Economy Profile of China

Ease of Doing Business in China

Rankings on Doing Business topics – China

Topic Scores

Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally start and formally operate a company (number)

Preregistration (for example, name verification or reservation, notarization)
Registration in the economy’s largest business city
Postregistration (for example, social security registration, company seal)
Obtaining approval from spouse to start a business or to leave the home to register the company
Obtaining any gender specific document for company registration and operation or national identification card

Time required to complete each procedure (calendar days)

Does not include time spent gathering information
Each procedure starts on a separate day (2 procedures cannot start on the same day)
Procedures fully completed online are recorded as ½ day
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes
No professional fees unless services required by law or commonly used in practice

Paid-in minimum capital (% of income per capita)

Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the limited liability form most common among domestic firms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office.

-Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

-Performs general industrial or commercial activities such as the production or sale to the public of goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes.

-Does not qualify for investment incentives or any special benefits.

-Is 100% domestically owned.

-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the company shares, two owners have 20% of shares each, and two owners have 15% of shares each.

-Is managed by one local director.

-Has between 10 and 50 employees one month after the commencement of operations, all of them domestic nationals.

-Has start-up capital of 10 times income per capita.

-Has an estimated turnover of at least 100 times income per capita.

-Leases the commercial plant or offices and is not a proprietor of real estate.

-Has an annual lease for the office space equivalent to one income per capita.

-Is in an office space of approximately 929 square meters (10,000 square feet).

-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If there is no legal age of majority, they are assumed to be 30 years old.

-Are in good health and have no criminal record.

-Are married, the marriage is monogamous and registered with the authorities.

-Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

Starting a Business – Shanghai

Figure – Starting a Business in Shanghai – Score

Figure – Starting a Business in Shanghai and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Figure – Starting a Business in Shanghai – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Details – Starting a Business in Shanghai – Procedure, Time and Cost

1 Register the company and apply for a Business License Certificate

Agency : Shanghai Administration for Market Regulation (SAMR)

In order to start and operate a new business, an entrepreneur must register the company and obtain a Business License (工商营业执照) from the shanghai Administration for Market

Regulation (SAMR). The applicant must prepare and submit an application online at the website of the SAMR (http://yct.sh.gov.cn). The availability of the company name can be verified during the filing of the application form.

5 days

no charge

Previously, five other licenses were required, the Business License, the Organization Code

Certification, the Tax registration, the Statistics Registration and the Social Welfare Insurance Registration. These have been combined into one license. Upon receipt of an application, SAMR will circulate the application materials to the relevant bureaus mentioned above for registration. After filing the application, the entrepreneur must visit the Single window at SAMR to collect the Business License and to present the following documents:

Application form;
Articles of association;
Shareholders’ personal IDs;
Authorization Letter;
Copy of real estate certificate for the office (Signed by the property owner);
Supplementary information registration form.

Make a company seal

Agency : Seal Maker

To make the company seal, the company shall designate a company possessing a Shanghai Special Industry Permit (company seal carving) (《上海市特种行业许可证》公章刻制业). This process costs from CNY300 to up to CNY1,000 depending on the design and the

quality of the seal.

1 day CNY 400 on average

Obtain the tax filing control equipment and apply for an authorization to print or purchase financial invoices

Agency : Tax Authority

A tax filing control equipment is required in order to issue VAT invoices (both, general and special). This equipment is also referred to as an "encryption box". There are two developers/manufacturers that are authorized to manufacture the encryption box, and companies have the liberty to choose to use either one of them. Price of the equipment and annual maintenance charge (CNY 200 + CNY 280), it is established by Announcement No. 1243 of 2017 of National Development and Reform Commission (NDRC [2017] No. 1243). It is required to activate the tax filing control equipment at the Tax Service.

The company must obtain an approval to print or purchase financial invoices. The company must apply to the relevant authorities (that is, the state and local taxation offices) for approval to purchase and issue financial invoices/receipts. The application can be submitted online at https://www.tax.sh.gov.cn/xbwt/. The taxation authority will issue the invoice purchasing book, if it agrees to grant the company such qualification. The applicant must visit the Shanghai Municipal Office of the State Administration of Taxation to collect the approval and present the following documents:

Tax registration certificate (one copy);
Identity card of taxation personnel (one copy);
Application forms;
Models of invoice seal;
Company seal.

The Shanghai State Tax Bureau and the Shanghai Local Tax Bureau have co-issued a circular (""Tax Circular"") on February 25, 2013 providing that since January 2012, micro and small size companies no longer need to pay fees in respect of the purchase of invoices.

2 days CNY 200 for the encryption box and CNY 280 annual fee for maintenance of encryption box

4 Register employees with the Social Welfare Insurance Center

Agency : Social Welfare Insurance Center

Within 30 days of recruiting employees, the company must register them with the Shanghai Municipal Human Resources and Social Security Bureau, which is the local social insurance office under the Ministry of Human Resources and Social Security. The registration purpose is to establish the obligation of payment of the employee social insurance. The company must apply for employment registration for qualified personnel and for social insurance coverage registration.

Relevant application forms can be electronically downloaded or obtained from the local offices, and these documents shall be filled and submitted through the following website: https://zzjb.12333sh.gov.cn/zzjbdl/jsp/login.jsp. Companies can register online if they have already obtained a code from the Human Resources Management Department. After the application, supporting documents must be submitted at the relevant agency.

Upon receipt of an application for employee registration, the relevant authorities will issue a notice to open a social insurance account for the company. The company must then apply to open a special account at the designated bank or use the existing one. The local social insurance office will issue the social insurance registration card for the company upon receiving a bank notification of account opening, so that the company can start paying social security contributions to its employees.

day no charge

Takes place simultaneously with previous procedure.

Starting a Business – Beijing

Figure – Starting a Business in Beijing – Score

Figure – Starting a Business in Beijing and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

Figure – Starting a Business in Beijing – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Details – Starting a Business in Beijing – Procedure, Time and Cost

1 Register the company, apply for a Business License Certificate and obtain company seals

Agency : Beijing Administration for Market Regulation (BAMR)

In order to start and operate a new business, an entrepreneur must register the company and obtain a Business License (工商营业执照) from the Beijing Administration for Market

Regulation

(BAMR). The applicant must prepare and submit an application online at the website of the BAMR (scjgj.beijing.gov.cn/ect). The availability of the company name can be verified during the filing of the application form.

5 days

no charge

Previously, five other licenses were required, the Business License, the Organization Code

Certification, the Tax registration, the Statistics Registration and the Social Welfare Insurance Registration. These have been combined into one license. Upon receipt of an application, BAMR will circulate the application materials to the relevant bureaus mentioned above for registration. It is required to provide the following documents:

Application form;
Articles of association;
Shareholders’ personal IDs;
Authorization Letter;
Copy of real estate certificate for the office (Signed by the property owner);
Supplementary information registration form.

An electronic business license will be issued to the newly established enterprise, and automatically sent to the legal representative of the enterprise once upon the establishment. The enterprise can carry out business activities with the electronic business license. Enterprises can also obtain a paper business license if needed.

The applicant can also request company seals free of charge through the online platform offered by the Beijing Administration Administration of Industry and Commerce (http://ect.baic.gov.cn).

After applying for the seal online, the seal can be collected with the business license at the Single window at SAIC. A set of 4 seals is provided (company, contract, invoice, and financial seal).

Business founders also have the option of making a company seal directly at a seal-maker, for an average cost of CNY 200-500.

No.

Procedures

Time to Complete

Associated Costs

Obtain the tax filing control equipment and apply for an authorization to print or purchase financial invoices

Agency : Beijing Municipal Tax Service, State Administration of Taxation

A tax filing control equipment is required in order to issue VAT invoices (both, general and special). This equipment is also referred to as an "encryption box". There are two developers/manufacturers that are authorized to manufacture the encryption box, and companies have the liberty to choose to use either one of them. Price of the equipment and annual maintenance charge (CNY 200 + CNY 280), it is established by Announcement No. 1243 of 2017 of National Development and Reform Commission (NDRC [2017] No. 1243). It is required to activate the tax filing control equipment at the Tax Service.

3 Register employees with the Social Welfare Insurance Center

Agency : Social Welfare Insurance Center

Within 30 days of recruiting employees, the company must register them with the local social insurance office, under the Ministry of Human Resources and Social Security, for payment of the employee social insurance. The company must apply for employment registration for qualified personnel and for social insurance coverage registration. Employee registration can be completed online at the Beijing Social Insurance Online Service Platform (http://www.bjrbj.gov.cn/csibiz/home/index.html#) or at the online service platform for start-up companies offered by the BAMR. Supporting documents must be then submitted at the relevant agency.

1 day

no charge

Upon receipt of an application for employee registration, the relevant authorities will issue a notice

to open a social insurance account for the company. The company must then apply to open a special account at the designated bank or use the existing one. The local social insurance office will issue the social insurance registration card for the company upon receiving a bank notification of account opening, so that the company can start paying social security contributions to its employees.

An approval for financial invoices must be obtained. The entrepreneur can apply for the approval through the website of the Beijing Municipal Tax Service, under the State Administration of Taxation (http://www.bjsat.gov.cn). The invoice purchasing book can be collected at an office of the State Administration of Taxation.

1-2 days CNY 200 for the encryption box and CNY 280 annual fee for maintenance of encryption box

Takes place simultaneously with previous procedure.

Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information

What the indicators measure

Procedures to legally build a warehouse (number)

Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates
Submitting all required notifications and receiving all necessary inspections
Obtaining utility connections for water and sewerage
Registering and selling the warehouse after its completion

Time required to complete each procedure (calendar days)

Does not include time spent gathering information
Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes

Building quality control index (0-15)

Quality of building regulations (0-2)
Quality control before construction (0-1)
Quality control during construction (0-3)
Quality control after construction (0-3)
Liability and insurance regimes (0-2)
Professional certifications (0-4)

To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used.

The construction company (BuildCo):

Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.
Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.

The warehouse:

Will be used for general storage activities, such as storage of books or stationery.
Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita.
Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.
Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements).

The water and sewerage connections:

Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.
Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.
Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

Dealing with Construction Permits – Shanghai

Figure – Dealing with Construction Permits in Shanghai – Score

Figure – Dealing with Construction Permits in Shanghai and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators.

Figure – Dealing with Construction Permits in Shanghai – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Dealing with Construction Permits in Shanghai and comparator economies – Measure of Quality

Dealing with Construction Permits – Beijing

Figure – Dealing with Construction Permits in Beijing – Score

Figure – Dealing with Construction Permits in Beijing and comparator economies – Ranking and Score

Figure – Dealing with Construction Permits in Beijing – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Dealing with Construction Permits in Beijing and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in Beijing – Procedure, Time and Cost

1 Register Construction Project with the Beijing Development and Reform Commission

Agency : Beijing Development and Reform Commission

All construction projects must be registered with the Beijing Development and Reform Commission. The following documents must be submitted:

Application form to register the project
Proof of land use rights
Project proposal
Project construction investment estimate
Topographic map of the project
Comments from relevant functional department
Proof of funds presented by the bank
A copy of the business license of the enterprise legal representative

1 day no charge

2 Obtain geotechnical study / soil test

Agency : Private firms

BuildCo will request a soil test for the structural calculations for the foundation.

11 days CNY 32,500

3 Obtain review of building drawings by a building drawing examiner authorized by the Beijing Construction Project Document Review Center (Construction Committee) and obtain a letter of notice

Agency : Beijing Construction Project Document Review Center

As of 2012, the Beijing District Construction Commission accepts the building drawings and coordinates the review among the various agencies, including the Fire Protection Bureau, the Beijing Police and Traffic Police District Level Team and Beijing City Appearance & Environmental Sanitation Administration Bureau.

4 Request and obtain construction project planning permit

Agency : Ministry of Land Resources

Documents needed for construction on self-owned land include the following:

Application form
Construction project commitment letter
1/500 or 1/1000 site-plan and 1/500 or 1/1000 (1/2000 for suburbs) terrain map
Working drawing
Form of strata area
Groundwork construction ichnographic map, groundwork detail drawing and piling plan drawing
Ichnographic sketch map used for public purposes
Construction budget plan
Preliminary design documents that are approved
Reply on planning design proposal and attached drawings
Opinion on review and filing of design documents and acceptance letter for drawing review

20 days no charge

20 days no charge

5 Hire an authorized supervision agency

Agency : Authorized Supervision Agency

It is mandated by Ministry of Construction Decree No. 86 to hire an authorized supervision agency to inspect the construction in projects above RMB 30 million. For smaller projects it is common practice even if not legally mandated in order to comply with all relevant standards and regulations.

1 day CNY 80,530

6 Request and obtain building permit

Agency : Beijing Municipal Commission of Housing and Urban-Rural Development To request a building permit, BuildCo must file the following documents electronically:

-Application form for building construction permit
Planning permit for the construction project
Land use permit for construction purpose or title certificates of land or property
Construction contract with contractor and Bid winning notice for construction, if applicable
Power of attorney letter
Legal representative’s commitment letter, which contains the promises of the drawing review and the construction unit’s commitment to the suppression work to the government.

The commission will register on BuildCo’s behalf for quality and safety monitoring and issues a notice.

14 days no charge

7 Receive Scheduled Inspection by the Beijing Construction Engineering Safety Quality Supervision Station

Agency : Beijing Construction Engineering Safety Quality Supervision Station

The Safety and Quality Control Station conducts several inspections during construction.

1 day

no charge

8 Receive audit inspection from the Beijing Construction Engineering Safety Quality Supervision Station- I

Agency : Beijing Construction Engineering Safety Quality Supervision Station

The local Beijing Construction Engineering Safety Quality Supervision Station conducts several inspections during construction as mandated by the "Measures on Beijing Municipality Construction Projects’ Quality Management Supervision", effective from Jan 1, 1992.

1 day no charge

9 Receive audit inspection from the Beijing Construction Engineering Safety Quality Supervision Station -II

Agency : Beijing Construction Engineering Safety Quality Supervision Station -II

1 day

no charge

10 Obtain water connection inquiry and request water and sewage connection

Agency : Municipal Water Bureau

BuildCo must first apply for a water connection inquiry (接水前期征询手续)from the

11 Receive water and sewage inspection

Agency : Municipal Water Bureau

Upon receiving the water supply application, the water service crew conducts on-site surveys within 7 days. The completion of water supply is determined by construction conditions. As for sewage licensing, the Municipal Water Bureau needs 20 days after BuildCo submits the project approval and other documents on the sewage facility design to conduct a preliminary inspection. After completing the inspection and trial operation, the bureau requires 20 days to examine the results of the facility and grant approval. These timeframes are taken into account in the following procedure.

1 day

no charge

Municipal Water Bureau who will approve the application within 7 days after receiving all required documents. Afterwards, BuildCo may apply for the water connection.

7 days no charge

12 Receive inspection of the completed construction from the Beijing Bureau of Planning and Land and Resources

Agency : Beijing Bureau of Planning and Land and Resources

To request a final inspection, BuildCo must submit the following documents:

Report on completed construction (建设工程竣工测量成果报告书)
Planning permit for the construction project and attached drawings (plan, vertical view and

cutaway view)
Qualified acceptance certificate of files of construction project (建设项目档案验收合格证)
Qualified acceptance form of civil defense project

10 days no charge

13 Request and receive Fire Department inspection upon building completion

Agency : Fire Department

The application can be submitted directly to the Beijing District Construction Commission which now coordinates all inspections. But the inspections are still conducted by each individual agency.

9 days

no charge

However, this application can be submitted directly to the Beijing District Construction Commission which now coordinates all inspections. But the inspections are still conducted by each individual agency.

Receive "Four-Party" inspection

Site Inspector, Designer, Builder, and Agency Supervisor

This procedure is called a four-party inspection (四方验收). The four parties include the site

15 Request and receive inspection on construction completion from the Beijing Municipal Commission of Housing and Urban-Rural Development

Agency : Beijing Municipal Commission of Housing and Urban-Rural Development

This procedure must be completed on the day of application, provided that the documents required for submission are complete. There is no charge for this procedure.

1 day

no charge

inspector, the designer, the builder, and the supervisor.

1 day no charge

16 Request and obtain certificate of completion and certificate of final inspection from the Beijing Urban Construction and Communications Commission

Agency : Beijing Municipal Commission of Housing and Urban-Rural Development

Within 15 days after the building passes the inspection, BuildCo must file the following documents with the Beijing Urban Construction and Communications Commission:

Inspection report of the completed construction
Acknowledgement or authority from the planning bureau
Acknowledgement from the city construction dossier department

5 days no charge

Getting Electricity

This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to obtain an electricity connection (number)

Submitting all relevant documents and obtaining all necessary clearances and permits
Completing all required notifications and receiving all necessary inspections
Obtaining external installation works and possibly purchasing material for these works
Concluding any necessary supply contract and obtaining final supply

Time required to complete each procedure (calendar days)

Is at least 1 calendar day
Each procedure starts on a separate day
Does not include time spent gathering information
Reflects the time spent in practice, with little follow-up and no prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes
Value added tax excluded

The reliability of supply and transparency of tariffs index (0-8)

Duration and frequency of power outages (0–3)
Tools to monitor power outages (0–1)
Tools to restore power supply (0–1)
Regulatory monitoring of utilities’ performance (0–1)
Financial deterrents limiting outages (0–1)
Transparency and accessibility of tariffs (0–1)

To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used.

The warehouse:

Is owned by a local entrepreneur and is used for storage of goods.
Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway.
Is a new construction and is being connected to electricity for the first time.
Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters (10,000 square feet).

The electricity connection:

Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).
Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.
Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service panel or switchboard and the meter base.

The monthly consumption:

It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.
If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.
Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.

Price of electricity (cents per kilowatt-hour)*

Price based on monthly bill for commercial warehouse in case study

*Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity.

Getting Electricity – Shanghai

Figure – Getting Electricity in Shanghai – Score

Figure – Getting Electricity in Shanghai and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity.

Figure – Getting Electricity in Shanghai – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Getting Electricity in Shanghai and comparator economies – Measure of Quality

Details – Getting Electricity in Shanghai – Procedure, Time and Cost

1 Submit application to utility and sign supply contract

Agency : Shanghai Municipal Electric Power Company

Customers may apply for a new connection in person, online or through a phone app.

Documents to be submitted along with application include: copy of business license, applicant's

ID, tax registration certificate and the certificate of house property right (identical to the electrical address). After examining the application, the utility's staff will investigate the site the next day without involving the customer (i.e. inspection occurs outside the premises of the customer's property) to (i) assess the feasibility of the connection and (ii) determine the specific needs of the connection. Shortly thereafter, the application is accepted and the customer is receives the supply contract, which can be signed electronically. The utility will then commence the external connection works.

2 Receive external connection works and meter installation

Agency : Shanghai Municipal Electric Power Company

Once the application is accepted, the Shanghai Municipal Electric Power Company will carry out through a sub-contractor the external connection works as well as the meter installation. During this process, the utility will take care of all the required permitting with the relevant authorities, including the excavation permit.

For a power load at 160kW or below, the connection is done through the low voltage network – which does not require a transformer. For commercial connections to the low voltage network, the utility funds and constructs the connection through a sub-contractor – which includes the material, the meter box and labor. The sub-contractor will be chosen by the utility through a bidding process where they then give the sub-contractor (i.e. winning-bidder) a time objective to respect. The client will not interact with the sub-contracting entity.

The utility will carry out the meter installation in parallel with works, and the connection is finalized once works have been completed.

28 calendar days CNY 0

Takes place simultaneously with previous procedure.

Details – Getting Electricity in Shanghai – Measure of Quality

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Getting Electricity – Beijing

Figure – Getting Electricity in Beijing – Score

Figure – Getting Electricity in Beijing and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

Figure – Getting Electricity in Beijing – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

reflected here, see the summary below.

Figure – Getting Electricity in Beijing and comparator economies – Measure of Quality

Details – Getting Electricity in Beijing – Procedure, Time and Cost

1 Submit application to utility and sign supply contract

Agency : State Grid Beijing Electric Power Company

Customers may apply for a new connection in person, online or through a phone app.

4 calendar days

CNY 0

Documents to be submitted along with application include: copy of business license, applicant's

2 Receive external connection works and meter installation

Agency : State Grid Beijing Electric Power Company

Once the application is accepted, the State Grid Beijing Electric Power Company will carry out through a sub-contractor the external connection works as well as the meter installation. During this process, the utility will take care of all the required permitting with the relevant authorities, including the excavation permit.

For a power load at 160kW or below, the connection is done through the low voltage network – which does not require a transformer. For commercial connections to the low voltage network, the State Grid Beijing Electric Power Company funds and constructs the connection through a sub- contractor – which includes the material, the meter box and labor. The sub-contractor will be chosen by the utility through a bidding process where they then give the sub-contractor (i.e. winning-bidder) a time objective to respect. The client will not interact with the sub-contracting entity.

The utility will carry out the meter installation in parallel with works, and the connection is finalized once works have been completed.

28 calendar days CNY 0

Takes place simultaneously with previous procedure.

Details – Getting Electricity in Beijing – Measure of Quality

Note:

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Registering Property

This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally transfer title on immovable property (number)

Preregistration procedures (for example, checking for liens, notarizing sales agreement, paying property transfer taxes)
Registration procedures in the economy's largest business city.
Postregistration procedures (for example, filling title with municipality)

Time required to complete each procedure (calendar days)
Does not include time spent gathering information
Each procedure starts on a separate day – though procedures that can be fully completed online are an exception to this rule
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of property value)
Official costs only (such as administrative fees, duties and taxes).
Value Added Tax, Capital Gains Tax and illicit payments are excluded

Quality of land administration index (0-30)
Reliability of infrastructure index (0-8)
Transparency of information index (0–6)
Geographic coverage index (0–8)
Land dispute resolution index (0–8)
Equal access to property rights index (-2–0)

To make the data comparable across economies, several assumptions about the parties to the transaction, the property and the procedures are used.

The parties (buyer and seller):

Are limited liability companies (or the legal equivalent).
Are located in the periurban (that is, on the outskirts of the city but still within its official limits) area of the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Are 100% domestically and privately owned.
Perform general commercial activities.

The property (fully owned by the seller):
Has a value of 50 times income per capita, which equals the sale price.
Is fully owned by the seller.
Has no mortgages attached and has been under the same ownership for the past 10 years.
Is registered in the land registry or cadastre, or both, and is free of title disputes.
Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required.
Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its entirety.
Will not be subject to renovations or additional construction following the purchase.
Has no trees, natural water sources, natural reserves or historical monuments of any kind.
Will not be used for special purposes, and no special permits, such as for residential use, industrial plants, waste storage or certain types of agricultural activities, are required.
Has no occupants, and no other party holds a legal interest in it.

Registering Property – Shanghai

Figure – Registering Property in Shanghai – Score

Figure – Registering Property in Shanghai and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators.

Figure – Registering Property in Shanghai – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Registering Property in Shanghai and comparator economies – Measure of Quality

Details – Registering Property in Shanghai – Measure of Quality

Registering Property – Beijing

Figure – Registering Property in Beijing – Score

Figure – Registering Property in Beijing and comparator economies – Ranking and Score

DB 2020 Registering Property Score

Figure – Registering Property in Beijing – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Registering Property in Beijing and comparator economies – Measure of Quality

Details – Registering Property in Beijing – Measure of Quality

Getting Credit

This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Strength of legal rights index (0–12)

Rights of borrowers and lenders through collateral laws (0-10)
Protection of secured creditors’ rights through bankruptcy laws (0-2)

Depth of credit information index (0–8)

Scope and accessibility of credit information distributed by credit bureaus and credit registries (0-8)

Credit bureau coverage (% of adults)

Number of individuals and firms listed in largest credit bureau as a percentage of adult population

Credit registry coverage (% of adults)

Number of individuals and firms listed in credit registry as a percentage of adult population

Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit information index measures rules and practices affecting the coverage, scope and accessibility of credit information available through a credit registry or a credit bureau. The strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary secured transactions system exists. Then two case scenarios, case A and case B, are used to determine how a nonpossessory security interest is created, publicized and enforced according to the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a secured lender, BizBank.

In some economies the legal framework for secured transactions will allow only case A or case B (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral.

Several assumptions about the secured borrower (ABC) and lender (BizBank) are used:

ABC is a domestic limited liability company (or its legal equivalent).
ABC has up to 50 employees.
ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Both ABC and BizBank are 100% domestically owned.

The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests).

In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets.

Getting Credit – Shanghai

Figure – Getting Credit in Shanghai – Score

Figure – Getting Credit in Shanghai and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index.

Figure – Legal Rights in Shanghai and comparator economies

Details – Legal Rights in Shanghai

Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description

of collateral?

Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents No to security interests in movable assets exist in the economy?

May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the

original assets?

Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of collateral?

Yes

Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an

electronic database indexed by debtor's name?

Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered?

Yes

Does a notice-based collateral registry exist in which all functional equivalents can be registered? No

Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third No party?

Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes

Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? Yes

Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell No the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt?

Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law No protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it?

Figure – Credit Information in Shanghai and comparator economies

Details – Credit Information in Shanghai

Getting Credit – Beijing

Figure – Getting Credit in Beijing – Score

Figure – Getting Credit in Beijing and comparator economies – Ranking and Score

Figure – Legal Rights in Beijing and comparator economies

Details – Legal Rights in Beijing

Figure – Credit Information in Beijing and comparator economies

Details – Credit Information in Beijing

Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0.

Protecting Minority Investors

This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Extent of disclosure index (0–10): Disclosure, review, and approval requirements for related-party transactions
Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions; Available legal remedies (damages, disgorgement of profits, disqualification

from managerial position(s) for one year or more, rescission of the transaction)
Ease of shareholder suits index (0–10): Access to internal corporate documents; Evidence obtainable during trial and allocation of legal expenses
Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of shareholder suits indices
Extent of shareholder rights index (0-6): Shareholders’ rights and role in major corporate decisions
Extent of ownership and control index (0-7): Governance safeguards protecting shareholders from undue board control and entrenchment
Extent of corporate transparency index (0-7): Corporate transparency on ownership stakes, compensation, audits and financial prospects
Extent of shareholder governance index (0–20): Sum of the extent of shareholders rights, extent of ownership and control and extent of corporate transparency indices
Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices

To make the data comparable across economies, a case study uses several assumptions about the business and the transaction.

The business (Buyer):

Is a publicly traded corporation listed on the economy’s most important stock exchange.
Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speciﬁcally required by law.
Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members.
Has not adopted bylaws or articles of association that go beyond the minimum requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory.
Is a manufacturing company with its own distribution network.

The transaction involves the following details:
Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to Buyer’s ﬁve-member board.
Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores.
Mr. James proposes that Buyer purchase Seller’s unused ﬂeet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of Buyer’s assets and is higher than the market value.
The proposed transaction is part of the company’s principal activity and is not outside the authority of the company.
Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently.
The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and directors that approved the transaction.

Protecting Minority Investors – Shanghai

Figure – Protecting Minority Investors in Shanghai and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conﬂict of interest regulation index and the extent of shareholder governance index.

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Employing Workers

Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.

The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Hiring

(i) whether fixed-term contracts are prohibited for permanent tasks; (ii) maximum cumulative duration of fixed-term contracts;

(iii) length of the maximum probationary period; (iv) minimum wage;(v) ratio of minimum wage to the average value added per worker.

Working hours

(i) maximum number of working days allowed per week; (ii) premiums for work: at night, on a weekly rest day and overtime;

(iii) whether there are restrictions on work at night, work on a weekly rest day and for overtime work; (iv) length of paid annual leave.

Redundancy rules

(i) whether redundancy can be basis for terminating workers; (ii) whether employer needs to notify and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment.

To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:

Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.
Is a full-time employee.
Is not a member of the labor union, unless membership is mandatory.

The business:
Is a limited liability company (or the equivalent in the economy).
Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Has 60 employees.
Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.
Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.

Redundancy cost

(i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected.

Employing Workers – Shanghai

Details – Employing Workers in Shanghai

Answer

Hiring

Fixed-term contracts prohibited for permanent tasks? No

Maximum length of a single fixed-term contract (months) No limit

Maximum length of fixed-term contracts, including renewals (months) No limit

Minimum wage applicable to the worker assumed in the case study (US$/month) 364.5

Maximum length of probationary period (months) 6.0

Ratio of minimum wage to value added per worker 0.3

Working hours

Standard workday 8.0

Maximum number of working days per week 6.0

Premium for night work (% of hourly pay) 34.0

Premium for work on weekly rest day (% of hourly pay) 100.0

Premium for overtime work (% of hourly pay) 50.0

Restrictions on night work? No

Restrictions on weekly holiday? No

Restrictions on overtime work? No

Paid annual leave for a worker with 1 year of tenure (working days) 5.0

Paid annual leave for a worker with 5 years of tenure (working days) 5.0

Paid annual leave for a worker with 10 years of tenure (working days) 10.0

Redundancy rules

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 6.7

Third-party notification if one worker is dismissed? Yes

Dismissal due to redundancy allowed by law? Yes

Third-party notification if nine workers are dismissed? Yes

Third-party approval if one worker is dismissed? No

Retraining or reassignment obligation before redundancy? Yes

Third-party approval if nine workers are dismissed? No

Priority rules for reemployment? Yes

Priority rules for redundancies? Yes

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.3

Redundancy cost

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 4.3

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 4.3

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.3

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 4.3

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 21.7

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 43.3

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 23.1

Employing Workers – Beijing

Details – Employing Workers in Beijing

Answer

Hiring

Fixed-term contracts prohibited for permanent tasks? No

Maximum length of a single fixed-term contract (months) No limit

Maximum length of fixed-term contracts, including renewals (months) No limit

Minimum wage applicable to the worker assumed in the case study (US$/month) 311.6

Maximum length of probationary period (months) 6.0

Ratio of minimum wage to value added per worker 0.3

Working hours

Standard workday 8.0

Maximum number of working days per week 6.0

Premium for night work (% of hourly pay) 0.0

Premium for work on weekly rest day (% of hourly pay) 100.0

Premium for overtime work (% of hourly pay) 50.0

Restrictions on night work? No

Restrictions on weekly holiday? No

Restrictions on overtime work? No

Paid annual leave for a worker with 1 year of tenure (working days) 5.0

Paid annual leave for a worker with 5 years of tenure (working days) 5.0

Paid annual leave for a worker with 10 years of tenure (working days) 10.0

Redundancy rules

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 6.7

Third-party notification if one worker is dismissed? Yes

Dismissal due to redundancy allowed by law? Yes

Third-party notification if nine workers are dismissed? Yes

Third-party approval if one worker is dismissed? No

Retraining or reassignment obligation before redundancy? Yes

Third-party approval if nine workers are dismissed? No

Priority rules for reemployment? Yes

Priority rules for redundancies? Yes

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.3

Redundancy cost

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 4.3

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 4.3

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.3

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 4.3

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 21.7

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 43.3

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 23.1

PEO China

China holds significant appeal as a PEO (Professional Employer Organization) country, owing to its vast market size, rapid economic growth, and diverse range of industries. As one of the world’s leading manufacturing and trading hubs, China offers exceptional opportunities for international businesses seeking to establish a presence in the Asia-Pacific region. By leveraging PEO services in China, companies can access a skilled and cost-effective workforce, navigate the complexities of local labor laws and regulations, and streamline HR and payroll processes. Moreover, China’s government has been actively encouraging foreign investment, and its modern infrastructure and technological advancements make it an attractive destination for companies seeking to expand globally. While navigating the unique business and cultural landscape in China may present some challenges, utilizing PEO services can significantly simplify the entry and expansion process, allowing businesses to focus on growth and market penetration in this dynamic and promising market.

PEO (Professional Employer Organization) services in China offer a valuable solution for businesses looking to expand their operations into the Chinese market without the complexities of setting up a legal entity. A PEO acts as an employer of record for foreign companies, handling human resources, payroll, tax compliance, and other administrative tasks on their behalf. By partnering with a reputable PEO service provider in China, international businesses can navigate the intricate Chinese labor laws and regulations, ensuring compliance and reducing potential risks. This enables companies to focus on their core business functions while accessing a skilled local workforce, fostering a smoother and more efficient entry into the competitive Chinese market. PEO services in China serve as a strategic tool for foreign companies seeking to establish a strong presence and capitalize on the vast opportunities this dynamic market has to offer.

Business Reforms in China

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by

Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008.

=Doing Business reform making it easier to do business. = Change making it more difficult to do business.

DB2020

Starting a Business: China (Beijing) made starting a business easier by fully integrating the obtention of company seals into the one-stop shop.

Dealing with Construction Permits: China made obtaining building permits easier by simplifying the requirements for low-risk construction projects and by reducing the time to get water and drainage connections. China also made construction safer by imposing stricter qualification requirements for professionals in charge of technical inspections and verifying architectural plans as well as differentiated building quality supervision schemes. This reform applies to both Beijing and Shanghai.

Getting Electricity: China made getting electricity easier by streamlining the application process. China also increased the transparency of electricity tariff changes. This reform applies to both Beijing and Shanghai.

Protecting Minority Investors: China strengthened minority investors protections by by imposing liability on controlling shareholders for unfair related-party transactions and clarifying ownership and control structures. This reform applies to both Beijing and Shanghai.

Paying Taxes: China made paying taxes easier by implementing a preferential corporate income tax rate for small enterprises, reducing the value added tax rate for certain industries and enhancing the electronic filing and payment system. This reform applies to Beijing and Shanghai.

Trading across Borders: China made exporting and importing easier by implementing advance cargo declaration, upgrading port infrastructure, optimizing customs administration and publishing fee schedules. This reform applies to both Beijing and Shanghai.

Enforcing Contracts: China made enforcing contracts easier by regulating the maximum number of adjournments that can be granted and limiting adjournments to unforeseen and exceptional circumstances. This reform applies to both Beijing and Shanghai. China (Shanghai) made enforcing contracts easier by publishing court performance measurement and progress reports.

Resolving Insolvency: China made resolving insolvency easier by providing rules for post-commencement credit priority and increasing the participation of creditors in insolvency proceedings. This reform applies to both Beijing and Shanghai.

DB2019

Starting a Business: China made starting a business easier by launching online company registrations and by simplifying social security registrations. This reform applies to both Beijing and Shanghai.

Dealing with Construction Permits: China streamlined the process of obtaining the building permit, the certificate of completion and registering new buildings with the real estate registry. It also improved its building quality control by introducing stricter qualification requirements for professionals in the construction industry and improving public access to information. This reform applies to both Beijing and Shanghai.

Getting Electricity: China made getting electricity easier in Beijing and Shanghai by expanding network capacity so that all connections of power loads of 160kW or less are now made directly to the low voltage network, for which the connection process is carried out entirely by the utility free of charge. The time to obtain an electricity connection was also reduced thanks to the rollout of a new mobile application for customers.

Registering Property: China made registering property easier by streamlining administrative procedures and by increasing the reliability and transparency of its land administration system. This reform applies to both Beijing and Shanghai.

Protecting Minority Investors: China strengthened minority investor protections by increasing shareholders' rights and role in major corporate decisions, clarifying ownership and control structures, and requiring reimbursement of legal expenses incurred by shareholders.

Paying Taxes: China made paying taxes easier by abolishing the business tax, allowing for joint filing and payment of all stamp duties and by implementing several administrative reforms to lower the compliance time. These reforms apply to both Beijing and Shanghai. Beijing also made paying taxes less costly by reducing the housing fund rate paid by the employer.

Trading across Borders: China reduced the time and cost to export and import by implementing a single window, eliminating administrative charges, increasing transparency and encouraging competition. These reforms apply to both Beijing and Shanghai.

DB2018

Starting a Business: China made starting a business easier by streamlining registration procedures. This reform applies to both Beijing and Shanghai.

Paying Taxes: China made paying taxes easier by introducing several measures for easing compliance.

DB2017

Starting a Business: China made starting a business easier by introducing a single form to obtain a business license, organization code and tax registration. This reform applies to both Shanghai and Beijing.

Getting Credit: China improved access to credit information by starting to report payment histories from utility companies and providing credit scores to banks and financial institutions. This reform applies to both Shanghai and Beijing.

Enforcing Contracts: China made enforcing contracts easier by introducing an online platform that allows lawyers to manage cases electronically. This reform applies to Beijing.

DB2016

Paying Taxes: China made paying taxes less costly for companies in Shanghai by reducing the social security contribution rate.

DB2015

Starting a Business: China made starting a business easier by eliminating both the minimum capital requirement and the requirement to obtain a capital verification report from an auditing firm. This reform applies to both Beijing and Shanghai.

Paying Taxes: China made paying taxes easier for companies by enhancing the electronic system for filing and paying taxes and adopting new communication channels within its taxpayer service, changes applying to both Beijing and Shanghai. In addition, China made paying taxes less costly for companies in Shanghai by reducing the social security contribution rate.

DB2014

Getting Credit: China improved its credit information system by introducing credit information industry regulations, which guarantee borrowers’ right to inspect their data.

Enforcing Contracts: China made enforcing contracts easier by amending its civil procedure code to streamline and speed up all court proceedings.

DB2013

Starting a Business: China made starting a business less costly by exempting micro and small companies from paying several administrative fees from January 2012 to December 2014.

Dealing with Construction Permits: China simplified the process of obtaining a construction permit by streamlining and centralizing preconstruction approvals.

DB2011

Paying Taxes: China’s new corporate income tax law unified the tax regimes for domestic and foreign enterprises and clarified the calculation of taxable income for corporate income tax purposes.

DB2010

Trading across Borders: China made trading across borders easier by relaxing trade credit restrictions.

DB2009

Getting Credit: China strengthened its secured transactions system through a new property law expanding the range of assets that can be used as collateral, now including accounts receivable and a changing pool of assets.

Paying Taxes:

China made paying taxes easier and less costly for companies by unifying the criteria and accounting methods for tax deductions and by reducing the corporate income tax rate.

Enforcing Contracts:

China strengthened its contract enforcement system by tightening the rules on enforcement of judgments so as to limit the ways in which debtors can hide assets and escape enforcement.

Employing Workers:

China established paid annual leave and introduced priority rules for redundancy dismissals or layoffs.

DB2008

Dealing with Construction Permits:

China reduced delays in dealing with construction permits by introducing electronic processing of applications for building permits and allowing construction companies to apply for safety certificates online.

Getting Credit:

China strengthened its secured transactions system through a new law entitling secured creditors to priority in payment.

Resolving Insolvency:

hina enhanced its insolvency process through a new enterprise bankruptcy law introducing reorganization procedures, allowing for the formation of creditors’ committees, granting rights to secured creditors and establishing a role for professional bankruptcy administrators.

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