All successfully registered businesses in China, must have a registered physical address within mainland China. If a business needs to change its registered address, there are many specific requirements that must be met in order to do so. Although the process has been simplified in recent years it can remain complicated and procedurally lengthy, in most cases taking well over a month to complete. Furthermore, there are several restrictions on what constitutes a legitimate physical address in China. Violating those requirements can significantly delay an application or even place it in jeopardy.
In order to change a business’s registered address in China, a business must first obtain a Certificate of Relocation from the Administration of Industry and Commerce (AIC) in the jurisdiction in which the business is originally registered. After the Certificate of Relocation is granted, a business must then apply for a new Business License, which includes the new address information and supporting documentation. Before pursuing a change of address, it is important to first consider the requirements that must be met by the new address when the Business License application is submitted.
New Address Requirements:
There are several requirements for registering an address in China. Local districts have their own specific requirements, but standard requirements to keep in mind when considering a change of address are:
- Only ONE business can be registered to any single address in China, unlike in many other major economies like the United States.
- An address must be located at a property zoned for the corresponding type of commercial use of the business, i.e. Retail addresses for retail businesses, industrial addresses for manufacturers, etc.
- The use of virtual and shared offices spaces as a registered address, although increasingly accepted in some business jurisdictions, is technically still restricted and can lead to an abrupt rejection during the application process.
- A minimum of 12 months remaining on a lease when the application for a new Business License is submitted. The local AIC can request that the terms of a lease be renewed to ensure there are at least 12 months left on the contract.
These kinds of requirements are liable to be enforced through unannounced inspection of a company’s registered address. Ensuring that the intended new registered address is fully compliant with the law is crucial before taking steps to apply for a Certificate of Relocation.
Certificate of Relocation:
As previously mentioned, in order to change a registered address in China, a business must obtain a Certificate of Relocation from the AIC in the jurisdiction in which the business is originally registered.
The following original documents are required to accompany the Certificate of Relocation application:
- The fully amended Articles of Association with the relevant resolutions about a company’s change of address.
- Certificate for legal use of the domicile.
- ID card of the company’s legal representative.
- Any additional requirements as required by the local AIC.
Any documents submitted in a foreign language must also include Chinese translations affixed with an official seal from a registered translation company.
If a company is switching addresses within a district, they are only required to obtain the Certificate of Relocation from the AIC before applying for a new Business License. If entering a new district, additional documentation is required from the original AIC affirming that this change in address has been approved.
The greatest operational risk businesses face when changing their address is obstinance on the part of the original district. Often, businesses that wish to depart a district are subjected to onerous tax investigations and other inspections before being issued a Certificate of Relocation. This is ostensibly done to ensure a business is fully compliant and does not owe money but can also have the effect of delaying a change of address. In this case, it may be expedient for an investor to simply dissolve their business in one jurisdiction and establish an entirely new enterprise in another.
Businesses are no longer required to undergo an audit as a condition of changing a registered address. A check is now conducted internally between the local AIC and Chinese tax bureau with the applicant being notified only if they are discovered to have an outstanding tax obligation; this substantially shortens the application period for foreign investors.
However, investors with outstanding tax obligations or fines can still find their application to change a registered business address delayed. In this scenario, investors have the option of simply closing a business in one district and opening an entirely new business in a different district. In this situation, all existing business contracts must be transferred from the original business and the debts associated with the original business remain and must be paid. Many investors have quickly found themselves on the line for many times what they owed originally, due to neglecting to pay the original obligations associated with the original business for even a brief period.
When changing a registered address, a business must apply for an entirely new physical Business License with the AIC, utilizing the updated address information in the new application. This process adds an additional layer of complexity and is worthy of an entire article in and of itself. However, the process of applying for a new Business License was simplified in 2016 with the introduction of the “five in one” license. Now companies are given a Social Credit Code and a single document that details a company’s:
- Business License
- Organization Code
- Tax Registration
- Social Security Registration
- Statistical Registration
In addition, a company only needs to register with the local AIC who will distribute this information to the Administration of Quality and Technology Supervision Office and the Tax Bureau.
Lengthy but Doable:
Despite an increasingly simplified process, changing a registered address in China might still be more complex than a foreign investor is used to. However, many businesses in China successfully change their registered address in China without encountering significant difficulties. Understanding the nuances of this process, in both the original and new jurisdiction, is critical for anticipating potential challenges that may arise and ensuring that materials are submitted correctly in a timely manner.