Recently updated on April 15th, 2021 at 03:00 am
马吉帝 Majdi Alhmah(General Manager at BFG International China): Some local laws I read imply that any foreign enterprise involved in trade should have higher export than import. While it’s possible for a singo-foreign JV to have higher import than export.
James Halstead (何云骁) (Overseas Liaison Officer Mirfield, West Yorkshire, United Kingdom): I believe there is a Health Store in Beijing (and possibly a branch now in SH also) that deals primarily in imported health products (protein, creatine and the like).
Not the largest enterprise I know, however it can be done.
马吉帝 Majdi Alhmah(General Manager at BFG International China): Hi James, is that store registered as a foreign-owned enterprise?
James Halstead (何云骁) (Overseas Liaison Officer Mirfield, West Yorkshire, United Kingdom): Absolutely no idea! However I have managed to find the name of it: World Health Store.
I have also found the website: http://www.worldhealthstore.com.cn/en/
I am not sure how to find out whether or not it is foreign owned – although if I remember correctly it was opened by an Australian bloke…hang on, I’ll see what this website says.
Doesn’t seem to explicitly say – appears to have been founded by an Australian and a Chinese national – man and wife. I cannot glean much more than that (although they now have 7 stores and a global distribution website…..when I first visited them in 2008 they were only one store in Beijing!)
马吉帝 Majdi Alhmah(General Manager at BFG International China): Thanks for the effort and info James. will keep learning about this. It’s also possible that they are not doing the trade themselves, but they import through a trading company.
Kurt Rihs(Independent Business Consultant at Self Employed): Yes, we have been doing for the last 8 years. I have been helping my foreing friend who is the sole owner of aShanghai registered, foreign invested, trading company with import and export licence. We have not used the export facility so far but import an average of 3 FCL / week of chemicals, mainly from Japan, some from Taiwan and sell all imported products into the China market. We do not use another, local importing or trading agent but clear the goods ourselves and pay import tax and VAT directly to the respective gov. accounts.
Ming HE 何 銘 (Sole Agent – Greater China (Technical Sales Manager)): As far as I know, foreign invested (including JV) companies of manufacturing business can get import/export license easily. For trading companies, export is easy, import than sell inside China is in “local trading” catogary. About 7-8 years ago, you need to have approval from MINISTRY OF COMMERCE to import and sell in China; in around 2006 or 2007, they gave the approval rights to province or city level. That made things much easier. Of course, I am talking about general trading, some special industries like medical have other regulations.
马吉帝 Majdi Alhmah(General Manager at BFG International China): Much appreciated Kurt and Ming He. This is a crystal clear answer to my question. So approving the import-based foreign-invested trading company isn’t similar to the trading company, but it needs a special city/provincial approval (and maybe tax authorities special approval too).
Jai V(Operations and Project Management expert): Majdi, I had registered 2 import and export company here in China for my friends and it depend on what all services you have selected while registering the company as tax structure is different for different good(you can change the services later also by changing the business liecens.
I have dealt in import of foreign raw materials and never faced any problems while doing so, govt. does not take objections one goods which are in shortage(in local market) but yes, import on chemicals and medicines are very difficult.
Steve Powell(Managing Director Airconnect Asia, Hong Kong): Yes you can, As long as you are correctly registered and you charge the VAT on internal sales
Ming HE 何 銘 (Sole Agent – Greater China (Technical Sales Manager)): Hi, Majdi Alhmah, yes. Please note that import and trading insideChina are 2 different concepts. For example, you can have an import license to import an equipment for your own office use, but can not sell it to anotherChina company. Import license is easy, just need to meet some requirements, VAT, registration capital, etc. As a foreign-invested company, in order to have “intra-China trading” in the business scope, you do need approval. I did this in Shenzhen a few years ago, easy in Shenzhen, not sure about other areas, I guess easy in most of the tier 1 cities.
马吉帝 Majdi Alhmah(General Manager at BFG International China): Right Ming He, I’m particularly asking about ‘trading’ companies with the main business scope of importing products from outside outside China and sell it inside China.
Hi Jai. When you registered the company should you define the import/export scope during registration? or define the scope of products can’t be imported?
So can one trading company import scope include: food products, sportswear, appliances…etc?
Steve, any idea about the internal VAT rates? and whether it can be offset against other expenses?
Jai V(Operations and Project Management expert): Majdi, YES. When you register the company, you can define the scope of the company and you will get the business license accordingly.
Ming HE 何 銘 (Sole Agent – Greater China (Technical Sales Manager)): Normally we use “general product trading excluding products with special regulations” in the scope instead of listing all possible products. In the feasibility report (required for foreign invested company) you suppose to give details of the products and business.
General VAT is 17%, when you import, you need to pay import duty and VAT of the CIF value to the customs. Then when you sell the products inChina, VAT invoice includes 17% of the selling price.
Jai V(Operations and Project Management expert): ya, and that’s the reason many companies register in HK so cut down these cost and thats the reason why some imported products in HK is cheaper than mainland as in HK such tax can be avoided.
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