Thursday, 7 April, 2016

Reforming Business Registration: China’s ‘Three-in-One’ Licence

As of 1 October 2015, under China’s Social Credit System, newly incorporated companies and companies amending their registration details can apply for a new ‘three-in-one’ licence to a single registration authority. The new licence integrates (1) the business licence, (2) the organisation code certificate, and (3) the tax registration certificate. After trialling the new licence in select areas, it has been rolled out throughout China.

To acquire the new licence, an application form must be completed and one set of documents submitted to the Administration for Industry and Commerce (AIC). Once the application has been approved, the company will receive a business licence with an identification number and the registration will be entered on the national credit disclosure system.

Reform details determined by local AICs

Implementation of the new reform will vary regionally according to the local AIC. For example, in Shanghai the submission of old application forms may still be acceptable for a period after 1 October 2015. As a result, companies in the process of incorporation in Shanghai will not be subject to reapply under the new framework. However, in Beijing, Zhejiang and Jiangsu, the local authorities will only accept new forms.

In some areas such as Shenzhen and Zhejiang, the ‘three-in-one’ licence is a ‘five-in-one’ licence. In these regions, the social security registration certificate and statistics registration certificate have also been included in the new business licence. 

31 December 2017 has been targeted as the official end date for the transition. However, local authorities have their own deadlines, which are a more realistic guide to the programmed transition. For example, the Beijing AIC has announced the end of the transition period as late as 31 December 2020. 

Incorporation process now far easier for companies and entrepreneurs

According to the State Administration for Industry and Commerce, the new simplified process is expected to reduce the average time spent procuring the business licence, organisation code certificate and tax registration certificate from one month to 5-10 working days.

Despite regional differences, this reform is expected to streamline procedures and make the incorporation process far easier for companies and entrepreneurs.  

Please contact Rosario Di Maggio for further information.

 

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