The words on the paperwork, in plain English
43 terms that appear on a Chinese business licence, a bank form or a tax filing — what each one actually commits you to. Where the rule differs in practice, the definition says so.
A
1 term- Annual report年度报告
- The public filing every Chinese company makes to the market regulator between 1 January and 30 June, covering shareholders, capital, headcount and trading status. It is free to file, and an entity that misses it is listed as abnormal operations until it is corrected.Annual compliance calendar
B
3 terms- Beneficial owner (UBO)实际控制人
- The natural person who ultimately owns or controls 25% or more of a company, directly or through a chain of entities. Chinese banks require the chain to be documented down to that person before a corporate account is opened.Opening a bank account
- Business licence营业执照
- The certificate issued by the market regulator that brings a company into existence and states its name, registered capital, scope, address and legal representative. Chinese registration is licence-based: the company exists from the date printed on the licence, not from a later filing.
- Business scope经营范围
- The list of permitted activities printed on the business licence. Wording is drawn from a standard catalogue, and any activity requiring pre-approval must be licensed before it can be added to the scope.
C
4 terms- Capital account资本金账户
- A foreign-currency account used to receive a shareholder’s capital contribution. The bank registers the inflow with SAFE, and conversion into RMB for permitted purposes is handled through the same account.Opening a bank account
- CIT reconciliation汇算清缴
- The annual filing that settles corporate income tax against the year’s actual profit, due by 31 May of the following year. It depends on the statutory audit report, which is why the audit is finished in April rather than commissioned in May.Annual compliance calendar
- Company seals公司印章
- Physical chops used in place of signatures on contracts, bank instructions and filings. A new company typically has four: company seal, legal representative seal, finance seal and contract seal — all of which the bank requires before a corporate account can be opened.Opening a bank account
- Corporate income tax (CIT)企业所得税
- China’s tax on corporate profit: 25% standard, 15% for high and new technology enterprises, and an effective 5% for qualifying small low-profit enterprises.China tax rates 2026
D
2 terms- Dividend withholding tax股息预提所得税
- Tax deducted when a Chinese company distributes profit to a non-resident shareholder: 10%, reducible to 5% under a double tax arrangement where the recipient is the beneficial owner with economic substance.Getting money out of China
- Double tax arrangement避免双重征税协定
- A treaty between China and another jurisdiction that allocates taxing rights, reduces withholding rates on dividends, interest and royalties, and can relieve employment income. Benefits are claimed with documentation, not applied automatically.
E
1 term- Employer of record (EOR)名义雇主
- A local entity that employs staff on your behalf, either before your own company exists or instead of incorporating. It removes the registration delay, but adds a margin and leaves the employment relationship outside your direct control.Hiring and payroll
F
3 terms- Fapiao发票
- The official tax invoice issued through the tax authority’s system. A company cannot be paid for a sale without issuing one, and input VAT can only be credited against a valid fapiao — which is why invoice control is a compliance function, not a billing detail.China tax rates 2026
- Foreign-invested enterprise (FIE)外商投资企业
- A Chinese company with foreign ownership, whether wholly foreign-owned or shared with a Chinese partner. All are subject to the Foreign Investment Law, to foreign exchange registration and to an annual statutory audit.
- Free trade zone (FTZ)自由贸易试验区
- A designated area with faster registration, freer cross-border capital movement and, in some zones, a shorter negative list. Beijing’s zones suit service and technology companies more than manufacturing.
G
2 terms- General taxpayer一般纳税人
- A VAT status that allows input VAT to be credited and requires monthly rather than quarterly filing. Registration becomes compulsory above the annual sales threshold and is voluntary below it — but a company that registers cannot usually revert.China tax rates 2026
- Golden Tax System金税系统
- The tax authority’s national invoice and data platform. In its current phase it matches invoices, bank flows and declarations across the country, which is why an unreported transaction is difficult to keep hidden and why reconciliation matters more than documentation after the fact.
H
2 terms- High and new technology enterprise (HNTE)高新技术企业
- A status that cuts corporate income tax from 25% to 15% for three years. It requires owned intellectual property in China, an R&D expense ratio measured against revenue, and a defined share of revenue from high-tech products or services. The certificate is re-examined, not renewed automatically.China tax rates 2026
- Housing fund住房公积金
- A mandatory savings contribution for housing, paid by employer and employee at the same rate within a 5–12% band in Beijing. It is not a tax: the balance belongs to the employee and can be used for a home purchase, rent or, on departure, withdrawn.Hiring and payroll
I
3 terms- ICP filingICP 备案
- The mandatory registration for any website hosted on mainland Chinese servers. It is filed through the hosting provider and is separate from the business licence; an unfiled domain is blocked rather than fined.
- ICP licenceICP 许可证
- A commercial licence required for websites that charge for online content, operate e-commerce or provide value-added telecom services in China. It is a separate approval from the ICP filing and takes considerably longer.
- Individual income tax (IIT)个人所得税
- Tax on employment and other personal income, progressive from 3% to 45%, withheld monthly by the employer on a cumulative basis and reconciled annually. The standard monthly allowance is RMB 5,000 before special additional deductions.Hiring and payroll
J
1 term- Joint venture (JV)中外合资企业
- A company shared between a foreign investor and a Chinese partner. It is required only where the negative list caps foreign ownership, and it brings board, dividend and exit negotiations that a wholly foreign-owned enterprise avoids.WFOE vs JV vs RO
L
1 term- Legal representative法定代表人
- The person named on the licence who legally represents the company and signs on its behalf. The role carries personal exposure for compliance failures, including restrictions on travel and on directorships elsewhere in serious cases.
N
1 term- Negative list外商投资准入负面清单
- The national list of activities that are closed to foreign investment or capped at a minority foreign stake. Outside the list, 100% foreign ownership is permitted, and the list is the single test that decides whether a Chinese partner is legally necessary.WFOE vs JV vs RO
P
2 terms- Permanent establishment (PE)常设机构
- A taxable presence in China created by a fixed place of business or a dependent agent, even without a local company. It is the main tax risk of sending staff or contractors to work in China before an entity is registered.
- PRC GAAP中国企业会计准则
- Chinese accounting standards, the basis on which statutory financial statements and the annual audit are prepared. Group reporting under IFRS or US GAAP runs in parallel as a management adjustment rather than replacing the statutory ledger.
R
3 terms- Registered capital注册资本
- The amount shareholders commit to contribute, stated on the licence. Since the Company Law effective July 2024 it must be paid in within five years, and banks assess whether it is proportionate to the business plan before enabling transaction limits.WFOE registration cost
- Representative office (RO)代表处
- A liaison office that may research the market, coordinate suppliers and support the parent, but cannot earn revenue, issue fapiao or employ staff in its own name. It is not a separate legal person, so the foreign parent carries the liability.WFOE vs JV vs RO
- Residence permit居留许可
- The permit allowing a foreign national to reside — and normally to work — in China for its validity period. It must be obtained within 30 days of entry on a Z visa, and working beyond that window is overstaying.Hiring and payroll
S
7 terms- SAFE国家外汇管理局
- The State Administration of Foreign Exchange, which regulates cross-border capital flows. Capital contributions, dividend remittances and the annual registration of the foreign-invested equity position are handled through the bank under SAFE rules.
- Small low-profit enterprise小型微利企业
- A company within annual profit, headcount and asset thresholds that pays an effective 5% corporate income tax. The thresholds and the policy period are set annually, so the position should be confirmed for the year in question.China tax rates 2026
- Small-scale taxpayer小规模纳税人
- A VAT status using a 3% levy rate with no input credit, suited to companies with low turnover. The status ends when annual sales cross the threshold, and a company that voluntarily becomes a general taxpayer generally cannot revert.China tax rates 2026
- Stamp duty印花税
- A transaction tax on specified contracts and on capital contributions, at 0.005%–0.1% depending on contract type and 0.025% on subscribed capital. It is small per contract and material on a large capital increase.China tax rates 2026
- Statutory audit法定审计
- The annual audit of financial statements by a licensed Chinese CPA firm, required of every foreign-invested enterprise and completed before the 31 May corporate income tax reconciliation. The report is issued and signed by the CPA firm, not by the bookkeeper.Annual compliance calendar
- Super deduction研发费用加计扣除
- The 100% additional deduction for qualifying research and development expenditure, which reduces the taxable base rather than the tax rate. It requires project-level documentation and is reviewed, not granted.China tax rates 2026
T
2 terms- Thin capitalisation资本弱化
- The rule limiting the deduction of interest where debt from related parties exceeds a 2:1 debt-to-equity ratio. Interest above that ratio is not deductible for corporate income tax.
- Transfer pricing转让定价
- The pricing of transactions between related companies. China requires arm’s-length pricing, and a defensible benchmark study is worth more than an aggressive position that is later adjusted with interest.China tax rates 2026
V
2 terms- Value-added tax (VAT)增值税
- Tax on the supply of goods and services at 13%, 9% or 6% depending on what is supplied, with a 3% levy rate for small-scale taxpayers. The rate follows what is invoiced, not the industry label of the company.China tax rates 2026
- Variable interest entity (VIE)协议控制
- An offshore holding structure that controls a Chinese operating company through a set of contracts rather than equity, used where foreign ownership of the activity is restricted. It is a contractual workaround with enforceability risk, not a licence to operate.Equity design
W
3 terms- WFOE外商独资企业
- A wholly foreign-owned enterprise: a Chinese limited company owned 100% by a foreign investor, able to invoice customers, employ staff and repatriate profit. It is the default vehicle in any sector outside the negative list.WFOE vs JV vs RO
- Withholding tax预提所得税
- Tax deducted at source on payments to non-residents — dividends, royalties, interest and certain service fees. The rate depends on how the income is characterised and on whether a treaty applies.Getting money out of China
- Work permit外国人工作许可证
- The permit authorising a foreign national to work for a specific employer in China, graded A, B or C. It is issued to the company rather than the individual, and it must exist before the first day of work.Hiring and payroll
Next step
Talk to someone who has done this before
A 30-minute call in English, no obligation. We will tell you what your structure should look like, what it costs and how long it takes — including the parts other firms leave out.
