There has been much talk recently among China lawyers and bloggers about a new “three in one” reform policy. The gist of this “policy” is that a company is now only required to obtain a single updated certificate, rather than the three previously required upon its establishment or after the company’s registered information is changed. The goal of the policy is to make the process easier and less costly for companies. But that’s not always exactly what’s happening.
Beijing has implemented the policy well. Documents are submitted to the Administration of Industry and Commerce (AIC), and that is all that needs to be done. The AIC coordinates with the local taxation bureau and the national taxation bureau, shares the required registration information and issues a single complete registration document.
But this is not the case everywhere. The firm is currently establishing a new foreign owned company in Qingdao. Documentation for the “three in one” registration was filed with the local Administration of Industry and Commerce. Then to our surprise, we are still asked to go personally to the local and national tax bureaus to register the required information there. Once the information is approved by the local and national tax bureaus, which each have their own requirements, then one must go back to the AIC to request the final “Three in One” registration certificate.
This goes to show that governance in China is highly localized, which may surprise some foreign companies. What has worked in one city, will often not work in another. Local governments may seek to implement the letter of the law, if not the spirit, and this can result in confusion.