d'activité ainsi que du lieu d'implantation. Pour des entreprises de services ou de conseil, il faudra compter autours de 500 000 RMB quand des WFOE d'agro ou de production en nécessiterons le double.
Ajouter à cela la politique préventive du gouvernement chinois, qui rejette généralement les projets d'entreprises sous-capitalisées qui doivent pouvoir supporter l'ensemble des dépenses de la première années.
Les autorités demanderont par la suite la déclaration d'un service comptable.

Le Business Scope sera également demandé par les autorités chinoises, qui veulent être persuadées de l’intérêt de la structure pour le développement économique et le rayonnement de la Chine.

Après la création, le WFOE devra se soumettre à différents impôts. En règle générale, l'ensemble des charges comprendra la TVA, l'impôt de soutien à l'entretien et la construction des villes, l'impôt pour l'éducation et bien sur l'impôt sur les bénéfices.

Pour la gestion du personnel en revanche, le WFOE permet une liberté de gestion importante. Quand un simple bureau de représentation ne peut employer que 4 non-chinois, le WFOE peut obtenir autant de visas qu'elle le désire.