Since the COVID-19 pandemic hit, it has become more important than ever for foreign investors to manage their Chinese companies remotely. Despite the lack of access to China due to strict border controls, many companies are still trying to maintain business operations throughout the outbreak. So, how can you achieve this from abroad?
FAQ: How To Manage Your Chinese Company Remotely During The Pandemic?
The following FAQ answers some of the most common questions we get asked by foreign investors in China whose business interests have been impacted by COVID-19.
We answer them in turn to give you some ideas about the tasks you might face and how to handle them remotely to remain compliant.
1. I have opened my China company but not yet set up my bank account. Can my legal representative set up a business bank account remotely?
In certain areas, such as Shanghai and Hainan, it is now possible for the legal representative to send their passport to China and open the company bank account from abroad. Local banks may approve applications like this made remotely, and in the case of our company, this is made possible due to our longstanding relationships with them.
Note: When shipping your passport to China, it's better to use global couriers such as DHL or FedEx.
If you need help opening your Chinese business bank account, please contact us to handle this for you.
2. I have opened my China company but not yet set up my bank account. Do I have to file for tax?
Some foreign investors are confused about if a company that is not yet trading in China has any responsibilities. You need to be aware that it does. You will still need to file for tax, in this case, zero RMB. Therefore, you will need an accountant in China to help file your tax with the local authorities, even if you aren't declaring anything.
3. I want to do business in China but can't visit China to set up a company for the foreseeable future. Is it even possible right now?
Yes. Hainan offers the opportunity for foreign investors to set up both your company and business bank accounts remotely.
You will still need to go through the usual procedures and provide the necessary paperwork to open a WFOE, but everything can be handled without you needing to visit Hainan in person.
👉 Read this: To explore what's required to open a WFOE in China, download our FREE 2021 WFOE checklist.
4. My Chinese company is trading, but I cannot go to the bank in China to perform the foreign currency settlement. How can I do this from abroad?
You need to send someone representing your company to go to the bank to handle the settlement. They need to have all the relevant paperwork and the legal representative's stamp. Hongda regularly does this for our customers who use our accounting service, including cashier work like this.
5. My Chinese company has been trading for over a year now. Do I need to do an annual return? If so, how can I file for an annual tax return remotely?
In short, yes, you need to do an annual return. You need to be aware that in China, this is known as the 'annual joint inspection', which includes a number of items that are not just tax-related:
- Audit report
- Tax Annual return
- Commercial Bureau Annual Report
- EITC Annual Report
- Foreign Currency Report
- Tax inspection
If your company has been trading for over 1 year, these are the responsibilities you'll have in the annual return (it may vary for companies who aren't currently trading).
You will need a Chinese accountant to handle this for you. If they have not made you aware of it, this is a cause for concern, and you will need to check if they're on top of it.
In most cases, the accountant can handle all of the above for you, and you will not need to get involved.
If you're unsure if you can take care of the annual return, let us know. Our team of experts can help handle your accounting in China.
How about you?
Have you been affected by the travel restrictions to China? Are any of these questions similar to what's facing your company? Let us know, and we'll be happy to respond with some advice for your situation.