Jenny Zhang, Attorney at Law, Lawyer, Law firm in Dalian, China

Foreign trading company is also called Foreign Invested Commercial Enterpriese, FICE in China. For any foreign investor who intends to establish a trading company in Dalian or other cities in China, rules in Measures for the Administration on Foreign Investment in Commercial Fields (《外商投资商业领域管理办法》）will govern.

Under this Measures, the foreign invested commercial enterprise can be devided into four categories of businesses, including commission agency, wholesale, retail and franchising.

Generally speaking, common trading company belongs to the second categories, wholesaling. Under Article 9, foreign invested commercial enterprise may operate the following business upon approval for wholesaling business:

1.  Wholesaling of commodities;
2.  Commission agency (excluding auction);
3.  Importing and exporting of goods; and
4.  Other relevant matching businesses.

Only those that establish outlets or open stores in China belongs to the first category, the retail businesses, for example, Carrefore.

Minimum Registered Capital Required

There is a popular mistaken belief, the registed capital has to amount to 1,000,000 RMB for setting up trading company. That is the out of date. Under Company Law of P.R.C., the minimum registered capital is 30,000RMB. Now China treats foreign business nationally, so the same amount for setting up a foreign trading company. BUT, if there is just one investor, the minimum amount is 100,000 RMB. Therefore, only the newly established company has 2 or more than 2 investors, the rule of 30,000 RMB applies. Here Please note that  for special goods with large value such as car or heavy equipment, there would be special capital requirement for enterprise.

In practice, we usually recommand our clients to register with 1,000,000 RMB, which approximately is $150,000. On one hand, the business could satisfy the special requirement in registered capital mentioned above in most of  times. On the other hand, we have a lot of supporting reasons when we help drafting the feasibility report. And also the last but not the least, when the procedure of examination of capital injection is over, the investor could be free to use the capital in any way.

Registration Time

It normally takes 90 days to go through the procedures. But if the products trading need special approval from the  concerning Authority, the period will be prolonged.