CFO Responsibilities and WFOE Licenses

Last updated: May 2021
The Financial Regulations Guide for Foreign Companies in China

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Regulations in China change relatively frequently. For the most up-to-date regulations, please check in with us.

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    FINANCIAL SERVICES IN CHINA

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    WFOEs in China have many responsibilities, and the CFO carries a lot of the burden. When it comes to registration licenses and financial services in China in general, the CFO is the point of contact with the authorities. The following article takes a deeper look.

    CFO Responsibilities and WFOE Licenses

    Before your WFOE is officially registered in China, you will have to deal with loads of bureaucracy. But once all certificates are collected and approvals are obtained, your company is legally established.

    At this point, it is important to clarify which government offices are relevant to the company’s new CFO. These offices are in charge of financial services in China, and it is the CFO’s responsibility to communicate with them and comply with their regulations.

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    Five-in-One Licenses

    Since 2016, when China rolled out the “five-in-one” reform, applications for business opening certificates have become much more simplified. Rather than approaching five different departments, a single online application to the AIC is now available. The Administration for Industry and Commerce shares the relevant documents with the relevant departments, which will issue the certificates within their jurisdiction. Ultimately, you will end up with 5 different certificates.

    The Business License

    The business license in China is the official document that certifies that the company is legally registered in a specific locality. The business license allows the company to engage in business activities such as employee recruitment in China, invoice issuance and customer interaction.

    The Organization Code

    The Organization Code Certificate is issued by NACAO (the National Administration for Code Allocation to Organizations). It contains 9 digits that appear in all correspondences with different government departments and institutions that offer financial services in China (such as opening a bank account or applying for an export license).

    Tax Registration Certificate

    Setting up a WFOE in China? You need this certificate, which provides proof that the company is registered at the local tax bureau, to which future tax payments will be filed. The Tax Registration Certificate is used in applications for tax benefits, tax invoices, opening a bank account, tax return in China, etc. Generally, the certificate has no expiration date. However, if there are any changes in the business registration, the tax certificate should be renewed.

    Social Security Registration Certificate

    This certificate serves as official evidence that the company is registered with the local authority for filing its employees’ social security contributions.

    Read more about compulsory social benefits required by Chinese employment laws.

    Statistical Registration Certificate

    This certificate is issued by the Local Statistic Bureau, to which the WFOE submits monthly financial reports, such as salaries paid, etc.

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    International Trade

    Companies that deal with international trade, import and export, are required to possess the following certificates:

    Customs Registration Certificate

    This certificate is issued by the local customs office, and is required for carrying out import-export activities.

    Foreign Trade Registration Certificate

    This is the second certificate required for engaging in importation and exportation, and is issued by MOFCOM (the Ministry of Commerce). Without it, the customs authorities will not handle and prepare the imported/exported goods for declaration, inspection and release.

    Last updated: May 2021

    Regulations in China change relatively frequently. For the most up-to-date regulations, please check in with us.