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Foreign-Invested Commercial Enterprise FICE

FICE is one kind of WFOE styles, which includes Consultancy Service WFOE, Manufacture WFOE, Trading( Wholesale, Retail or Franchise) WFOE,and FICE (Foreign-Invested Commercial Enterprise).

A FICE refers to an enterprise with foreign investment that engages in the following business activities:

Commission agency: Sales of goods as an agent, broker, auctioneer or sales of other goods as a wholesaler through collection of fees on a contractual basis; and the related ancillary services thereof.

Wholesale: Sales of goods to retailers, consumers from industry, trade and organizations, or to other wholesalers; and the related ancillary services thereof.
Retail: Sales of goods to individuals or groups in fixed places or through television, telephone, mail order, Internet, or vending machines; and the related ancillary services thereof.
Franchising: Authorization of the use of its trademark, trade name and operational mode through signing of contracts for the purpose of getting remuneration or franchise fees.

FICE: Pros and Cons

Establishing a FICE is one of the best ways for a foreign company to distribute its products in China. The pros and cons of a China FICE are listed below.

Pros of Foreign-Invested Commercial Enterprise

  • Can sell in RMB to local Chinese customers and issue fapiaos
  • Ability to benefit from VAT rebates if exports are done through the FICE
  • Can take control of the supply chain and expand the range of suppliers in China by purchasing in RMB
  • Can establish and operate branch offices anywhere within China
  • Can be 100 percent owned by a foreign entity
  • Can hire directly
  • Has no annual turnover or minimum asset requirements

FICE can also carry out a wide range of activities, including wholesale, retail and franchising trade activities in China.

Cons of Foreign-Invested Commercial Enterprise

  • Requires registered capital to establish – usually at least RMB500,000 to become a General VAT Taxpayer
  • Can take several months to set up (typically 4-6 months)
  • Export and VAT issues can be complex
  • Need to obtain permission from several bodies

The legal minimum capital under the law is RMB100,000 for a company with multiple shareholders, or RMB30,000 for a single-shareholder company. However, as the registered capital must reflect the needs of the business, it is usually far higher than the minimum requirement. Depending on the type of operation, typical minimum capital required for approval is between RMB500,000 and RMB1 million.

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