Initial Setup of Accounting and HRBe Well Prepared for Your Company Operation in China
COMPANY INCORPORATION
Accounting & Taxation
Audit & Assurance
Get A Free Quote
Submit a business inquiry online. We will be in touch with you shortly.
- Preparing for bookkeeping and accounting.
- Preparing for tax filing and invoice management.
- Preparing for the payroll of employees.
Tax Assessment
When the company obtains the business license, the company is registered with the Tax Bureau too. The company shall start the monthly tax filing from the same month, even if there is no business yet.
To declare the tax and issue the invoices if any, the company shall prepare the required documents to compile the application package for tax assessment purposes. After submission of the application package and discussion with the tax officials, the company will obtain the final approval on confirming the applicable tax liabilities, applying the Golden-tax filing system, and purchasing and installing an anti-counterfeiting invoicing and tax controlled system & printer.
The VAT general taxpayer status should be applied when the company will receive special invoices for the deduction, VAT rebates for export, or your annual income is more than 5 million CNY.
Open Company Accounts of Social Security
In compliance with P.R.C. labor law, social insurance is required for both foreign and local employees. And the housing fund is mandatory for local employees too. To report and pay for social security, the company shall open an account in the social insurance system and an account in the housing fund system. Then the company can register the employees and pay for their social security via the systems. For some cities, the company is only allowed to open the accounts when there is at least one employee on board.
Accounting / ERP System Setup
Sinovest will discuss with the management to understand the business model and process of the company, then establish the Chart of Accounts (COA), accounting and reporting systems to ensure they are in compliance with China accounting laws, rules, and regulations as well as the specific requirements from the management or head office.
Frequently Asked Questions
After a company is registered in China, the company is required to start the monthly tax filing in the second month, even if there is no business yet. To prepare for the tax filing, the tax assessment of the company shall be done in advance.
Generally speaking, a company can use any accounting / ERP system to satisfy its business operation. However, the COA in the system shall compliant with the Chinese Generally Accepted Accounting Principles (GAAP). Unfortunately, some popular accounting system, such as Zero and QuickBook, doesn’t support it. Sinovest can bookkeep in a local accounting system, then adapt the accounting book into the accounting system and specific requirements from the client.
Social security, including social insurance and housing fund, are calculated from the salary of the employee and a flexible rate. The rate is different in different cities. And the company can decide the rate from a range in some cities. Generally speaking, the additional cost of social security is from 17% to 35% of the gross income of the employee. Sinovest will help you to simulate the cost of the employee and propose the proper rate to the client.