As soon as you have incorporated a business, it is mandatory to hire the services of accountants in China in order to control better the financial operations, in complete respect and agreement with the Accounting Law in China. It is good to know that in this direction, our company formation specialists in China can offer in-depth details and guidance for your smooth business operations.
| Quick Facts | |
|---|---|
| Who requires accounting services in China | International companies, alongside with the local ones, must comply with the accounting rules in China. |
|
Applicable accounting legislation in China |
– Accounting Law in China, – Chinese Accounting Standards (CAS), – IFRS (International Financial Reporting Standards) |
|
Types of accounting services we offer |
– company accounts maintenance, – bookkeeping, – payroll, – preparation and filling of annual financial statements, – tax reports on request, – tax registration |
| Tax advice and compliance |
Individuals and companies in China must align with the tax regulations like registration, preparation and filings in a timely manner. |
| We offer support for tax registration |
Registration for VAT, income tax, social contributions |
| Financial planning for company owners in China |
Tax investment strategies can be provided to our customers by our accountants in China. Risk-free reports can be drafted. |
| Risk assessment and evaluation |
Evaluating the business risks in the firm, with the help of tax reports and the experience of our Chinese accountant |
| Types of audit services |
Internal and external audits are the most performed. Companies might also require forensic or operational audits. |
| Tax minimization methods available |
Charities and retirement plans are recommended for business owners in China. The advance payment of loans is also a solution. |
| Personalized financial consultancy services |
Large corporations or individual customers can solicit dedicated financial consultancy services implying expert opinion and specific business plans. |
| Investment consultancy for high-net-worth individuals |
Investment options and report analysis of taxes as optimal solutions for international or local entrepreneurs |
| Financial and analysis reports for companies |
A financial report can highlight the business direction based on tax verification. Measures can be implemented for vulnerable departments in a firm. |
| Human resources services available |
We can manage staff recruitment, drafting the work contracts and administration-related services involving employees. |
| Expertise provided by certified accountants (YES/NO) |
Yes |
| Fiscal year in China | From January the 1st to 31st of December |
Table of Contents
Accounting services for a company in China
From the beginning, we mention that the Chinese accounting standards are also applicable in mainland China and respect the worldwide international accounting rules, known as the IFRS (International Financial Reporting Standards). On request, our team of advisors can be chosen for accounting purposes of the selected business structure in China. We can offer the following accounting services at any time:
- bookkeeping, payroll, and financial annual statements preparation and filing;
- VAT registration and tax filings according to the legislation of the country;
- tax advice and tax minimization methods for your company in China;
- account payable services (we can manage the payment of invoices, and run the bank accounts).
If you would like to benefit from proper accounting services for your company in China, we suggest you get in touch with our Chinese agents in company incorporation.
Bookkeeping services in China
Under Chinese law, bookkeeping and records of the financial activities of a company must be kept for at least 15 years. The same law mentions that all business transactions in China must have a fapiao or tax invoice which shows that the Chinese authorities will receive the tax payment. In other words, fapiaos are the legal statements that companies pay their taxes in China. In this direction, firms in China are obliged to keep all invoices (incoming and outgoing) with the help of bookkeeping. We also mention that our team of advisors can help you with preparing and drafting the documents for tax registration or VAT returns. Besides bookkeeping, payroll services are mandatory in a firm: we can help you manage the registration for social contributions, employee registration, and salary calculation.
Interested in a WFOE in China? With the help of our local company formation representatives in China, you will be able to discover what formalities are involved and how you can be helped. Once you have decided on the name of your company, checks can be made in order to reserve it. Next is the opening of a bank account for depositing the minimum share capital and for the future activities of the company. You can find out more information about the formalities involved from our specialists.
Accounts receivable services in China
The accounts receivable services can be offered by our team of advisors in China who can help business persons handle operational risks in compliance with the laws in China.
Payroll services in China – What you need to know
Payroll services are important aspects part of accounting matters in China. This kind of service refers to payroll tax calculation and also payroll records of employees in a firm. We have a team with experience and the necessary skills for payroll services for your company in China, so you can simply address your inquiries about the necessary accounting services and let us handle them.
Tax minimization for companies in China
Many entrepreneurs in China decide on tax minimization tools at a certain point, as part of a business strategy. This kind of financial instrument can help a company owner pay fewer taxes in China. Some specific examples refer to advanced payment of company loans or credits, charity creation, or retirement plans, to name a few. A tax minimization process can be entirely created and presented by one of our accountants in China who will attentively analyze the financial status of the company registered in China, in order to propose the necessary and recommended solutions. Tax minimization methods are optimal solutions for companies that need to cut down the amount of taxes, so, if you would like to know more about these aspects, please feel free to solicit the support of our team of accountants in China.
What to consider when choosing our accounting services in China?
Accounting services are important to any kind of company registered in China, regardless of the activities developed. When choosing an accounting firm in China, it is important to know from the start the type of services you need and then verify if the chosen accountants are certified or not. The experience of an accountant will weigh much at the time one decides on choosing the necessary financial specialist for the company. We remind you that our team of accountants in China are certified specialists and have experience in a number of accounting matters, plus, they use the accepted programs and tools at international standards. Tax planning, bookkeeping, and payroll services are part of accounting in China and are important services a company can receive, so feel free to get in touch with us.
Other accounting services we can offer in China
Knowing the business needs of entrepreneurs, our team of accountants can help them with bank payment management and accounting control procedures in the firm. Let our team take care of the mandatory requirements in your business, linked to accounting matters.
Financial planning in China
Financial planning in China refers to the ways in which your company can handle profits in a smart manner. There are numerous strategies that can be adopted in your firm when thinking of financial planning, like educational and retirement plans or managing debts.
Differences between Chinese and International Accounting Standards
Chinese Accounting Standards (CAS) and International Financial Reporting Standards are quite similar, but they do differ from specifics points of view that can be interpreted here:
- The CAS rules are more detailed in comparison with IFRS in the case of merging two companies managed by a single entity. For instance, CAS requires reaffirmed comparative numbers while IFRS does not impose such a rule.
- In the case of valuation methods for fixed assets in China, the IFRS allows the selection of the valuation method for specific categories of fixed assets that are valued using the historical-cost procedure or re-evaluation. In the case of CAS, only the historical cost for valuation enters the discussion.
- The Chinese authorities might delay the implementation of new IFRS updates that need to be integrated into the CAS. This happens because the financial authorities in China must first verify the new IFRS updates before accepting them.
The differences between Chinese Accounting Standards and IFRS can impact the parent companies with subsidiaries in China when preparing the company books. However, specific programs and software are normally adopted by international companies with establishments in China. More about accounting in China can be discussed with our specialists.
Aligning with the accounting requirements in 2022
The Chinese financial authorities recommend business owners align with the updates of the accounting requirements for businesses in this country. The new accounting standards on key performance indicators and corporate financial statements must be attentively reviewed and examined before communicating them with the company owners and relevant authorities. Bills and accounts receivable might be reclassified as financial assets at reasonable value through other complete income, according to recent accounting updates in China. More about accounting in China and recent updates can be explained by our specialists in the field. You can send us an email or request a call back if you want accounting services for your company in China.
Respecting the accounting matters in China as a foreign investor
When you decide to open a company in China, you must consider the accounting system implemented in this country. You will thus be able to overcome the possible problems of interpretation of Chinese Accounting Standards, especially if you turn to a specialist in the field. We will review some important aspects to take into account when establishing a business presence in China:
- CAS or Chinese Accounting Standards are the rules by which a foreign company in China should be guided. Thus you will be able to remain compliant with the legislation in China regarding the accounting required for a business.
- The recommendation of the specialists in the field is to translate the accounts of a Chinese subsidiary in order to help the parent company in making the financial-accounting reports.
- Any CAS update is provided by the Chinese Ministry of Finance, therefore it is essential to keep this in mind in order to successfully implement any such update.
- Try to avoid delays in financial reporting with the help of an accounting firm in China. You will thus be sure that you will not have to pay penalties for non-compliance with the accounting regulations in China.
Therefore, considering the above aspects, you can correctly comply with accounting in China. It is important to collaborate with the relevant institutions, as well as to access accounting services in China for the optimal functioning of the foreign company you own in China.
Challenges related to Chinese Accounting Standards
As the owner of a foreign company in China, the recommendation is to use the specialized services of an accounting firm in China. There are situations where Chinese Accounting Standards cannot be fully understood or implemented successfully in the company. Such cases can only complicate the business direction of a foreign company with subsidiaries or branches in China, at least from an accounting point of view. Here’s what you can do to avoid situations like this:
- Accounting in China has experience with incorrectly managed financial accounts and can offer solutions for companies facing such difficulties.
- Any company has settled targets from a financial point of view. With the help of a specialist in the field, who knows Chinese Accounting Standards, you can benefit from tax compliance, optimization, and all sorts of strategies to achieve the established goals.
- And last but not least, Chinese Accounting Standards can be successfully implemented in a company, if you collaborate from the very beginning with accounting in China. His/her experience is beneficial and can help you better understand the legislation related to important financial aspects of a company.
How accounting updates are implemented in China
IFRS can periodically come with updates that help companies to function better from an accounting point of view. CAS will then take over the respective changes, but this may be delayed. This is where the Ministry of Finance in China intervenes, which reviews the updates offered by IFRS, and then decides which ones are suitable for Chinese companies, a practice that can take quite a long time. Also, the institution mentioned above can refuse updates offered by IFRS if they are not relevant for business in China and cannot be adopted by CAS.
Facts about taxation in China
The taxation regime in China is quite appealing to international entrepreneurs who want to start a business in this country and prepare from this point of view. Developing companies in specific Chinese regions is highly beneficial for foreign entrepreneurs. A fixed corporate tax of 15% rate is imposed in such cases. Otherwise, the corporate income tax in China ranges from 10% to 25%.
The standard VAT rate in China is set at 13% and it is imposed on most goods and services for sale purposes. There are lower VAT rates for food products, communication services, real estate, logistics, and transportation (10%), financial services, and insurance (6%). There are varied tax exemptions for entrepreneurs in China, but for a proper understanding of the benefits in this sense, feel free to talk to our specialists.
FAQ about accounting in China
1. Can I receive complete bookkeeping and payroll services in China?
Yes, these are important services, part of the accounting matters we offer for companies registered in China. You can solicit complete information about our services from our accounting firm in China.
2. Can an accounting firm handle the annual financial statements?
Yes, this is another important aspect of the accounting services we offer for companies in China. The annual financial statements are significant documents that must be submitted to the entitled financial authorities in China.
3. Can I get support for tax registration and other related matters?
Yes, our specialized accountants in China can provide entire support for tax registration in China, plus all aspects that concern a company seen as a taxpayer in this country. Send us your inquiries if you want to know more about tax registration for companies in China.
4. How can I choose a good accountant for my firm in China?
First of all, one should check the experience of the selected accountant and verify if he or she is certified in this field. Our accounting firm in China is at your service if you want complete services. We remind you that our specialists are certified accountants in China.
5. Should I externalize the accounting services in China?
Yes, many entrepreneurs would rather hire the services of an accounting firm instead of creating a whole department. This way, you have the guarantee that all the financial aspects are entirely supervised, in a very professional manner. Please talk to our team for extra details.
6. Can I ask for audits in China?
Yes, a company in China requires internal and external audits that can reveal the financial status of the business. We have experts in this field who can tell you more about audits in China.
7. Can I get support for financial statements in China?
Yes, the preparation of financial statements of companies in China can be managed by our specialists in the field. The entire accounting area can be covered by our specialists.
8. Can I ask for support for financial planning for my company in China?
Yes, one of our advisors can tell you more about the financial planning required for your company. More about accounting in China can be discussed with our experts.
9. Can I ask for tax minimization methods in China?
Yes, many tax minimization methods can be implemented in your firm. One of our accountants in China will analyze the possibilities and implement the best solutions for your company in China.
10. Why should I choose an accountant in China for my company?
A certified accountant has experience in this field and can provide the needed support for a company registered in China. There are many fields that can be covered from an accounting point of view, so feel free to get in touch with our experienced accountants in China and find out more about the services we can offer, tailored to the needs of the firm you own.
Investments in China
China remains one of the main business hubs in the world and home to large companies that activate in manufacturing, IT, tourism, automotive, and many other significant sectors. There are major foreign investment projects that already have success in the Chinese markets, and the following facts and numbers highlight a part of the business climate and economy in China:
- The total FDI stock for 2019 stood at around USD 1, 769 billion;
- According to the 2020 Doing Business report issued by the World Bank, China ranks 31st out of 190 economies in the world;
- China was the second-largest FDI recipient in the world, after the USA, in 2019;
- The major investors of China are the USA, Singapore, South Korea, the Cayman Islands, Japan, the Netherlands, Germany, and Taiwan.
We kindly invite you to benefit from the accounting services in China offered by our team of consultants, so please feel free to contact us at any time.