Malaysia Hotline: +603- 2141 8908
Chengdu FIPE Introduction
Foreign-invested
partnership enterprise (FIPE) is an unlimited liability business entity at
least one of whose partners is a foreign investor. Both foreign individuals and
legal entities can be partners of a FIPE. The term partnership enterprise
refers to general partnerships and limited partnerships. A general partnership
enterprise may be formed by general partners who bear unlimited joint and
several liability for the debts of the partnership. The general partners share
unlimited liabilities for the debt of the partnership. On the other hand, a
limited partnership enterprise is formed by a combination of general partners
and limited partners where the limited partners bear the liabilities for the
partnership's debts to the extent of their capital contributions.
A
partner may contribute capital to the partnership to garner a share of the
partnership's profits or losses. The capital contribution may include money,
intellectual property right or other properties, and even labor services at a
valuation determined by agreement among the partners. As for profit
distribution, the default format is to follow the percentage of capital
contributions made by the partners. However, it can be fully decided by the
partners provided in the partnership agreement in the way unnecessarily in
proportion to the capital contribution. Generally, a FIPE as a whole is only
subject to Business Tax whose rate in most occasions is 3-5% of the turnover.
No corporate income tax is required. The partners shall pay respectively their
partnership income tax.
Why not Start Your Own Business
by Setting up a Chengdu FIPE?
Partnership
Enterprise has been available only to Chinese citizens for nearly 15 years
since August 1, 1997 when the Partnership Enterprise Law of PR China took
effect. However, since March 1, 2010, according to the Administrative Measures
for the Establishment of Partnership Enterprise in China by Foreign Enterprises
or Individuals, FIPE is newly available for foreign investors who intend to
start their own business here in China.
Compared
with WFOE, RO and JV, FIPE is the most convenient way for foreign investors to
set up business in China. It is especially tailored for professionals, like
architect, fashion designer, private equity investor, who are highly motivated
to establish business presence in Chinese market. Unlike WOFE, foreign partners
in FIPE are relieved of doubly levied capital income tax; also there is no
additional process of application for pre-approval from Chinese Ministry of
Commerce, no compulsory minimum registered capital. The daily maintaining
expenses of a FIPE is much lower than WFOE or RO. When foreign investors
finally want to stop their business in a FIPE, they can simply quit it by
signing agreement with other partners. By the way, the process to close a FIPE
is very flexible and convenient as well.
Chengdu FIPE Establishing Steps
FIPE can
apply for business license directly to local State Administration for Industry
and Commerce (SAIC) without application for Certificate of Approval by local Ministry
Of Commerce. However, if a FIPE’s business scope falls into some special
category, for instance, manufacturing, finance, it needs to obtain a
pre-approval as well.
-Name
Registration with local State Administration for Industry and Commerce (SAIC)
-Pre-approval
from local government authorities concerned if business scope entails such
pre-approval.
-Apply
for temporary Business License with local SAIC
-Chops
made by Public Security Bureau (PSB)
-Organization
Code License by local Bureau of Quality and Technical Supervision (BQTS)
-Tax
Certificate by Taxation Bureau
-Registration
and Approval with State Administration of Foreign Exchange (SAFE)
-Open
Foreign Currency and RMB bank account
-Inject
Capital from investor’s overseas bank account
-Capital
Verification Report by Certified Public Accountant (CPA)
-Applying
for Permanent Business License with SAIC
-Financial
certificate Registration with Ministry of Finance
-Statistics
license Registration with local National Bureau of Statistics
Chengdu FIPE Checklist for
clients
1. Five
optional company names and business scope description
2. 2x
investor's ID certified by Chinese Embassy
For
corporate investor as partner, the certified document including:
-Business
license
-Authorization
resolution on signing representative
-The
photocopy of the signing representative’s ID
For
individual investor as partner, certified photocopy of ID and residency
For
individual investor who is living in China need not fulfill ID certification
3. 2x
Bank Reference Letters from investor’s bank to declare a good standing
4.
Investors using RMB as capital contribution need to provide a letter of
approval from SAFE
5. FIPE
legal representative's CV and 8 photos
6.
Registered office address
For
company landlord, 2x photocopy of lease, ownership certificate and business
license
For
individual landlord, 2x photocopy of lease, ownership certificate and landlord
ID
7.
Additional documents when business scope entails approval of government
authorities concerned
Contact
us
If
you have further queries, please contact Tannet
24
hours Malaysia hotline：603-21418908;
24
hours Hong Kong hotline：852-27837818;
24
hours Hong Kong hotline：86-755-
36990589;
Email:
mytannet@gmail.com
TANNET GROUP : http://www.tannet-group.net, http://en.tannet.com.my