How to Change the Business Scope of Guangzhou Company

In China, a company’s operations are defined by its business scope, a one-sentence description of the industry(s) it is authorized to operate in. Therefore, any significant change to company operations must be preceded by a registered change of business scope.

The wholly-foreign owned enterprises (WFOE) are categorized as one of three types—Service, Trading, or Manufacturing—which differ in terms of their eligible business scope and corporate establishment procedure. Generally, it is much easier to register a change of business scope within one’s existing WFOE category, rather than expand from a Service WFOE into a Manufacturing WFOE, for example.

Often, but not always, a change of business scope will require additional investment into the company’s registered capital, which can considerably prolong the application process. Additionally, depending on the nature of the proposed change of business scope, the enterprise may be required to obtain additional approval or modify their business premises to engage in the specified industry. Lastly, the enterprise will have to renew its Certificate of Approval granted by MOFCOM, this being the distinguishing factor between FIEs and domestic enterprises. These steps must all be completed prior to applying with the Administration of Industry and Commerce (AIC) to change the enterprise business scope, which proceeds as follows:

 

Step 1 — The company should convene a shareholder meeting and obtain a decision to alter the company business scope, including the specific revision(s) to be made. Next, the business scope as appearing in the company’s articles of association should be altered in light of the decision. Within 30 days of this decision, the company should apply at the original AIC of registration using the related application form. Following AIC approval and the payment of related fees, the company will receive the revised business license.

Step 2 — As with any update to a company’s business license, there will be various other forms of documentation that must be updated in light of the revised business scope, including the enterprise’s tax registration. Updating tax registration is quite complex, but is a crucial step in the overall process, as it affects the company’s ability to issue fapiaos (and thereby allow its customers to deduct input VAT).

Even based on the condensed procedure given above, it should be clear that modifying the business scope of a company in China is no easy task. Given the proper planning, however, it can be done. Depending on the specific revisions to be made to one’s business scope, the overall process can carry on for months, excluding the time required for the company to prepare internal documents.

 Touch Law Firm is dedicated to provide business scope changing service in China, as well as company registration in China, tax & accounting, intellectual property, and legal service for you. For further information or to contact us at 020-8355 5515 or email to info@touchlawfirm.com

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Changing Business Scope of a Company in China