How to Establish a Successful Trading Company in China

Establishing a Foreign Investment Commercial Enterprise (FICE) in China

When an international company reaches a certain level of success in selling or trading with China, or simply wants a physical presence in the country, it's common to establish a trading company in the form of a Foreign Investment Commercial Enterprise (FICE).

Permitted FICE Activities:

• Expanding sourcing platform and direct care for logistics and quality control
• Purchasing finished or semi-finished products for resale in China as an intermediary
• Importing goods for direct wholesale or retail sale
• Establishing fully operational sales platform and after-sales services
• Working as a support and liaison office for overseas headquarters

Covered Scope:

FICE refers to a foreign investment enterprise engaged in:

Retail: Selling goods from fixed locations or via television, phone, mail, internet, and vending machines.

Wholesale: Selling goods to retailers, industrial and commercial customers, and other wholesalers.

Franchising: Licensing the use of trademarks, trade names, and operational models in exchange for royalties or franchise fees.

Commission Agency Activities: Working as a sales agent, broker, or auctioneer for goods.

Basic Requirements for Establishment:

Foreign investors must meet the following criteria:

• Possess good reputation
• Not commit acts that violate Chinese laws
• Ability to meet the required ratio between registered capital and total investment

Restrictions:

Restrictions apply to FICE dealing in specific products like books, periodicals, newspapers, pharmaceutical products, and agricultural chemicals.

Operating Duration:

FICE operating duration should generally not exceed 30 years, while FICE established in central and western regions should generally not exceed 40 years.

Required Application Documents:

• Written application form
• Feasibility study report signed by all investors
• Contract and internal regulations and their attachments
• Bank credit certificates and registration for each investor
• Audit report for the last year by an accounting company
• Catalog of goods imported and/or exported by the FICE