Australian businesses looking to venture into new markets are attracted by the opportunities China has to offer. In recent years the Chinese government has implemented new regulations, which have helped simplify the foreign direct investment process. However, China is still a unique market with a landscape that requires careful navigation.
Enspira Financial and Allinial partner SBA Stone Forest are working together to equip Australian businesses with the information and support they need to expand their businesses into China.
A Proven System
Incorporation of business entities
The approval of Foreign Investment Enterprise (FIE) in China depends on the nature of the proposed project. The Ministry of Commerce (MOFCOM) and State Administration for Industry and Commerce (SAIC) have overall responsibility for approving FIEs, and all documents are processed through them.
Taxation and accounting
In China, the tax year is a calendar year. You must file and pay your taxes according to the policies set by the State Administration of Tax (SAT) and the Ministry of Finance.
A unified accounting system was implemented for business enterprises with effect from 2002. The issuance of these regulations by the Ministry of Finance has meant specific accounting standards designed to converge with International Financial Reporting Standards (IFRS) and accounting interpretations.
China have structured labour contracts and as a foreigner you will need a F or M Visa if you plan to work or do business in China. The working hours, salary and staff benefits must all be in the labour contract when hiring local staff in China.
Intellectual property rights
An intellectual property right in China is a term referring to a brand, invention, design or other kind of creation that a person or business has legal rights over.
Registration of copyright is not compulsory to receive copyright protection. Foreign enterprises can appoint an agent authorised by the State Intellectual Property Office (SIPO) to handle their patent applications. In addition, they can appoint an authorised trademark agent to handle their trademark registration.
Listing in China and Singapore
Mainland China has two stock exchanges, located in Shanghai and Shenzhen. Both exchanges are governed by the China Securities Regulatory Commission. There are three boards designed for different types of companies.
Companies may also be attracted to list on the Singapore Exchange (SGX) for various reasons. SGX is recognised as a wealth management hub, with the largest institutional investor base in Asia.
Read how we’ve helped a Melbourne Business expand to China.