To simplify business registrations, the Chinese government has started the “Three into One” reform to combine business license, tax registration certificate and organization code certificate of a China registered enterprise into one business license. The reform, initiated in certain pilot areas, has now been rolled out to all over China as of October 1, 2015.
What you need to know
The reform requires any new enterprise or branch established after October 1, 2015 to only obtain a business license with a unified “social credit code” (“New Business License”) from the local Administration for Industry and Commerce (“AIC”) instead of the previous three different certificates (from three different authorities).
Enterprises and branches established before October 1, 2015 may still hold the previous three certificates during a transition period which will end on December 31, 2017. If during the transition period, an enterprise/branch applies for any change to its registration with the localAIC, the local AIC will take back the old three certificates and issue a New Business License. We may see certain local deviations in practice.
Check your local practice
Currently, many local AICs have already published local interpretations and new filing forms to be used from October 1, 2015. Although some local officials may still be less familiar with the new requirements, some local AICs have already started to issue New Business Licenses. But practice can vary from location to location as shown in the following examples:
- Some local AICs (e.g. in Shanghai) tolerate the submission of old application forms during a short period (e.g. a few weeks) after October 1, 2015. Enterprises already in the middle of registration changes might be spared from re-execution of the new forms. But someAICs (e.g. in Beijing, Zhejiang Province and Jiangsu Province) are stricter and only accept new filing forms since October 1, 2015.
- Some locations (e.g. in Shenzhen and Zhejiang Province) have upgraded the “Three into One” policy to a “Five into One” policy. This means that two more certificates (e.g. social security registration certificate and statistics registration certificate) are also combined and covered in the New Business License.
- Many cities have explicitly included representative offices of foreign enterprises in the reform. But exceptions (e.g. in Guangdong Province) also exist where representative offices for the time being have been excluded from the reform and have not been required to convert their registration certificates into new ones.
- Despite December 31, 2017 as official end of transition period set by the national level authority, some local AICs may have their different schedules depending on the local situation. Beijing AIC for example has issued a notice setting the end of transition period in Beijing only as December 31, 2020.
- Management should be aware that even if a certificate has been cancelled, certain formalities with the competent authority (e.g. tax) is still necessary. Details should again be checked locally.