Category: Business

China Visa Series: Getting The Chinese Green Card (D Visa)

China Visa Series: Getting The Chinese Green Card (D Visa)

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Whether you want to visit China long-term as a business owner or just on holiday, a necessary hoop you’ll have to jump through is getting a visa. And there’s no denying it’s a complex system. This will be a three part series that will guide you through the process of getting the three most desired visas: the permanent residence visa (D), the tourist visa (L), and the business visa (M).

The first visa we’ll be looking at is the D visa, frequently called The Chinese Green Card.

As a US citizen, you might be used to low-to-no cost entry into foreign countries. China visa fees stand at $140, with the maximum it asks for other other countries hitting a maximum of only $90 if they ask for multiple entries for ten years. There are only a handful of countries that charge US citizens at that rate or higher, though Saudi Arabia takes the cake with a visa fee amounting to half a grand at $533.

From the get go, you should know that $140 fee applies to your visa no matter how long you’d like to say, or whether or not you’re applying for multiple entries. For this reason, immigration attorneys and visa agencies will often advise you to go for broke and apply for the visa that offers multiple entries over ten years. If you tell them you’re not interested chances are they’ll look at you like you have five heads.

Ordinary Visas

A bit of background

There are four types of visas, the diplomatic, the service, the courtesy, and finally the ordinary. The vast majority of people seeking to enter China will fall into the ordinary category.

Ordinary visas are true to their name in that they apply to people who have ordinary reasons for trying to enter China. These categories of reasons are divided into twelve types: C, D, F, G, J1, J2, L, M, Q1, Q2, R, S1, S2, X1, X2, Z.

These visas range from foreign crew members on international transportation to foreign national students studying in China for a semester.

The Chinese Green Card

One of the most difficult ordinary visas to obtain is the D visa. In 2012, it was estimated approximately 5,000 D visas were granted to foreign nationals… since the program started in 2004. It’s possible that we’ll see the PRC issue more D visas in the future as the PRC seeks to entice top-level foreign talent.

But if you can get it, the D visa is one of the most desirable in that it’s essentially the Chinese version of the US green card. It grants its owner permanent residence in China and freedom to work, leave, and return to country at will… without ever having to apply for an extension or make a visa run. But it does not make the visa holder a Chinese citizen.

First and foremost, you must be 18 to qualify for this visa and not have a criminal record that the Chinese government will recognize. If you have that down, the next thing to consider is which of the six paths to permanent residence applies to you.

The types of qualification for D visa falls generally into two categories, only one of which will be considered here: either family related or business related.

For business related D visas, there are two roads. You must either be an investor or an employee. But beyond that, there are strict requirements attached to each.

D Visa: Investment

If you’re seeking to gain permanent residence in China based on your investments you must have made:

  • direct investments in China for three consecutive years and have a record of taxation as well as,
  • made an investment of over $500,000 USD in industries that are noted in the Catalogue of Industries of Foreign Investment produced by the PRC government
  • have made a total investment of over $500,000 in China’s western counties, or in counties which are currently the focus of poverty relief action by the PRC government,
  • have a total investment of over $1 million USD in the central part of the country, or
  • have invested over $2 million USD in the PRC government.

If you meet any of the above, you can then consider whether you have or can do the last four requirements.

  1. You’ll need to complete the D Visa form.
  2. A valid foreign passport.
  3. Two valid passport photos.
  4. Received a certificate of health after undergoing the Exit-Entry Inspection, conducted by the Quarantine Bureau or issued by a foreign medical agency that is accredited by teh Chinese embassy. Worth noting is that once you receive your certification it is only valid for six months.
  5. Finally, you must have certificates of registration, approval of foreign funded enterprises, proof of combined annual inspection, proof of personal tax payment, or any other document that would be relevant and material in proving the validity and worth of your investment in China.

Assuming you’ve managed to overcome every hurdle, the next step is to actually submit your documentation and fees, then kick back your feet and wait for it to process.

You’ll submit your application, with a copy of your passport page, your two passport photos, your health certification, evidence of no criminal record, all relevant documents surrounding your investment, and fees (1,500 RMB Application Fee for each person, 300 RMB for each Foreigner’s Permanent Residence Permit) to the Public Security Administration of a province of your choice, so long as it’s controlled by the PRC.

You can submit it yourself in person or you can have a third party go in your stead, but the third party must have power of attorney to submit the documentation, which should be attested to by a Chinese embassy or consular office.

Once your material is submitted, the Public Security Authority will provide a decision within six months.

D Visa: Employment

The requirements for those seeking a D visa through the professional or employment channel also face their own strict set of requirements:

  • the applicant must have worked as a deputy general manager, deputy factory director or above, or of associate professor, associate research fellow and other associate senior titles of professional post or above or enjoying an equal treatment;
  • she must have worked at least four successive years, with a minimum period of residence in China for three cumulative years within that four-year time frame;
  • she must be in good standing in terms of taxation;
  • the units where she worked must meet any of the following terms and conditions:
    • institutions subordinate to the various ministries under the State Council or to the provincial level people’s governments;
    • major higher learning schools;
    • enterprises or institutions executing major engineering projects or major scientific projects of the State;
    • high-tech enterprises,
    • foreign invested enterprises in encouraged type,
    • foreign invested advanced technology enterprises or foreign invested export-oriented enterprises.

If you fit these narrow qualifications, then you may be eligible for a D Visa. Similar to the Investment path, you must then meet then submit all of the necessary paperwork.

You’ll submit your application, with a copy of your passport page, your two passport photos, your health certification, evidence of no criminal record, all relevant documents surrounding your employment, and fees (1,500 RMB Application Fee for each person, 300 RMB for each Foreigner’s Permanent Residence Permit) to the Public Security Administration of a province of your choice, so long as it’s controlled by the PRC.

But beyond that you must also provide one of the following:

  • units are foreign funded enterprises, the certificate of approval of foreign funded enterprises and proof of combined annual inspection should also be provided;
  • persons of enterprises or institutions executing major engineering projects or scientific projects of the State should provide testifying documents for the projects issued by the competent authorities of the provincial level people’s governments or ministries;
  • persons working for high-tech enterprises should provide certificates of high-tech enterprises;
  • persons working for encouraged type foreign funded enterprises should provide letter of confirmation of the encouraged type foreign invested projects;
  • persons working for foreign invested advanced technology enterprises should provide letter of confirmation of foreign invested advanced technology enterprises;
  • persons working for foreign invested export-oriented enterprises should provide letter of confirmation of foreign invested export-oriented enterprises.

Whether you’re applying for a D visa under investment or employment, both offer very high bars for Chinese-resident hopefuls. But we may see China relax these strict requirements in the coming years.

A Business Owner’s Introduction to Registering Trademarks in China

A Business Owner’s Introduction to Registering Trademarks in China

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You spent countless hour thinking up the identifying marks of your business: its name, its logo, and its slogan. But when you bring your business to China you run the very real risk of losing all three since IP laws in your country may not be recognized in China.

In some cases, it’s just a matter of someone liking your idea and wanting to use it as their own. They may want to create a copycat business. It’s also not unheard of for trademark hijackers to take your ideas, only to try and sell them back to you.

For these reasons, there can be no understating the importance of registering your trademarks. By doing so you protect yourself in two ways: you prevent others from stealing your trademarks and you prevent others from stating you are infringing on their trademark rights, as was done in the infamous Apple case. Being caught in a trademark infringement case can be a costly affair, so it always pays to register your trademark in advance.

Where to go to register

In order to register your trademark in China you must register it with the Chinese Trademark Office. E-filing is available for Chinese businesses but is not yet accessible for foreign owned businesses.

Once you submit your application to the CTMO will allow other parties to oppose your registration for three months. If there is no objection, the CTMO will then move forward with the registration process and you can expect to have your registration certificate for months after that initial three-month wait.

At its most expedient, an unopposed registration can take nine months to complete, or up to a year and a half. The cost of this process is typically $500 to $1000. But if your registration is opposed then those costs may double.

There are also issues with applications which are deficient, or if there are similar trademarks already registered. For this reason, having counsel from the beginning can be both cost and time efficient. If your application is incomplete or flawed, a company may then file for a review with the Trademark Review and Adjudication Board.

What can be registered as trademarks?

In China, any visual symbol or sign that is used to distinguish a good or service of one person, entity, or some other organization from others may be trademarked. This includes designs, letters of an alphabet, numbers, 3-D symbols, words, even combination of colors, can all be registered as trademarks.

However, some trademarks are simply off limits, but reasonably so. For example, you can’t trademark a country name, the names of international organizations like the World Health Organization, can’t be registered as trademarks.

The Trademark Office also has a database of all registered trademark. You can save yourself time by checking this database for slogans, logos, or business names that may be similar to yours that have already been trademarked.

What class is your trademark?

In order to register your trademark, you will need to classify it.

China, like many countries, follows the World Intellectual Property Organization’s Nice classification which provides for 45 different classes of goods and service. But, beyond that, China also offers sub-classes to those 45 different categories. It is possible to have a similar or even identical trademarks, so long as they are in different classes or sub-classes.

In order to avoid trademark hijacking or consumer confusion, it can be wise to register your trademark in all classes that you believe are relevant and will cover every product you sell or intend to sell for up the next three years. If you fail to use the trademark in a chosen class for a three-year period, your protection of that trademark in that class will lapse.

Who receives the trademark?

Say you and a rival try to register identical, or even just similar, trademarks for the same type of product. Who will receive the trademark? The decision is guided by the “first to file” concept, which states that the Chinese Trademark Office will grant the trademark to the person who submitted the first application.

As you can imagine, while this policy makes things simple and expedient, it also makes it easy for trademark hijackers to get rights to your trademark if you don’t move quickly enough.

How long is your trademark valid for?

The day your trademark is approved and registered the clock starts. A trademark in China has a validity period of ten years.

Once your ten years are up you should apply for a renewal of the registration. The Chinese Trademark Office grants you six months to submit this application. This six-month period counts as a grace period. But if no application for renewal is made in that time period your registered trademark is cancelled.

Authorizing others to use your trademark

If you’d like to authorize another person or entity to use your trademark, you will need to create a license contract which will bind you and the person or entity you will grant use of your trademarks to. This relationship will be overseen by a licensor who will ensure the quality of the goods for both parties.

This license, like all applications, will be submitted to the Chinese Trademark Office.

Someone’s infringed on your trademark! Now what?

Trademark infringement occurs in many circumstances: if a symbol or slogan that is identical to your trademark is used, if someone sells counterfeit goods with your trademark, and if your trademark is replaced without your consent and then goods are marketed bearing a different trademark.

So what happens once your trademark has been infringed upon? At this point, it’s a good idea to seek an attorney who can guide you through the process. There are two roads which are generally taken: negotiations and litigation. In a negotiation your attorney will attempt to gain you a handsome settlement, sparing both you and the trademark infringer the costs of litigation. Sometimes, however, this may not work and the matter will go to the court. In court, the matter may take years to resolve. But as a foreign citizen you may still expect to receive a fair trial, though favoritism isn’t unheard of in smaller cities.

Another option is to go to the Administration of Industry and Commerce (AIC). This government agency exercises authority on a national, provincial, county, and municipal level and is the foremost agency when it comes to assisting in resolving trademark infringements and disputes, corporate registration, market supervision, and similar. It is also known as being very responsive to issues involving trademark infringement.

When an infringement dispute is brought before the AIC and the AIC determines that the accused is indeed infringing upon your trademark, the AIC then demands that the infringing act immediately stops, that all infringing goods be confiscated and destroyed, as well as any tools used for the creation of those goods. A fine is then imposed.

Should you find yourself unhappy with the conclusion reached by the AIC you may still bring your issue before the People’s Court.

The Foreign Citizen’s Guide to Starting a Business in the US

The Foreign Citizen’s Guide to Starting a Business in the US

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The United States doesn’t bar foreign citizens from establishing businesses in the US. In fact, at first glance, it may seem easy for a foreign citizen to do so – in general they need merely follow the same procedure as a US citizen.

However, there are a myriad of factors that can stymie a foreign business owner. There are issues of immigration visas, international tax issues, and the decision of where would be the best place to establish your enterprise. Once you have a handle on these three, you can begin the process of establishing your business in the United States.

Immigration Visa

When people hear the word “immigration” they frequently think of permanent residence or new citizenship. This is not the case. Immigration also refers to short to long term “passes” for foreign citizens, which may come with single to multiple entries.

Many foreign investors wish to retain the citizenship of their own country but still be permitted to regularly visit or stay for long periods of time in the United States while overseeing their business.

However, the United States has a complicated immigration process. In fact, many attorneys in the United States who practice immigration law only practice immigration because of how deeply specialized and nuanced it can be. Because of this, it is wise to seek consultation from a US immigration attorney to who can establish what visa will work best for you and guide you through the process.

As a foreign business owner you will likely apply for a B-1 visa (short term business visa).

Taxation

Even though you may not be a citizen of the US if you’re involved in a business you’ll still be taxed like one.

The Internal Revenue Service is the US government entity that oversees taxation. The IRS has stated that a nonresident alien who is engaged in a trade or business in the US during the year must file a tax return. Beyond this, you may still owe taxes under international tax regulations or to your country of citizenship.

Location

In the United States, location matters. The US is governed by two sets of law, federal and state. And State law significantly influences business incorporation and management. Beyond this, the statistics of a city should be carefully analyzed for potential growth and opportunities as well as obstacles. It can be difficult for new business owners to find the ideal location for their business or branch because of just how varied states are from one another, and the problem becomes even more complex when cities are taken into consideration.

Below are three examples of cities in three different states, all of which are great candidates to start a new business or branch, but vary in desirability based on industry.

Seattle, Washington, for example, has become a hub for tech-based businesses (including Microsoft) and it has no shortage of educated, skilled, and innovative potential-employees. However, Seattle is approximately 25% more expensive than the average US city and minimum employee salaries are $13 per hour, with a rise to $15 expected in 2021.

For those seeking to create a business that is rooted in education, arts, tourism, or financial services then Sarasota, Florida may be the ideal city. The cultural industry drew revenue of $2.6 billion USD in 2015 and the cost of living is a little lower than average. The city is also anticipated to become a growing hub for e-commerce.

Charlotte, North Carolina, however, is perhaps the ideal state for those seeking to get involved in health-care, banking, or retailing. The city is also notable for having a nonprofit called Business Innovation and Growth Council, which seeks to support entrepreneurship by helping small businesses connect with resources in order to foster growth.

Because of the nuance involved it is key to carefully research the location of your new enterprise.

Establish your business

With these three major obstacles out of the way, the next matter is how can you actually create your business?

The process is not dissimilar from a US citizens and, in fact, it’s a process that shares many similarities with establishing a business in China.

The first question to ask is what type of corporate entity you want to establish. The two major types are corporations and limited liability companies.

What type of business entity?

A corporation is an independent legal entity owned by shareholders and is generally suggested for established, larger companies with multiple employees. If you are seeking to establish a branch of your firm, for example, a corporation may be ideal. The corporation model shields it shareholders from business debts and the actions of the corporation, as corporations may be sued. However, the tradeoff is that the corporation is an entity that is double taxed. First at the entity level and then at the shareholder level. In terms of tax, the IRS considers global income, not just US revenue.

The second entity discussed here is the limited liability company. An LLC, as it’s known, is a hybrid entity that provides certain features of a corporation and a partnership, another form of business entity. An LLC can be preferable because investors may only lose as much as they invested (and no more), but the business entity doesn’t receive the double taxation that a corporation does.

 

What state will you incorporate in?

As discussed above, your location matters. Not only because of opportunities and obstacles but because you will need to incorporate in that state and follow that state’s process. To incorporate in the state of California, for example, you will need to mail all relevant paperwork to the Secretary of State.

What industry will you you be working in?

Your industry can influence the type of licenses and permits the state you incorporate in requires. For example, a law firm would need a license to practice law, among a myriad of other permits and licesnes which are required by nearly all businesses. Such as a land use permit and a business license.

Other considerations

It is important to note that in order to open a bank account, secure a business license, obtain loans, hire employees, and pay taxes you will need an Employer Identification Number. An EIN must be applied for through the IRS.