SZ, Belgium forge deeper biomedicine cooperation

 Shenzhen Huaya Regional Economic Development Service Center and Belgium’s Wallonia Export-Investment Agency (AWEX) signed a strategic agreement to further deepen cooperation in biomedicine at a forum, a sub-event of the 23rd China Hi-Tech Fair (CHTF), which was held yesterday in Nanshan District.

Didier Denayer, business development and technology counselor of AWEX, said at the Belt and Road Forum for Innovation Cooperation that the signing is a follow-up to the two sides’ collaboration formed in 2019, adding that concrete projects will be mapped out afterwards.

The Belt and Road Forum for Innovation Cooperation, themed around digital information and Belt and Road Initiative opportunities, attracted nearly 200 online and offline participants.

Invited guests, including Jose Roberto de Andrade Filho, head of the science, technology and innovation section of the Embassy of Brazil; Qu Jian, vice president of the China Development Institute (CDI); and Aitor Mate, head economic and commercial counselor of the Economic and Commercial Office of Spain in Guangzhou, delivered speeches at the forum.

De Andrade Filho said that Brazil is accelerating the digital transition of its economy and expecting wider 5G technology implementation. From his viewpoint, 5G development can help spur progress in many sectors such as e-commerce and technology.

Qu suggested in a keynote speech that huge business potential lies in developing countries along the Belt and Road. To seize the opportunities, international cooperation is necessary. “We need to first recognize and then satisfy developing countries’ demands via international innovation cooperation,” Qu said.

The forum was hosted by the China Hi-Tech Fair Organizing Committee Office and organized by the China Hi-Tech Transfer Center and Shenzhen Huaya Regional Economic Development Service Center, a nonprofit service organization that promotes two-way investment and cooperation along the “Belt and Road.”

New SZ-Los Angeles cargo route opens

 A China Cargo Airlines (CCA) flight took off from Shenzhen Bao’an International Airport to Los Angeles, the U.S., on Monday – a first for the airline, according to Shenzhen Special Zone Daily.

This is Shenzhen airport’s second international cargo route and first intercontinental cargo route launched this year after China Central Longhao Airlines added a route to Ho Chi Minh City, Vietnam, on Jan. 6.

CAA’s new cargo route runs four times a week and is operated by a Boeing 777 freighter.

So far, the number of flights on the all-cargo aircraft route from Shenzhen airport to Los Angeles has been increased to 12 per week, boosting North American cargo route capacity.

Shenzhen airport currently has 51 freight waypoints including 31 international and regional ones, which is a new high.

Shenzhen airport’s annual cargo and mail throughput increased by 12.1 percent year on year to 1.56 million tons in 2021, ranking third among the top 10 airports on the Chinese mainland.

International and regional cargo volume increased by 26.8 percent year on year to 650,000 tons, accounting for 41.5 percent of the total.

In 2021, Shenzhen airport introduced eight new cargo airlines including Atlas Air and Southern Air, and added 17 international cargo routes to Chicago, Los Angeles, Bangkok, Singapore, Cologne and Paris.

SZ to reward foreign-invested companies for new projects

 Calls for application have begun for a special 100-million-yuan (US$15.7 million) incentive for foreign-funded enterprises registered in Shenzhen to invest in new projects, Shenzhen Special Zone Daily reported, quoting the commerce bureau.

The 2022 Guangdong Province High-quality Economic Development Promotion Special Fund aims to scale up foreign investment and encourage foreign-invested project establishment across the province, particularly to reward projects using foreign capital to increase investment and expand production, according to the commerce bureau.

The fund application guide said that incentives will be given to new foreign-funded projects, which were established in Shenzhen in 2021, with actual foreign capital amounting to US$50 million and above. These projects will be awarded 2 percent of the foreign capital put into use in 2021, and the maximum funds shall not exceed 100 million yuan.

Last year’s Shenzhen-based new projects with added foreign capital with actual foreign capital amounting to US$30 million and above will also be rewarded according to the same rules.

The fund applications exclude real estate and financial sector projects.

Why Set Up Business Register Company In Shenzhen?

 

Asia-Pacific Hub

Sharing borders with Hong Kong, Shenzhen is endowed with geographical advantages. It is a significant transport hub in the Belt and Road Initiative and Asia-Pacific. Shenzhen is home to an international deep-water port, an international airport, and the largest land ports in Asia, important expressways, and national freight and passenger rails.

The Pearl River Delta upon which Shenzhen is situated has incomparable supporting facilities. Within one-hour drive from Shenzhen, you can procure any main parts or accessory for any industry. Consequently, scientific research can be translated into innovative products rapidly. Shenzhen is within an arm's reach of the most developed market in the world. 

You can travel from Shenzhen to Hong Kong at the drop of a hat, reaching Hong Kong's city center in only 23 minutes, or just a 1-hour drive to Hong Kong International Airport. Within one hour, products can be transported from factory to Shenzhen-Hong Kong ports where they are poised to transport to every corner of the world.

An FDI Top 10 Asia-Pacific Cities of the Future

In China Urban Cities' Transit-Oriented Development Index Report, Shenzhen is No.1 in the City Metro Comprehensive Rank

The growth of international air travelers ranked No.1 in the country

In 2020, Shenzhen's total foreign trade value was RMB 3.05025 trillion, ranking second amongst large and medium-sized cities in the country.

In 2020, container throughput reached 26.55 million TEUs, ranking the fourth in the world.

The growth of international air travelers ranked No.1 in the country

The scale of Shenzhen’s total foreign trade volume ranked No. 2 among large and medium-sized cities in China

With container throughput at 26.55 million TEUs, Shenzhen ranks the fourth in the world.

City of Innovation

Innovation is in Shenzhen's genes. Shenzhen is the first National Demonstration City of Innovation in China. It is developing itself as an international science and technology center and an industrial innovation center, playing a leading role in electronic information, Internet, biology, and new energy industries. Shenzhen has given birth to a large number of high-tech companies such as Huawei, ZTE, Tencent, BYD, and DJI. It is truly a city of innovation.

Shenzhen has been rated as the Best City for Innovation and Start-ups.

Shenzhen has reached  the top of the Forbes China Top 30 Most Innovative Chinese Cities 2018 

The number of PCT international patent applications has been at the top of the country for 17 years in a row.

In The National Innovative City Innovation Capability Evaluation Report 2019 by the Institute of Scientific and Technical Information of China, Shenzhen's innovation capability ranks first among 72 national innovative cities

Second only to Beijing, the number of national high-tech enterprises reached 18,650 in 2020, ranking second nationally.

Shenzhen has been dubbed as "Silicon Delta" by The Economist 

Openness and Inclusiveness

Shenzhen is a window through which China began to reform and open up and a city of immigrants which pools a great number of quality talents, making the city become a brimming vitality. "If you come, you are a Shenzhener", and Shenzhen's unique population structure ends up bursting out strong talent vitality and market vitality, thus forming a unique urban culture that is open, inclusive, innovative and facilitate cultural exchange. In the city of Shenzhen, different cultures and ideas of various countries collide producing all kinds of innovations, creativity and imaginative ideas helping to make Shenzhen a modern international innovative city.

UNESCO awarded Shenzhen the Global Model for the Promotion of Reading

More than 1.75 million people in Shenzhen are registered volunteers

Shenzhen was awarded as the National Harmonious Community Construction Demonstration City

Shenzhen has been named as a National Civilized City for 5 years in a row

95% of Shenzhen residents are from outside of Shenzhen

More than 90% of Shenzhen's populationis of working age

The average age of citizens is around 32.5 years old

Market Vitality

Shenzhen is the city with the deepest level of "market economy" in China. As the first Special Economic Zone in China, its market economy has been well-developed. Shenzhen operates a level playing field and shows respect to all businesses. In 2020, Shenzhen's GDP exceeded RMB 2.77 trillion, making it one of the fastest-growing cities in the world. Shenzhen was transformed from a border town to one of the most developed cities in China.

Shenzhen has given birth to eight Global Fortune 500 companies including Ping An, Huawei, Amer International Group, Evergrande, China Merchants Bank, Tencent, Vanke, and Shenzhen Investment Holdings. Shenzhen is not only a "world-class home for entrepreneurs", but also a "cradle of startup companies."

41st anniversary of Shenzhen Special Economic Zone

In 2020, Shenzhen's GDP was more than RMB 2.77 trillion

Nearly 300 Global Fortune 500 companies invest in Shenzhen

There are more than 3.2 million commercial entities in Shenzhen. Both the total number and density of commercial entities rank first in the country.

Home to 8 Global Fortune 500 companies

(Ping An, Huawei, Amer International Group, Evergrande, China Merchants Bank, Tencent, Vanke, and Shenzhen Investment Holdings)

It was rated by The Economist as the most successful Special Economic Zone among its 4,300 counterparts.

It is among the first batch of demonstration cities in the project of Broadband China and pilot cities of Information Technology for People

In the Global FinTech Hub Report 2020, Shenzhen ranked 6th amongst global financial technology centers, and third in China.

In Global Competitiveness Report 2018-2019, Shenzhen's economic competitiveness ranked fourth in the world.

Efficient Government

The Shenzhen government is one of the most efficient governments in China, aiming to be rule-by-law, and service and clean-oriented. Leveraging the legislative power delegated to Special Economic Zone, Shenzhen has created a fair, transparent, and easy environment for business. As the first Special Economic Zone in China, Shenzhen is also an experimental field and a window through which China began to reform and opening up.

With the goal of marketization, rule of law, internationalization and facilitation, Shenzhen strives to promote a number of reforms, streamline administration and delegate powers, optimize business processes, and take the lead in promoting the reform of the commercial registration supporting system in the country, simplify the process of establishing companies, and stimulate entrepreneurial enthusiasm. Furthermore, the time required to register a company has been reduced 20 working days to only 1.

The Blue Book of Urban Competitiveness 2019 issued by the Chinese Academy of Social Sciences shows that Shenzhen was No.1 in the ranking of Comprehensive Economic Competitiveness of Chinese Cities

In Blue Book of China Urban Development Report in 2019, Shenzhen ranked first on the measure of healthy urban development

In China Rule of Law Government Evaluation Report 2018, Shenzhen ranked first in the evaluation of the level of urban law government

Shenzhen ranked first in the 2018 China Top Ten Highly Efficient Government released by the China Urban Competitiveness Research Association

Coastal Ecology

Shenzhen is a beautiful city in the south to the Tropic of Cancer at the junction of tropical and sub-tropical. The climate is moderate and pleasant. Shenzhen boasts a coastline of 260 km with attractive scenery and charming environment. Shenzhen is proud to have an excellent ecological environment but still steps up efforts in developing green and low-carbon economy, advocating the idea of using resources and energy efficiently to achieve development. Green and low-carbon strategy has become part of the development plan of Shenzhen. 

UNEP's Global 500 Roll of Honor

Shenzhen is one of the most favorable mainland cities amongst expatriates

Shenzhen has 1206 parks

UNEP's Global 500 Roll of Honor, the first International Garden City in China

It boasts one of China's Eight Most Beautiful Coastlines

It was rated as one of the 31 must-see destinations of the world by The New York Times

It was ranked No.2 in the top ten cities and countries worth visiting by Lonely Planet

International Professionals Exchange rated Shenzhen as one of the most favorable mainland cities amongst expatriates

Shenzhen has 1,206 parks and is known as the City of A Thousand Gardens

The energy and water consumption per RMB 10,000 of GDP is the lowest amongst Chinese cities

The air quality is amongst the best in Chinese cities

How to Start a Business in Shenzhen Without a Legal Entity

 

The rules and regulations for foreign companies to do business in China are considered to be strict, depending on the type of industry.

But it is possible for foreign companies to do business in China without WOFE or another type of entity.

Such companies can, for example, sell and import goods into China, have their products manufactured in China, sell their services in China.

There are still various issues that should be considered and which can make doing business in China complicated.

These issues are explained as below:

• Issue 1: a local entity is required for issuing ‘fapiao’

When selling goods and/or services in China, local companies need to issue a ‘fapiao’ which is an official Chinese invoice. This document is important since, without this, local companies won’t be able to deduct Corporate Income Tax and deduct input VAT from their output VAT.

• Issue 2: employees can only be hired by a local entity in China

Both Chinese citizens and expats are allowed to work only for local companies registered in China.

• Issue 3: it is difficult to receive payments from the client without a local entity

Since there are strict Foreign Exchange controls in China and all exchanges in China are administrated by the State Administration of Foreign Exchange (SAFE), if you don’t have a local entity, it is complicated to receive payments.

The Solution to the Above Issues

One of the proposed solutions is the setting of a WFOE in China. In this way, your company can have a local entity and also conduct profit-making activities.

But companies can make use of another solution called PEO or employment outsourcing.

This is probably the best solution in terms of costs and time spent to start the business in Shenzhen. And this is a solution that does not require you to have a local entity in the country.

Basically, investors can rely on local experts in employment and labor law to legally hire the employees on their payroll. These employees will continue to work for you, while the PEO company will manage all the HR and employment relationships.

Employment outsourcing is the most reliable, rapid, and compliant way to have employees hired to work for you in Shenzhen.

Such PEO agencies act as an employer of record (EOR) for your employees directly hiring employees to work for you on your projects.

How to Set Up a Company in Shenzhen

Shenzhen, considered to be the silicon valley of China, is a major hub of startups.

It is a good choice for companies that are specialized in computer software, IT, microelectronics and components, video and audio products, electromechanical integration, and key projects of light industry and energy.

But other industries like pharmaceuticals, biotechnology, and medical equipment are also on the rise in Shenzhen.

When setting up a company in Shenzhen, there are numerous things to consider and hence it is important to seek appropriate legal help.

Registering a company in Shenzhen can also be referred to as Shenzhen company incorporation.

The following are the 4 steps needed to be taken while setting up a new business in Shenzhen:

1. Pick the right location/district

You need to pick the right location for your business. There are 7 administrative districts in Shenzhen – Futian, Luohu, Nanshan, Baoan, Longgang, Longhua, and Pingshan. Hence, it is really important to familiarize yourself with such a big city so as to have numerous options.

2. Find a representative

A representative is important and can help you while registering your company. This help could be with necessary documents and important information that is required.

3. Trademark your intellectual properties

This is a really important step as a grievous mistake you could make is not to trademark your intellectual properties before diving fully into your business. You need to know the agency that can help with this.

4. Hire a qualified staff

This is another important step as the person should be knowledgeable enough to operate the business. Again, you need to know the agency who can help with this as the expertise of staff from young & energetic to experienced will vary with industry type.

Can Foreigners Open a Company in Shenzhen?

Once your business goal is set and everything is planned and you decide to deliver a promising product in China’s market, foreigners can certainly set up branches in China which should be in accordance with the Companies Act and the Commercial Code.

Also, the important thing to note for the investors is that documents of the parent company are necessary for establishing a branch in China.

In China, you have four options to choose from for your company setup:

• Joint venture
• Representative office
• Wholly foreign-owned enterprise (WFOE)
• Umbrella company

Deciding to set up your business as a joint venture will have you to declare that you will run your company with a local partner from China. In this setup, the company is controlled by both foreign and Chinese partners.

The representative office is relatively simple to open than establishing a WFOE but having its own set of limitations as it doesn’t include the option of yielding the revenue as it is strictly for market testing or promoting the product or the service. Setting up an RO option does not yield any revenue because it is strictly for marketing and communication.

WFOE businesses take longer to set up than other options. The only way of paying expenses for such company type is to send money from abroad. Investors need to note that even though RO does not make any profit still they need to pay taxes which is usually calculated as a percentage of the company’s expenses.

A WFOE is a legal entity that is completely owned by foreigners. LLC (Limited Liability Company) is one of the most common type chosen by the majority of foreign investors to be opened in China. A WFOE is free to perform any kind of profit-making activity, pay tax in China and all the profits earned can be sent back to the home country of the investor.

An umbrella company, also called PEO/EOR, is a company that helps in hiring employees for your company in China, or in other terms, it hosts employees or teams for you. Umbrella companies do not actually create structures in China. 

Benefits of Opening a Company in the Shenzhen Free Trade Zone

 

Shenzhen is smaller in size as compared to Shanghai and Beijing, but the city is set to expand the economy to ¥2.6 trillion by the end of 2020.

There are four state-level development zones consisting of the Shenzhen trade free zones:

• Shenzhen Yantian Port Free Trade Zone (Shenzhen Yantian Port FTZ)
• Shenzhen Futian Free Trade Zone (Shenzhen Futian FTZ)
• Shenzhen Shatoujiao Free Trade Zone (Shenzhen Shatoujiao FTZ)
• Shenzhen Yantian Port Bonded Logistic Park (Shenzhen Yantian Port BLP)

The following are the points highlighting why it is profitable to do business in the Shenzhen Free Trade Zone:

1. Lower rate of taxes

There are a lot of financial advantages and tax breaks that make doing business in Shenzhen much easy and profitable. While the national average of corporate tax in China is 30%, Shenzhen Free Trade Zone offers a corporate tax of 16.5%.

2. No duty on warehousing

This means there is no import tax for storing your imported goods. Hence, you are not required to spend hours of your time figuring the import tax and pay for the goods to be delivered in Shenzhen Free Trade Zone. Companies can directly get their goods into the mainland and ship them directly to their respective warehouses. There is no requirement for import tax.

3. Backed by the State Government

Chinese Government attracts a lot of foreign investors by providing incentives and grants. For the companies operating in Shenzhen Free Trade Zone, special ‘bonuses’ and ‘grants’ will be provided to continue doing business in the country. Such monetary incentives are remunerative enough to encourage the companies/investors to operate in Shenzhen Free Trade Zone.